Revenue Sharing Agreement (Ireland)

A Revenue Sharing Agreement in Ireland grants permission to use the owner's rights or brand and sets the scope, territory, fees, and duration of that licence, and is shaped by the Partnership Act 1890.

Revenue sharing is a widely used commercial model in Ireland across multiple sectors, including technology (app stores, SaaS platforms, digital marketplaces), media and entertainment (music streaming, video platforms, publishing), advertising (ad revenue sharing between publishers and platforms), property (commercial rent based on a percentage of revenue), franchising (revenue-based royalties), and collaborative business arrangements (joint marketing, co-branded products, affiliate programmes).

Under Irish contract law, a revenue sharing agreement is a valid and enforceable contract requiring the essential elements of offer, acceptance, consideration, and intention to create legal relations. The revenue share paid by one party to another constitutes consideration for the other party's contribution to the arrangement, which may include the provision of intellectual property, technology, content, services, capital, or access to customers or distribution channels.

The legal distinction between revenue sharing and profit sharing is important under Irish law, particularly in the context of partnership law. The Partnership Act 1890, which continues to govern partnership law in Ireland, provides in Section 2(3) that receipt of a share of the profits of a business is prima facie evidence that the recipient is a partner. The sharing of gross revenue, however, is generally a weaker indicator of partnership than the sharing of net profits. Nevertheless, the Irish courts will examine the totality of the arrangement, including the degree of control, mutual agency, and risk sharing, to determine whether a partnership exists.

The tax treatment of revenue shares in Ireland is governed by the Taxes Consolidation Act 1997. Revenue share receipts are generally treated as trading income for the recipient, taxable under Schedule D at the applicable income tax or corporation tax rates. The party making the revenue share payment may deduct it as a business expense under Section 81 of the Taxes Consolidation Act 1997, provided the expenditure is incurred wholly and exclusively for the purposes of the trade.

VAT is a critical consideration in revenue sharing arrangements. The Value-Added Tax Consolidation Act 2010 requires each supply of goods or services to be analysed for VAT purposes, and revenue share payments may constitute consideration for taxable supplies, requiring the issuance of VAT invoices and the application of the appropriate VAT rate.

Where the revenue sharing arrangement involves the processing of personal data — for example, where a platform shares customer transaction data with a content provider or publisher to calculate their revenue share — the parties must comply with the General Data Protection Regulation (GDPR) and the Data Protection Act 2018. The Data Protection Commission (DPC), Ireland's national data protection supervisory authority, has issued guidance on the obligations of data controllers and data processors engaged in commercial data-sharing arrangements. The revenue sharing agreement should include a data protection clause addressing the roles of each party, the lawful basis for sharing personal data, the security measures in place, and the parties' rights and obligations in the event of a data breach.

From a competition law perspective, revenue sharing arrangements between competing businesses may be scrutinised by the Competition and Consumer Protection Commission (CCPC) under the Competition Act 2002 and Articles 101 and 102 of the Treaty on the Functioning of the European Union (TFEU). Revenue sharing agreements that fix prices, allocate markets, or otherwise restrict competition between the parties may be void and unenforceable under competition law. Parties entering into revenue sharing arrangements should consider whether their arrangement could be characterised as a horizontal agreement between competitors and seek competition law advice if so.

Where a revenue sharing arrangement is between connected parties — for example, between a parent company and a subsidiary, or between companies under common ownership — the transfer pricing rules under Part 35A of the Taxes Consolidation Act 1997 (as amended by the Finance Act 2010 and subsequent Finance Acts) may apply. Transfer pricing rules require that transactions between connected parties be priced on an arm's length basis — that is, on the same terms as would apply between independent parties dealing at arm's length. Revenue sharing percentages between connected parties should reflect market rates to avoid transfer pricing adjustments by the Revenue Commissioners.

In the context of online platforms and digital markets, the EU Digital Markets Act 2022 and the EU Digital Services Act 2022 introduce additional regulatory obligations for large digital platforms operating in Ireland, which may affect the terms on which revenue is shared with third-party publishers, app developers, and content creators. Irish businesses operating platforms that fall within the scope of these regulations should confirm that their revenue sharing agreements comply with the applicable platform regulation requirements. Ireland's transfer pricing rules under Part 35A of the Taxes Consolidation Act 1997 have been updated through successive Finance Acts to align with the OECD BEPS project recommendations, and the OECD Transfer Pricing Country Profile for Ireland (updated July 2025) confirms that Ireland applies the arm's length principle to all transactions between associated enterprises. Revenue sharing percentages between connected parties must therefore reflect market rates supportable by a transfer pricing analysis, particularly given increased Revenue Commissioners scrutiny of intra-group arrangements in the Irish technology and digital sectors.

An Irish Revenue Sharing Agreement is needed whenever two or more parties wish to formalise the basis on which revenue from a shared business, product, project, or activity will be calculated, allocated, and distributed. The agreement provides legal certainty and a transparent framework for the financial relationship between the parties.

You need an Irish Revenue Sharing Agreement when you are: a technology company sharing revenue with content creators, app developers, or service providers who contribute to your platform or marketplace; a media company sharing advertising revenue with publishers, bloggers, podcasters, or video creators whose content generates ad impressions and clicks; a property developer or landlord entering into a turnover-based rent arrangement with a commercial tenant, where the rent is calculated as a percentage of the tenant's revenue; a franchisor entering into a franchise arrangement where the franchisee pays revenue-based royalties rather than fixed fees; a music label, publisher, or distributor sharing revenue from streaming, downloads, and licensing with artists, songwriters, and rights holders; a business entering into a co-marketing, co-branding, or affiliate arrangement where the revenue from joint activities is shared between the parties; a startup or growth company entering into a revenue sharing arrangement with an investor or strategic partner as an alternative to equity dilution; or a software company entering into a reseller or distribution arrangement where the reseller receives a percentage of revenue from sales.

The revenue sharing agreement is particularly important because it requires a precise definition of revenue, clear sharing percentages, transparent reporting mechanisms, and strong audit rights to prevent disputes. Unlike a simple fee-for-service arrangement, revenue sharing creates an ongoing financial relationship where the parties' interests are directly linked to the performance of the underlying business or activity.

From a tax perspective, the agreement is essential for confirming that both parties correctly account for their revenue share receipts and payments in their tax returns. The Revenue Commissioners expect businesses to have clear written agreements supporting their declared income and deductions, and the absence of a written agreement can lead to adverse tax assessments.

The agreement must also address VAT compliance, as revenue share payments may be consideration for taxable supplies under the Value-Added Tax Consolidation Act 2010. Where the parties process personal data in connection with the revenue-generating activities, such as customer data from an e-commerce platform, the GDPR and the Data Protection Act 2018 require the parties to address their data protection obligations.

A thorough Irish Revenue Sharing Agreement should contain several essential provisions to confirm clarity, transparency, and enforceability.

The definition of revenue clause is the most critical provision. It should define revenue with precision, specifying the income sources included, the deductions permitted (returns, refunds, chargebacks, discounts, bad debts), whether revenue is calculated on an accruals or cash basis, the accounting standard applied (FRS 102 or IFRS), and whether VAT is included or excluded from the revenue figure.

The revenue sharing percentages clause should specify each party's percentage share of the defined revenue. The percentages may be fixed (e.g., 70/30) or variable based on performance tiers, volume thresholds, or other agreed metrics. The clause should also address whether the sharing percentages change over time or upon the achievement of milestones.

The minimum guarantees clause, if applicable, should specify any minimum revenue share amounts that must be paid regardless of actual revenue performance. Minimum guarantees provide security to the party that has made a significant contribution (such as IP, capital, or exclusivity commitments) and protect against underperformance.

The reporting and payment clause should specify the frequency of revenue reports (monthly, quarterly), the information that must be included in each report, the payment schedule, the payment method, and the consequences of late payment under the European Communities (Late Payment in Commercial Transactions) Regulations 2012.

The audit rights clause should grant each party the right to audit the books, records, and financial systems of the party that controls the revenue, with provisions for the frequency, scope, notice period, cost allocation, and consequences of material discrepancies.

The VAT clause should address the VAT treatment of revenue share payments under the Value-Added Tax Consolidation Act 2010, including whether payments are subject to VAT, the applicable rate, the obligation to issue VAT invoices, and the treatment of cross-border payments.

The tax clause should address each party's responsibility for their own tax obligations, including income tax, corporation tax, and withholding tax, and require cooperation in providing information needed for tax compliance.

The intellectual property clause should address the ownership, licence, and use of any intellectual property contributed by the parties or created in connection with the revenue-generating activity, referencing the Copyright and Related Rights Act 2000 and the Trade Marks Act 1996.

The confidentiality clause should protect the financial information, revenue data, customer information, and business strategies shared between the parties.

The data protection clause should address GDPR and Data Protection Act 2018 obligations where personal data is processed in connection with the revenue-generating activities.

The non-compete and exclusivity clause, if applicable, should define any restrictions on the parties' ability to enter into competing arrangements during the term of the agreement.

The termination clause should specify the circumstances in which the agreement may be terminated, the notice period, and the consequences of termination, including the final revenue share calculation, payment of accrued amounts, and the treatment of ongoing revenue from activities initiated during the term.

The governing law and dispute resolution clause should specify Irish law and provide for mediation under the Mediation Act 2017 and litigation in the Irish courts. The forms-legal.com Revenue Sharing Agreement (Ireland) template covers the mandatory elements under Companies Act 2014.