Exit Tax in Ireland: When a Company Moves Assets or Residence

Exit tax in Ireland is a charge on the unrealised gains in a company's assets when those assets, or the company's tax residence, leave the Irish tax net without a sale taking place. Revenue describes it as a measure to stop companies avoiding tax when relocating assets. This guide explains in outline when exit tax can arise, what is excluded, how the payment options work and what finance teams should check before a restructuring. It builds on our guide to how companies are charged on chargeable gains.

What exit tax is and where it comes from

According to Revenue's page on exit tax provisions (published 23 June 2026), exit tax is a charge on unrealised capital gains. The rules treat the company as having disposed of the asset at the time it leaves the scope of Irish tax. The same Revenue page says the current provisions are in Chapter 2 of Part 20 of the Taxes Consolidation Act 1997 and implement Article 5 of the EU Anti-Tax Avoidance Directive (Directive (EU) 2016/1164).

The Directive's own text on EUR-Lex explains the idea. A company is taxed on the market value of the transferred assets less their tax value at the time of exit, where the state it leaves no longer has the right to tax them. The Directive also states that the purpose of exit taxes is to make sure a state taxes capital gains built up in its territory, even if those gains have not been realised when the assets or the tax residence leave.

Revenue's Tax and Duty Manual Part 20-02-01 (Exit Tax Provisions, covering sections 627 to 629C TCA 1997) is the detailed guidance. The manual shows a last review date of October 2025, and says that it is a guide only and not professional advice. The Revenue web page says the current rules apply to events on or after 10 October 2018.

When a charge can arise

The Revenue manual sets out three main situations. In each one there is no actual sale, but the company moves something beyond the reach of Irish tax:

• Transfer of assets out of an Irish permanent establishment. A company moves assets from its Irish permanent establishment (PE) to its head office or to a PE in another country.
• Transfer of the business of an Irish PE. A company moves the business carried on through its Irish PE to another country.
• Migration of residence. An Irish-resident company transfers its residence abroad. The manual says the charge applies immediately before the company ceases to be Irish resident.

The Revenue web page summarises this as companies that, without making an actual disposal, migrate their residence or transfer assets offshore. Because the trigger is a movement rather than a sale, a charge can arise even where no cash is received. That is the main practical point for finance directors: the tax cost can precede any proceeds.

When exit tax does not apply

Both Revenue pages list exclusions. In outline:

• Assets that stay within the Irish capital gains tax net, for example land and minerals, and shares deriving their value from them, are outside the charge according to the manual.
• Assets that continue to be used in Ireland by a PE after the company migrates are excluded.
• Certain temporary transfers are excluded, such as those linked to financing of securities, collateral, prudential capital requirements or liquidity management, where the assets are due to return to the transferor's state within 12 months.

The manual also deals with how exit tax interacts with section 620A, and says that the section 620A charge takes precedence where the two overlap. If your transaction touches any of these, read the manual itself rather than relying on a summary.

How the charge is worked out

In outline, the manual says the charge is based on the asset's market value at the deemed disposal, using normal capital gains rules. Gains and losses are calculated asset by asset against base cost. Losses can be set against exit gains in specified circumstances, and the manual refers to the rules that limit certain losses. It also gives worked examples.

Valuation is where disputes tend to arise. The Directive defines market value as the price at which unrelated buyers and sellers would exchange the asset in a direct transaction. For groups, this is close to the arm's length thinking in our guide to transfer pricing for finance and tax professionals. Our suggestion: obtain and keep a documented valuation at the date of the transfer, prepared on a basis you can explain to Revenue.

Rate, and why you should check the figures on the day

Revenue's web page states that the rate of exit tax is 12.5%, and the manual repeats that figure. The manual also says that a different, higher capital gains rate applies if the exit forms part of a transaction to dispose of the asset and the purpose is to secure the lower exit rate. Revenue's pages do not show the same standard capital gains rate: the manual (last reviewed October 2025) refers to a rate of 33%, while Revenue's CGT pages published in October 2026 say that rates for most gains changed on 7 October 2026. This guide asserts neither as the current rate. Rates and thresholds change, so check the relevant Revenue page on the day you plan the transaction.

Paying in instalments or on disposal

The Revenue web page says companies may defer immediate payment by electing to pay exit tax in equal instalments over five years. The Directive provides a similar five-year option for moves within the EU or to EEA countries. The manual adds important conditions:

• Deferral is not available for assets transferred to a third country, unless that country is in the EEA and has a mutual assistance agreement with Ireland or the EU.
• Simple interest applies on deferred tax.
• Payment falls due immediately in certain events, including a sale of the assets, a transfer or migration to a third country, insolvency or the appointment of a liquidator, and a missed instalment that is not put right within 12 months.
• Where there is a risk of non-recovery, a guarantee may be needed, with exceptions where the tax can be recovered from an Irish-resident group company or controlling director.

The manual states that the election to defer must be made electronically in the company's tax return, with annual statements required afterwards. It also provides for exit tax owed by a non-resident company to be recovered from a group member or controlling director in set circumstances. Exact instalment dates and filing windows are set out in the manual and should be checked there, because this guide does not reproduce them.

Exit tax and anti-avoidance rules

Exit tax is a specific rule. It is separate from Ireland's general anti-avoidance rule, which Revenue applies to transactions more broadly. Our guide to the general anti-avoidance rule (GAAR) explains that regime. The manual's own anti-avoidance provision, noted above, is narrower: it deals with a restructuring that is really a disposal in disguise. The manual gives examples of commercial restructurings where this rule is not expected to apply.

A practical checklist for finance teams

A practical approach, labelled as our own suggestion and not a legal requirement:

• Identify early whether any planned move involves an Irish PE, a change of residence or assets leaving Ireland.
• List the assets involved and check whether each is excluded because it stays within the Irish capital gains net or remains used by an Irish PE.
• Model the cash cost of the deemed disposal, and the effect of the instalment election, before the board approves the transaction.
• Check whether the destination is within the EEA, because the manual links deferral to this.
• Diarise the annual statements that follow an instalment election.
• Take professional advice on valuation and on how exit tax interacts with other provisions.

What this guide does not cover

This guide does not cover the detailed computation rules, loss restrictions, transitional rules or the treatment of companies forming a European company or cooperative society. Those are dealt with in the Revenue manual. It is general information only, not tax advice.

Learnsignal's offices are off Baggot Street in Dublin, and we offer in-person training from there. For current details, see our CPD pages.

Frequently asked questions

Is exit tax only relevant when a company leaves Ireland?

No. According to Revenue's manual it can also arise when assets or an Irish permanent establishment's business are moved abroad, even though the company remains Irish resident.

Do we pay exit tax if nothing is sold?

Possibly. The rules treat the transfer or migration as a disposal at market value, so a charge can arise without any sale proceeds.

Can the tax be paid over time?

Revenue says companies may elect to pay in equal instalments over five years, subject to conditions such as the destination country and events that trigger immediate payment. The election is made in the company's return.

Which Revenue guidance should we read?

Tax and Duty Manual Part 20-02-01 on exit tax provisions, and Revenue's exit tax web page. Check the date shown on each page and confirm figures before acting.

Before any cross-border restructuring, speak to your tax adviser early, because exit tax is easiest to manage when it is considered at the planning stage.