Taxes Consolidation Act, 1997 (Number 39 of 1997)
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Chapter 3
Group and equity ratio
835AAG. Interpretation (Chapter 3)
(1) In this Chapter—
“associated enterprise” has the same meaning as it has in Part 35C, other than in Chapters 2, 3 and 8 of that Part and in the application of that Part to hybrid entities;
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“group EBITDA” means the amount included in respect of profit or loss, before taking into account any amount of income tax, finance income, finance costs, depreciation, amortisation or impairments, excluding any amounts in respect of a qualifying long-term infrastructure project, in the ultimate consolidated financial statements of the group of which the relevant entity is a member for the period in which the relevant entity’s accounting period ends;
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“group EBITDA” means the amount included in respect of profit or loss, before taking into account any amount of income tax, finance income, finance costs, depreciation, amortisation or impairments, excluding any amounts in respect of a qualifying long-term infrastructure project, in the ultimate consolidated financial statements of the worldwide group or single company worldwide group, as the case may be, of which the relevant entity is a member for the period in which the relevant entity’s accounting period ends;
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“group exceeding borrowing costs” means the amount included in respect of net finance expense, excluding any amount of finance income or finance expense in respect of a qualifying long-term infrastructure project, in the ultimate consolidated financial statements of the group of which the relevant entity is a member for the period in which the relevant entity’s accounting period ends;
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“group exceeding borrowing costs” means the amount included in respect of net finance expense, excluding any amount of finance income or finance expense in respect of a qualifying long-term infrastructure project, in the ultimate consolidated financial statements of the worldwide group or single company worldwide group, as the case may be, of which the relevant entity is a member for the period in which the relevant entity’s accounting period ends;
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“group ratio” means the following fraction expressed as a percentage:
(group exceeding borrowing costs)/(group EBITDA).
(2) Where a relevant entity is a single company worldwide group, group exceeding borrowing costs and group EBITDA shall be calculated on the basis of the financial statements of the relevant entity prepared under generally accepted accounting practice, adjusted such that transactions with associated enterprises are disregarded.
(3) Where arrangements are entered into by any person and it is reasonable to consider that the main purpose or one of the main purposes of the arrangements, or any part of them, is the avoidance of the effect of the adjustment referred to in subsection (2), then that subsection shall apply as if the arrangements, or the part of them, as the case may be, had not been entered into.
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Substituted by FA22 s39(2)(f)(i). Applies for accounting periods commencing on or after 1 January 2023.