Exit tax annual statement

Definition

The exit tax annual statement is a required report for individuals and businesses subject to exit tax obligations. 

What is an exit tax annual statement?

The exit tax annual statement is a key component of the tax compliance process for businesses and individuals undergoing significant changes in their tax status or asset holdings. Exit tax is charged on certain capital gains or income that arise when an individual or company ceases to be tax resident in Ireland.

The exit tax annual statement provides a comprehensive summary of the exit tax liability for a given year. It includes details on the assets transferred, the gains or income realised, and the calculation of the tax due. This statement is crucial for ensuring compliance with Irish tax laws and for accurately reporting exit tax liabilities.

The statement must be filed with the Revenue Commissioners by the specified deadline. It helps the Revenue Commissioners to track and verify that exit taxes are paid appropriately when individuals or businesses relocate their tax residence or assets abroad.

By requiring this statement, the Irish tax system wants to prevent tax avoidance and make sure that taxpayers fulfil their obligations before leaving the tax jurisdiction. The exit tax annual statement also helps in maintaining transparency and providing a clear record of tax liabilities related to the movement of assets and changes in tax residency.

Example of an exit tax annual statement

A technology company based in Dublin decides to relocate its headquarters to another country. As part of this move, the company must transfer its assets and account for any capital gains realised from this transfer. To comply with Irish tax regulations, the company prepares and submits an exit tax annual statement to the Revenue Commissioners.

The statement includes details of the assets being transferred, the gains accrued, and the exit tax calculated based on these gains. By filing this statement, the company makes sure it meets its tax obligations before officially moving its tax residence.