Registering a Section 110 Securitisation Company in Ireland. Plant & Machinery now considered qualifying assets

By Paul Dillon, Tax Partner. Duignan Carthy O’Neill Accountants, Auditors and Tax Advisers.

Ireland is a very favourable location for establishing securitisation companies that manage or hold assets such as bonds, stocks, and commodities. The passing of the Finance Act 2011 expanded ‘qualifying assets’ to include leasing of plant and machinery such as aircraft, ships, rolling stock, mining and drilling equipment, vehicles, etc.

In this article, I am setting out the tax consequences of utilising a Section 110 Securitisation Company.

A section 110 company is a special purpose company which used to manage a range of various assets in Ireland. Assets which can be held and managed included financial assets leased assets and commodities.

Section 110 Company overview

Section 110 of the Tax Consolidation Act 1997 governs the tax treatment of such entities. Section 110 provides that the taxable profits of such qualifying companies are calculated on the same basis as a trading company. This means that the cost of financing such as profit-dependent interest are generally tax-deductible and other costs such as the issuing of financial instruments are tax-deductible. A section 110 company, therefore, overcomes issues with interest deductibility in certain circumstances.

Any surplus income earned by a section 110 company is liable to tax at the higher 25% rate of corporation tax, however, with careful structuring such a vehicle should be tax neutral and be liable to minimal tax on its profits

Criteria for a Section 110 Company

There are certain criteria to be met to be deemed a qualifying company, as well as criteria to be met in respect of qualifying assets

– The company must be resident in Ireland for tax purposes

– The section 110 company must acquire hold or manage the qualifying assets in Ireland (please see definition below) 

– The market value of all qualifying assets is not less than €10 million at date of acquiring the assets. 


Assets which can be held by section 100 Irish Registered Company

A Section 110 Securitisation Company was originally limited to managing and holding of financial assets. The Finance Act 2011 extended the regime to include plant and machinery, leased assets and commodities such as carbon credits. The following is a list of what constitutes a “qualifying asset”, in relation to a qualifying company. This list includes:

– Shares bonds and securities;

– Futures, options, swaps and derivatives

– Bills of exchange, promissory notes

– Lease portfolios and loan portfolios

– Insurance and reinsurance contracts

– Commodities such as carbon credits

– Plant and machinery


Advantages of Section 110 company 

– With careful structuring such a structure should be tax neutral.

– The cost of funding and other related expenditure is tax deductible. 

– A section 110 company can avail of the benefits of Ireland’s extensive taxation treaty network. 

– The company can avail of exemptions from withholding tax payments on interest and dividends payments. 

– There is an exemption from stamp duty available to a qualifying section 110 company on the issue and transfer of notes. 

– For VAT purposes, a section 110 company would generally be treated as engaged in VAT-exempt activities for VAT purposes. Such a company will have a limited ability to recover VAT on any services it receives.


The above information highlights one of the main reasons why Ireland is the premier jurisdiction in Europe for establishing a holding company and/or special purpose vehicle (SPV)

For more information on how to register a company in Ireland today, please don’t hesitate to contact Company Bureau on +353 1 6461625.

For professional tax advice and/or any questions on this article please contact Mr. Paul Dillon, Tax Partner. Duignan Carthy O’Neill Accountants on +353 1 6683165 or see

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