A company involved in a public/private partnership which built and maintains the M4/M6 motorway claims the Revenue Commissioners are not entitled to require that a €24.8m sale of its shares should be subject to €1.24m withholding tax.

Cintra Infraestructuras Internacional (CII), a Spanish registered company which owns 66 per cent of the shares in Irish motorway builders, Eurolink, says the Revenue’s decision will affect any future possible sale of its remaining shares in Eurolink and could adversely impact on other investments it makes in Ireland.

Mr Justice Brian McGovern admitted CII’s application for judicial review of the Revenue decision to the Commercial Court list despite opposition from Revenue whose cousnel argued the case did not meet commercial aspect criteria for entry into the list.

The judge said he was satisfied there was sufficient commercial aspect to the case justifying its admission to the list and fixed a hearing date in May. In an affidavit, Peter Dobson, regional tax director of the Ferrovial Group of which CII is a member, said one condition imposed by the purchaser of the CII shares was that CII provide a tax certificate or a letter from the Revenue confirming such a certificate was not required.

As a non-resident, CII must satisfy Revenue no capital gains tax is payable on the sale or that this tax has already been paid. Last September and October, Revenue detemined the purchaser of CII’s shares was obliged to deduct withholding tax of €1.287million.

A binding contract has been executed and, while the transaction has not yet completed, it is expected to conclude early this year, Mr Dobson said. CII says Revenue has erred in the interpretation of the Taxes Consolidation Act 1997, in particular by concluding CII’s shares in Eurolink derive their value from land in the State.

The decision is not amenable to the normal tax appeal mechanism because CII is not Irish tax resident and no notice of assessment has been issued from which the company could appeal,  Mr Dobson said.  CII will be “erroneously out of its money” if the deduction is made, he added.