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Taxes Consolidation Act, 1997 (Number 39 of 1997)

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Chapter 10A

Reverse hybrid mismatches

835AVA. Interpretation (Chapter 10A)

(1) In this Chapter—

collective investment scheme” shall be construed in accordance with section 835AVB;

relevant ownership interest”, in relation to a reverse hybrid entity, shall be construed in accordance with subsection (4);

relevant participator”, in relation to a reverse hybrid entity, means a participator with a relevant ownership interest in the reverse hybrid entity;

reverse hybrid entity” means a hybrid entity established in the State—

(a) that, for the purposes of the Acts, is not chargeable to tax in respect of its profits or gains, because those profits or gains are treated, or would be so treated but for an insufficiency of profits or gains, as arising or accruing to the participators in the hybrid entity, and

(b) some or all of the profits or gains of which are regarded, for the purposes of the tax law of the territory in which a participator in the hybrid entity is established, as arising or accruing to the hybrid entity on its own account;

reverse hybrid mismatch outcome” shall be construed in accordance with section 835AVD.

(2) In this Chapter, “associated entities” has the meaning given to “associated enterprises” by section 835AA, subject to the following modifications:

(a) a reference, in that section, to ‘enterprise’ shall be construed as a reference to ‘entity’;

(b) a reference, in subsection (2) of that section, to ‘25 per cent’ shall be construed as a reference to ‘50 per cent’; and

(c) two entities shall not be treated as acting together with respect to voting rights, share ownership rights or similar ownership rights solely because they are partners in a partnership.

(3) A reference in this Chapter to the territory in which a reverse hybrid entity is established shall be construed as a reference to the territory in which the reverse hybrid entity is registered, incorporated or created.

(4) A participator shall have a relevant ownership interest in a reverse hybrid entity where—

(a) the participator possesses or is beneficially entitled to, or the participator and its associated entities possess or are beneficially entitled to, directly or indirectly, 50 per cent or more of the ownership rights in the reverse hybrid entity,

(b) the participator is, or the participator and its associated entities are, entitled to exercise, directly or indirectly, 50 per cent or more of the voting power in the reverse hybrid entity, or

(c) the participator holds, or the participator and its associated entities hold, directly or indirectly, rights giving rise to an entitlement to 50 per cent or more of the profits of the reverse hybrid entity.

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Inserted by FA21 s30(1)(f). Comes into operation on 1 January 2022.