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Taxes Consolidation Act, 1997 (Number 39 of 1997)

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835AAL. Application of Part to interest group

(1) This section applies where a company is a member of an interest group.

(2) Where a relevant entity is an interest group, section 835AAC shall apply, subject to the modification that a reference to a disallowable amount of a relevant entity shall be construed as a reference to the disallowable amount of the member of the interest group calculated or allocated, as the case may be, in accordance with subsection (6), (7) or (8), as the case may be.

(3) Where an amount is required to be calculated in respect of an interest group for the purposes of this Part, it shall comprise the results of all the members of the interest group.

(4) The accounting period of an interest group shall be the accounting period which is common to more than half of the members of the interest group or, where there is no such accounting period, the accounting period of the reporting company.

(5) Where the accounting period of a member of an interest group does not coincide with the accounting period of the interest group—

(a) the results of such a member shall be apportioned such that the income and expenses are those which, on a just and reasonable basis, arose during the accounting period of the interest group, and

(b) all balance sheet amounts shall be those which would be reflected in the balance sheet of the member of the interest group on the final day of the accounting period of the interest group.

(6) Subject to subsections (7) and (8), the disallowable amount of a member of an interest group shall be calculated as follows:

DAmember = DAgroup × (DIEmember/DIEgroup)

where—

DAmember is the disallowable amount of the member of the interest group,

DAgroup is the disallowable amount of the interest group,

DIEmember is the deductible interest equivalent of the member of the interest group, and

DIEgroup is the deductible interest equivalent of the interest group.

(7) Where a reporting company and each member of the interest group concerned jointly notify the Revenue Commissioners, in the form specified by the Revenue Commissioners for that purpose, that the disallowable amount, or a portion of the disallowable amount, of the interest group should be deemed to be the disallowable amount of a member of the interest group, the disallowable amount of that member shall be the amount so notified.

(8) A disallowable amount allocated under subsection (7) to a member of an interest group in an accounting period shall not exceed the deductible interest equivalent of that group member for that accounting period.

(9) Subject to subsection (10), the total spare capacity of a member of an interest group arising in an accounting period shall be calculated as follows:

TSCmember = TSCgroup × (TIEmember/TIEgroup)

where—

TSCmember is the total spare capacity of the member of the interest group,

TSCgroup is the total spare capacity of the interest group,

TIEmember is the taxable interest equivalent of the member of the interest group, and

TIEgroup is the taxable interest equivalent of the interest group.

(10) Where a reporting company and each member of the interest group concerned jointly notify the Revenue Commissioners, in the form specified by the Revenue Commissioners for that purpose, that the total spare capacity, or a portion of the total spare capacity, of the interest group should be deemed to be the total spare capacity of a member of the interest group, the total spare capacity of that member shall be the amount so notified.

(11) For the purposes of the application of section 835AAD or 835AAE to an interest group, a reference in the section concerned to a relevant entity shall be construed as a reference to a member of an interest group.

(12) Where—

(a) an amount of total spare capacity is carried forward from a preceding accounting period by a member of an interest group, and

(b) the reporting company of the interest group and each member of the interest group concerned jointly notify the Revenue Commissioners, in the form specified by the Revenue Commissioners for that purpose, that the total spare capacity so carried forward, or a portion of that total spare capacity, should be reallocated to a member of the interest group,

the total spare capacity so notified shall be allocated to the member of the interest group.

(13) Subject to subsection (14), where the relevant entity is an interest group, section 835AAI shall apply subject to the modification that the relevant entity’s ratio of equity over total assets shall be calculated on the basis of a consolidation of the results of the members of the interest group as if each member of the interest group had a common ultimate parent resident in the State prepared under the same body of accounting standards and same accounting policies as applies to the ultimate consolidated financial statements of the worldwide group concerned, but where a member of an interest group is a branch or agency of a company not resident in the State, then the results of that member of the interest group shall be the results of the branch or agency.

(14) Where members of an interest group hold investments in companies which are not members of an interest group, and such investments would, but for this subsection, be fully consolidated in the results of the members of an interest group prepared pursuant to subsection (13), those investments shall, for the purposes of subsection (13) be accounted for at cost, measured at the lower of their carrying amount and fair value less costs to sell, as if the relevant entity was a company required to prepare non-consolidated financial statements.

(15) A payment for relief shall not—

(a) be taken into account in computing profits or losses of either the payor or the recipient of the payment for relief for corporation tax purposes, and

(b) be regarded as a distribution or a charge on income for any of the purposes of the Corporation Tax Acts.

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Inserted by FA21 s31(3). Comes into operation on 1 January 2022.