On 28 August 2026, Irish Revenue released eBrief No. 122/26 detailing the tax treatment of Specified Financial Transactions (SFTs) under Section 110A and related provisions. The guidance covers repurchase agreements (repos), securities lending, buy-sell back arrangements, and derivative contracts. It clarifies the income tax and corporation tax treatment of returns, the application of withholding tax, and the impact of the EU Financial Transaction Tax (FTT) proposal. The eBrief is effective for transactions entered into on or after 1 January 2026.
Key Takeaways
- Characterisation of Returns: Returns on SFTs are generally treated as interest income for the provider of funds and interest expense for the receiver, regardless of legal form.
- Withholding Tax Obligations: Irish withholding tax (20%) may apply to deemed interest payments to non-residents unless a double tax treaty or EU Interest-Royalty Directive exemption applies.
- Reporting and Compliance: Parties to SFTs must maintain detailed transaction records and report relevant payments on annual tax returns. Failure to deduct withholding tax renders the payer liable for the tax.
Disclaimer: This article is compiled and summarized by the AI based on publicly available information and is for general information purposes only. It does not constitute any form of formal tax advice, legal opinion, or basis for performance. Please consult a qualified professional tax advisor or legal counsel for tax advice.
Source: Read Official Announcement