Taxes Consolidation Act, 1997 (Number 39 of 1997)
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835AB Worldwide system of taxation.
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(1) Subject to subsection (3), this section applies where an entity is taxable in an investor or payee territory (in this section referred to as the “first-mentioned territory” ) such that payments (in this section referred to as “disregarded payments” ) between—
(a) the head office of the entity and a permanent establishment of that entity,
(b) two or more permanent establishments of the entity,
(c) where the entity is a participator in a hybrid entity, the entity and the hybrid entity, [2]>or<[2]
(d) where the entity is a participator in [3]>two or more such hybrid entities,<[3][3]>two or more such hybrid entities, or<[3]
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(e) where the entity is an entity on which a controlled foreign company charge or foreign company charge is made in respect of two or more hybrid entities, two or more such hybrid entities,
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are disregarded when computing the taxable profits of the entity in the first-mentioned territory under a provision of the law of that territory similar in effect to section 26(1).
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(1) Subject to subsection (3), this section applies where an enterprise is taxable in an investor or payee territory (in this section referred to as the ‘first-mentioned territory’) such that payments (in this section referred to as ‘disregarded payments’) between—
(a) the head office of an entity and a permanent establishment of that entity,
(b) two or more permanent establishments of an entity,
(c) an individual and a permanent establishment of that individual,
(d) two or more permanent establishments of an individual,
(e) where an enterprise is a participator in a hybrid entity, the enterprise and the hybrid entity,
(f) where an enterprise is a participator in two or more such hybrid entities, two or more such hybrid entities, or
(g) where an entity is an entity on which a controlled foreign company charge or foreign company charge is made in respect of two or more hybrid entities, two or more such hybrid entities,
are disregarded when computing the taxable profits of the enterprise in the first-mentioned territory under a provision of the law of that territory similar in effect to section 26(1), or subparagraph (i) or (ii) of paragraph (a) of subsection (1) of Schedule D in section 18.
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(2) Where—
(a) this section applies, and
(b) a payment is deductible in a case in which—
(i) the amount deducted would be deducted against dual inclusion income, or
(ii) the deduction would not result in a deduction without inclusion mismatch outcome,
but for the fact that the amount against which the payment is deductible in the payer territory is a disregarded payment in the first-mentioned territory,
the disregarded payment shall be treated as included in the first- mentioned territory.
(3) This section shall not apply where—
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(a) the disregarded payments are between—
(i) where the entity referred to in subsection (1) is a participator in a hybrid entity, the entity and the hybrid entity, [5]>or<[5]
(ii) where the entity referred to in subsection (1) is a participator in [6]>two or more such hybrid entities,<[6][6]>two or more such hybrid entities, or<[6]
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(iii) where the entity referred to in subsection (1) is an entity on which a controlled foreign company charge or foreign company charge is made in respect of two or more hybrid entities, two or more such hybrid entities,
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and
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(a) the disregarded payments are between—
(i) where the enterprise referred to in subsection (1) is an individual, an individual and a permanent establishment of the individual,
(ii) where the enterprise referred to in subsection (1) is an individual, two or more permanent establishments of the individual,
(iii) where the enterprise referred to in subsection (1) is a participator in a hybrid entity, the enterprise and the hybrid entity,
(iv) where the enterprise referred to in subsection (1) is a participator in two or more hybrid entities, two or more such hybrid entities, or
(v) where the entity referred to in subsection (1) is an entity on which a controlled foreign company charge or foreign company charge is made in respect of two or more hybrid entities, two or more such hybrid entities, and
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(b) there is, in substance, a hybrid mismatch (either within the meaning of Directive (EU) 2016/1164 or within the meaning of that term when construed in a manner consistent with its use in the reports referred to in section 835Z(2)).
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