The High Court has refused Cintra Infraestructuras Internacional SLU’s application to quash two Revenue Commissioners’ letters concerning the proposed sale of its shares in an Irish motorway operator. Mr Justice Twomey held that the letters gave non-binding opinions and did not impose legal consequences that could be challenged by judicial review.
Cintra, a company incorporated and tax resident in Spain, sold a 45.99% shareholding in Eurolink Motorway Operation Limited on 25 February 2016. Eurolink operates the M4/M6 Kinnegad to Kilcock Motorway under a 30-year public private partnership contract. The Revenue accepted that Eurolink had no proprietary interest in the roads, but argued that its contractual rights, including access rights, meant its shares derived value from land in the State for the purposes of the Taxes Consolidation Act 1997.
Before the sale, Cintra asked the Revenue to confirm that the shares were not subject to capital gains tax and that a CG50A certificate was unnecessary. The Revenue’s letters of 15 September and 19 October 2015 said it could not give that confirmation and set out its view that withholding tax applied. The share sale contract required a CG50A certificate or equivalent confirmation for the buyer to pay the full €9,229,100 consideration without withholding 15%. After the sale completed, €1,384,365 in withholding tax was paid to the Revenue.
Cintra sought to have the letters quashed, a declaration that the sale was not subject to capital gains tax, and repayment of the withholding tax. It argued that the Revenue’s view would probably lead to a tax determination affecting its rights. The court did not decide whether the Revenue’s interpretation of “land” was correct or whether capital gains tax was payable on the sale.
Justice Twomey said the letters were preliminary opinions issued before the transaction had completed. They were expressly non-binding, based on the information then available, and left Cintra free to take a different position. The letters did not change Cintra’s legal position, which was governed by the 1997 Act. The court also noted that a tax liability decision could be challenged through the statutory appeals process if the Revenue refused a refund.
The court concluded that the letters were not a decision or determination imposing legal consequences and refused the relief sought. It did not determine the underlying tax dispute or order repayment of the withholding tax.