817X. Making of distribution

(1) This section applies to a relevant distribution where—

(a) a company resident in the State makes a relevant distribution to—

(i) an associated entity that is resident in a specified territory and is not resident in another territory that is not a specified territory, or

(ii) a permanent establishment of an associated entity which is situated in a specified territory,

(b) to the extent that the relevant distribution is not an excluded payment, and

(c) to the extent that the relevant distribution is made out of income, profits or gains which have not been chargeable, directly or indirectly, to—

(i) domestic tax,

(ii) foreign tax at a nominal rate greater than zero per cent,

(iii) a controlled foreign company charge,

(iv) a supplemental tax, or

(v) any other tax which is similar to any of the taxes referred to in subparagraphs (i) to (iv).

(2) Sections 140(3)(a), 142(2), 153(4), 172B(7), 172D(2) and 172E(1) shall not apply to a relevant distribution to which this section applies.

(3) Where an arrangement is entered into by any person and it is reasonable to consider that the main purpose or one of the main purposes of the arrangement, or any part of the arrangement, is the avoidance of the application of any of the provisions of this section to the making of a relevant distribution, directly or indirectly, to an associated entity in a specified territory, then this section shall apply as if the arrangement, or that part of the arrangement, had not been entered into.