Taxes Consolidation Act 1997 section 835AS

Imported mismatch outcome

Section 835AS defines what constitutes an imported mismatch outcome and sets out the rule for neutralising it by denying a deduction to the Irish company whose payment funds the mismatch.

• An imported mismatch outcome arises where an Irish company makes a payment that directly or indirectly funds a mismatch outcome in another territory, and that outcome has not been neutralised by equivalent anti-hybrid rules elsewhere.
• The outcome is neutralised by denying the Irish company a deduction for so much of the payment as corresponds to the un-neutralised portion of the mismatch.
• Because this chapter requires the anti-hybrid rules to be applied to transactions between entities in other territories, the definitions of "domestic tax" and "foreign tax" are modified accordingly.
• Both domestic tax and foreign tax must be taxes on profits or gains similar to income tax, corporation tax (including a surcharge under Part 35B) or capital gains tax, but domestic tax applies in the territory where the entity is established and foreign tax applies in a territory where it is not.