Taxes Consolidation Act 1997 section 835AL

Payment to hybrid entity deduction without inclusion mismatch outcome

Section 835AL defines a "payment to hybrid entity deduction without inclusion mismatch outcome" and sets out the rule for neutralising such a mismatch where Ireland is the payer territory.

• A mismatch arises where a payment to a hybrid entity gives rise to a deduction in the payer territory without a corresponding inclusion in the payee territory, and this is attributable to differences in how payments to the hybrid entity are allocated between the territory where it is established and the territory where the participator is established.
• No mismatch arises where the participator is an entity that is exempt from tax on profits or gains in the territory in which it is established.
• Where Ireland is the payer territory, the mismatch is neutralised by denying the payer a deduction for the payment to the extent that a corresponding amount has not been included for foreign tax purposes.
• The denial of the deduction applies notwithstanding any other provision of the Tax Acts or the Capital Gains Tax Acts.