Revenue will save €60m by closing off loopholes to companies
The Revenue Commissioners expects to save up to €60m for the Exchequer this year after closing two loopholes used by companies to avoid corporation tax and to transfer funds to shareholders on a tax-free basis.
According to government documents seen by the Irish Independent, some companies were using artificial interest rates when transferring assets within a group.
They were then able to claim tax relief on the interest rate when they were calculating the profits from a trade.
A second loophole involved the use of trusts to move money out of so-called "close companies", meaning they are owned by five people or fewer, to shareholders or family members.
Revenue found that some companies had been able to transfer the money to the trusts on a tax-free basis.
Shareholders will now have to deduct dividend withholding tax of 20pc on the amount moved using the trust.
"Where funds settled by a close company on a trust are subsequently distributed from the trust, the section provides that the shareholders or family members to whom such funds are transferred will be chargeable to income tax at the marginal rate on amounts received," a spokeswoman for the Revenue Commissioners said.
"The provisions apply to funds transferred on or after January 21, 2011."
The schemes are examples of measures being targeted by the Revenue under new mandatory reporting rules about tax-avoidance schemes.
"The purpose of mandatory disclosure is to obtain early information about certain tax schemes and how they work. It is likely that the schemes referred to, if carried out now, would come within its scope," the spokeswoman added.