Taxes Consolidation Act 1997 section 835AU

Structured arrangements

Section 835AU defines when a structured arrangement mismatch outcome arises and sets out the rule for neutralising it by denying a deduction.

• A structured arrangement mismatch outcome arises where a company would reasonably be expected to be aware that it entered into a structured arrangement, shared in the resulting tax benefit, and the mismatch has not been neutralised elsewhere.
• The mismatch is neutralised by denying the taxpayer a deduction for so much of the payment as corresponds to the mismatch outcome not already neutralised in another territory.
• For the purposes of this chapter, "domestic tax" and "foreign tax" are redefined to refer to taxes on profits or gains similar to income tax, corporation tax or capital gains tax in the territory where the entity is or is not established, respectively.
• The "reasonably expected to be aware" test is an objective standard — it asks whether a hypothetical reasonable entity would have had knowledge of the arrangement and its consequences, regardless of the particular facts of the Irish entity involved.