Taxes Consolidation Act 1997 section 835AD

Double deduction mismatch outcome

Section 835AD defines what constitutes a double deduction mismatch outcome and sets out the rules for neutralising such an outcome under the Anti-Tax Avoidance Directives (ATADs).

• A double deduction mismatch outcome arises where a payment gives rise to a tax deduction in two territories but the income against which the deduction is taken in one territory is not taxable in the other territory.
• Where Ireland is the investor territory, the investor is denied a deduction for the amount of the payment that gives rise to the mismatch (the primary rule).
• Where Ireland is the payer territory and the investor territory has not denied the deduction, the payer is denied a deduction for the mismatch amount (the defensive rule).
• These denial-of-deduction rules override any other provision of the Tax Acts or the Capital Gains Tax Acts.