Guidance on Part 35 C hybrid mismatches issued

Jul 13, 2020

Revenue have issued a new manual on the operation of anti-hybrid rules. The manual provides an overview of the anti-hybrid rules introduced into Part 35C TCA 1997 by Finance Act 2019.

The new manual (Part 35C-00-01) sets out information in relation to:

  1. What is meant by a mismatch outcome, being a double deduction mismatch outcome or a deduction without an inclusion mismatch outcome, and the specific situations that give rise to a hybrid mismatch outcome.
  2. The test for inclusion. What is meant by the term “corresponding amount” and how to test whether a corresponding amount has been included for the purposes of the anti-hybrid rules in various scenarios.
  3. How the anti-hybrid rules interact with Ireland’s worldwide system of taxation and their interaction with an effective worldwide system of taxation, such as the US check-the-box system of taxation.
  4. What provisions are regarded as a having similar effect to anti-hybrid rules, a non-exhaustive list is provided.

Further guidance on anti-hybrid rules is expected in the coming months.