Taxes Consolidation Act 1997 section 835AQ

Tax residency double deduction mismatch outcome

Section 835AQ defines a tax residency double deduction mismatch outcome and sets out the rule for neutralising it by denying a deduction in the State.

• A tax residency double deduction mismatch outcome arises where a company obtains a deduction for the same payment in the State and in another territory, the deduction is not offset against income taxable in both territories, and this is attributable to the company being within the charge to both Irish corporation tax and foreign tax.
• The mismatch is neutralised by denying the company a deduction for Irish tax purposes to the extent the mismatch has not already been neutralised in the other territory.
• The denial applies where the other territory is an EU Member State under a double taxation agreement, a non-EU territory under a double taxation agreement, or any other territory not covered by either of those categories.
• Where the company's tax residence must be determined by mutual agreement between the competent authorities of both territories, any adjustment to the company's return must be made without unreasonable delay after the agreement is reached, notwithstanding the normal self-assessment time limits.