The Irish Revenue has announced the implementation of temporary measures in relation to the close company surcharge regime, in response to the coronavirus pandemic.

The close company surcharges apply to income of close companies that is not distributed within 18 months from the end of the accounting period in which the income arose. The surcharge is 20 percent of the excess of the sum of the distributable investment income and the distributable estate income of an accounting period over the distributions for that period. A 15 percent surcharge can apply on certain undistributed income of close service companies.

Revenue said that where a distribution is not made within that time as a result of COVID-19 circumstances affecting the company, Revenue will extend the 18-month period for distributions by a further nine months. Affected companies should apply to Revenue for an extension.

This measure will apply for accounting periods ending from September 30, 2018, onwards, and for which distributions to avoid the surcharge would be due by March 31, 2020, onwards.

If a distribution that can be made is not made by the end of the extended period, the resulting surcharge will be included in the corporation tax liability for the 12-month accounting period following the surcharged accounting period as normal, and interest will apply to the late payment of the surcharge.