835AD Double deduction mismatch outcome

Summary

This section sets out what is meant by a double deduction mismatch outcome and provides the rule to neutralise such an outcome.

Details

(1) A double deduction mismatch outcome

A double deduction mismatch outcome shall arise where it would be reasonable to consider that a payment will give rise to a tax deduction in two territories and the income against which the tax deduction is taken in one territory is not included in the other territory.

(2)(a) The primary rule

Where the State is the investor territory, the investor shall be denied a tax deduction for so much of the payment which gives rise to the double deduction mismatch outcome.

(2)(b) The defensive rule

Where the State is the payer territory and the double deduction mismatch outcome has not been neutralised in the investor territory, then the payer shall be denied a deduction for so much of the payment which gives rise to a double deduction mismatch outcome.

Relevant Date: Finance Act 2021