The exemptions that apply include scenarios where the CFC pays a comparatively higher amount of tax in its territory than it would have paid in the State (section 835T Effective tax rate exemption), the low profit margin exemption (section 835U, which excludes from the scope of the CFC rules an entity whose accounting profits are less than 10% of its operating costs for the relevant period), the low accounting profit exemption (section 835V, which excludes from the scope of the CFC rules, a CFC with accounting profits of less than €750,000 where any non-trading income stream amounts to less than €75,000, or a CFC with accounting profits of less than €75,000) and the exempt period exemption (section 835W, which provides controlling companies with a 'grace period' for newly acquired CFC's during which the controlling company can organise or reorganise its business so that a CFC charge does not arise.)
The CFC rules will not apply where the arrangements, under which SPFs are performed, have been entered into on an arm’s length basis or are subject to Irish domestic Transfer Pricing rules.