Taxes Consolidation Act 1997 section 835AVA

Interpretation (Chapter 10A)

Section 835AVA defines the key terms used in the reverse hybrid mismatch rules in Chapter 10A of Part 35C.

• A reverse hybrid entity is an Irish-established hybrid entity that is tax-transparent in Ireland but treated as a separate taxable entity by some or all of its participators' home territories, creating a mismatch where income may escape tax altogether.
• A relevant participator is a participator that, alone or together with its associated entities, holds a relevant ownership interest of 50 per cent or more in the reverse hybrid entity, measured by ownership rights, voting power, or profit entitlement.
• Associated entities follows the definition of associated enterprises in section 835AA, but with the ownership threshold raised from 25 per cent to 50 per cent, and with partners in a partnership not treated as acting together solely because they are in partnership.
• The territory in which a reverse hybrid entity is established is determined by where the entity is registered, incorporated, or created, not by where it is effectively managed.