Section 110 Companies in Ireland: Revenue Rules for Securitisation Vehicles

A section 110 company is an Irish-resident special purpose company that qualifies for a particular corporation tax regime under section 110 of the Taxes Consolidation Act 1997. Revenue's Tax and Duty Manual describes the regime as one introduced by Finance Act 1991 to promote securitisation in the Irish financial sector on a tax-neutral basis. This guide explains the concepts, the qualifying conditions and the anti-avoidance themes in outline, for finance, tax and compliance professionals in Dublin and elsewhere in Ireland who meet these vehicles in practice.

It is an orientation guide, not tax advice. Revenue's own manual says it is a guide only, that it is not comprehensive and that it does not give a definitive answer in every case, so structures should always be checked against the legislation and current Revenue guidance. Related corporation tax limits on interest deductions are covered in our guide to the interest limitation rule.

What a section 110 company is

Section 110 provides for the taxation of certain special purpose companies. According to Revenue's Tax and Duty Manual Part 04-09-01 (last updated August 2026), a qualifying company is taxed on profits computed on Case I principles, although the profits are chargeable under Case III.

Revenue's public page on qualifying companies (published 4 November 2025) confirms that section 110 "provides for the taxation of certain special purpose companies" and that a company wishing to use the regime must notify Revenue. The sections below follow the structure of the manual.

The qualifying conditions in outline

The manual lists a set of conditions that must be met throughout the period of operation. In outline, the company must:

• be resident in Ireland;
• acquire, hold or create qualifying assets;
• carry on a business of holding or managing qualifying assets in the State;
• carry out only activities that are ancillary to that business;
• meet a minimum value of qualifying assets on the first day it acquires them (the manual gives this as €10 million; as with any figure, check the current manual on the day);
• notify Revenue that it intends to be a qualifying company; and
• enter into its transactions at arm's length, other than those dealt with by the profit participating note rules in section 110(4).

The manual states that the first-day asset test applies only on the day the assets are first acquired, held or created, while the other conditions must be met throughout.

Residence and substance

On residence, the manual says that where directors act independently in Ireland and oversee the company's activities there, Revenue's view is that the company should be resident only in Ireland, and that directors should not take instructions from third parties. On the business condition, it says the company must carry on a business and not a purely passive activity. Outsourced active management is acceptable, but long periods without review may raise doubts about whether a business exists, and the business must be carried on in Ireland. Our suggestion: boards of these companies should keep minutes and review papers that show real portfolio oversight happening in Ireland, because that is the kind of evidence the manual points to.

Qualifying assets

The manual does not set out a full definition of qualifying assets, so the legislation itself is the starting point. It does discuss commodities: tangible assets, other than currency, securities, debts or other financial assets, that are dealt in on a recognised commodity exchange. The company need not trade on an exchange, but the assets must be of a kind normally traded there. A non-resident company cannot be a qualifying company.

Arm's length and profit participating notes

The manual describes profit participating notes (PPNs) as central to the tax-neutral outcome. Under section 110(4), payments on certain securities are deductible where the only reason they would otherwise fail to be deductible is a specific rule in section 130. The manual says the true nature of each payment, interest or distribution, must be worked out from all the facts, including the legal documents and company law.

It then describes several restrictions, again in outline:

• Specified persons. Deductibility is restricted for certain payments to connected parties, including payments to tax-exempt recipients such as pension funds where the recipient is a specified person, and payments on listed or wholesale debt where the company knows or is deemed to know that the payment will not be subject to tax in Ireland, an EU state or a double tax agreement country.
• Control. Control includes ownership or powers under constitutional documents and extends to "significant influence" held by a person with a direct or indirect interest of a stated percentage. Rights typical of a bank acting as secured creditor do not, by themselves, generally create significant influence.
• Return agreements. Agreements that sweep out profits are restricted, with listed exclusions that include performance-based management fees, non-recourse clauses, interest rate and currency hedges and credit default swaps.
• Irish property. PPN deductibility is restricted for businesses holding loans, fund units or shares linked to Irish land, with exclusions for certain structured finance transactions.

The manual also covers the "subject to tax" concept, including how investments through partnerships and other transparent entities are treated, and notes that interest on payment-in-kind notes is dealt with by reference to market value rather than face value. Anyone working on a live structure should read these sections in full, because the detail drives the answer.

Anti-avoidance

The manual explains that the section 110(4) treatment applies only where it is reasonable to consider that the payment or security was for bona fide commercial purposes and was not part of a scheme with a main purpose of avoiding tax. It also discusses orphan structures, where shares are held on charitable trust, often to achieve bankruptcy remoteness. Valid commercial reasons are accepted, but an orphan vehicle that is in reality part of a group, or where side or tacit agreements exist, may be examined for tax avoidance. Revenue's general guidance on tax avoidance is stated to be relevant as well.

Transfer pricing and interest limitation

For chargeable periods beginning on or after 1 January 2020, the manual says transfer pricing rules apply to transactions between associated persons, while section 110(2)(d) disapplies transfer pricing for securities referred to in section 110(4). For earlier periods and for non-associated persons, directors should be satisfied that transactions are at arm's length. For the wider rules, see our guide to transfer pricing for finance and tax professionals.

The manual does not discuss the interest limitation rule, so this guide does not say how the two regimes interact. Professionals dealing with interest deductibility in a group should read the interest limitation guide linked above and then check Revenue's current guidance for the position of qualifying companies.

Notifying Revenue

A company that wants to use the regime must notify an authorised officer in Revenue that it is, or intends to be, a qualifying company, on Form S.110. Revenue's page says the form must be submitted within eight weeks of the date the company meets the relevant condition, and Form S.110W is used to withdraw, within eight weeks of the date the company stops being a qualifying company. Tax and Duty Manual Part 04-09-03 (last reviewed January 2025) says additional information has been required with the notification since 1 January 2017 and refers to the relevant paragraph of the legislation without listing every item. Time limits are the kind of detail that changes, so check the form and the manual before filing.

Foreign tax and other points

An August 2026 update to the manual added a section on foreign tax relief. It says foreign withholding tax is not deductible in computing the company's profits and that relief may instead be available under Schedule 24 in the form of a credit, a reduction in income, or both. The credit cannot exceed the Irish corporation tax attributable to the income. Section 110 companies are also chargeable on distributions received. The worked examples in the manual use specific rates and amounts that we do not reproduce here.

Reporting to the Central Bank

The Central Bank of Ireland's statistics pages state that Irish-resident section 110 companies, which it calls special purpose vehicles, are obliged to report quarterly data to the Central Bank, and describe a registration step. Companies already reporting as financial vehicle corporations are excluded from that particular requirement. The page sets deadlines in working days; check it directly for current requirements. Collective investment structures are a different topic: see our guide to the ICAV for how Irish funds are structured.

A practical checklist

A practical approach: keep a single file for each vehicle that records the date the first-day asset test was met, the date and copy of the Form S.110, board minutes showing oversight in Ireland, a note of how each PPN holder is subject to tax, and the arm's length analysis for service providers. Set a review point whenever the investor group, the control position or the asset mix changes.

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 a section 110 company the same as a securitisation vehicle?

Revenue's manual says section 110 was introduced to promote securitisation in Ireland. Qualifying companies are special purpose companies; whether a particular vehicle qualifies depends on meeting the statutory conditions, not on what it is called.

Does a section 110 company pay no tax at all?

No. The manual says profits are computed on Case I principles and charged under Case III. The tax-neutral outcome depends on deductions such as those for qualifying PPN payments, which are subject to the restrictions described above.

Does a section 110 company have to notify Revenue?

Yes. Revenue's page says a company that wishes to use the regime must notify an authorised officer, using Form S.110, within a stated period. Check the page for the current requirement.

Can a non-resident company be a qualifying company?

The manual says non-resident companies cannot be qualifying companies and that their assets cannot be qualifying assets.

Where should I check the current rules?

Use the Revenue Tax and Duty Manuals, Revenue's qualifying companies page and the legislation on irishstatutebook.ie, and take professional advice for any live structure.

Section 110 is a technical area where small facts matter. Treat this guide as a map, and confirm every point against the official sources before relying on it.