Taxes Consolidation Act 1997 section 817U

Interpretation

Section 817U defines the key terms used throughout the outbound payments chapter, which contains defensive measures removing certain exclusions from the obligation to deduct withholding tax (at 20 per cent on interest and royalties, and 25 per cent on distributions) on outbound payments made to associated entities in specified territories.

• The section defines core terms including "relevant payment" (deductible interest or royalties), "relevant distribution" (certain dividends), "excluded payment" (payments already subject to tax elsewhere or where double non-taxation does not arise), and "specified territory" (zero-tax territories and EU-listed non-cooperative jurisdictions).
• Two entities are "associated entities" where one holds more than 50 per cent of the other's share capital, voting power or profit entitlement, or has definite influence over the other's management, or both are associated with a common third entity; from 1 January 2026, association can also arise through common individual ownership or control.
• An entity is resident in a territory where it is treated as resident under a double taxation agreement with Ireland or, failing that, under the domestic law of that territory; if neither applies, it is resident where it was created.
• Where a payment or distribution is made to one entity but is treated under local tax law as arising to a different entity or individual, the chapter treats the payment as if it had been made directly to that other entity or individual.