835AL Payment to hybrid entity deduction without inclusion mismatch outcome

Summary

This section sets out what is meant by a payment to hybrid entity deduction without inclusion mismatch outcome and provides the rule to neutralise such an outcome.

Details

(1) Payment to hybrid entity deduction without inclusion mismatch outcome

A payment to hybrid entity deduction without inclusion mismatch outcome shall arise where –

• (a) there is a deduction in the payer territory without a corresponding amount being included in the payee territory, and
• (b) the reason why the income is not included in the payee territory is because of differences in the way payments to a hybrid entity are allocated between—

1. 1. the territory in which the hybrid entity is established, and
   2. the territory in which the participator concerned is established.

(2) The primary rule

Where the State is the payer territory the payer shall be denied a deduction for so much of the payment which gives rise to a deduction without inclusion mismatch outcome.

Relevant Date: Finance Act 2019