On 21 August 2026, Irish Revenue published eBrief No. 120/26 providing updated guidance on Section 110 companies, the special purpose vehicles used for securitisation transactions. The eBrief outlines the qualification criteria (residence, regulation, bona fide commercial purpose), the tax computation mechanics (trading income basis, deduction of finance costs, exemption from capital gains tax on qualifying assets), and the anti-avoidance provisions including the “profit participating loan” rules. It also addresses the interaction with Pillar Two GloBE rules. The guidance applies to accounting periods commencing on or after 1 January 2026.
Key Takeaways
- Qualification and Regulation: The company must be Irish tax resident, regulated by the Central Bank of Ireland (or equivalent EU regulator), and established for a bona fide commercial securitisation.
- Tax Neutrality: Section 110 companies compute taxable profit on a trading basis, deducting all financing costs. Gains on disposal of qualifying assets are exempt from CGT. Distributions to noteholders are generally not subject to withholding tax.
- Anti-Avoidance and Pillar Two: Profit participating loans are recharacterised as equity. The eBrief confirms that Section 110 entities are subject to Pillar Two top-up tax if their effective tax rate falls below 15%.
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