267H Application (Chapter 6).

(1) Subject to subsection (2), this Chapter shall apply to a payment, being interest or royalties, made—

(a) by either—

(i) a company resident in the State, or

(ii) a company not so resident which carries on a trade in the State through a permanent establishment if, in relation to the trade the interest gives, or as the case may be the royalties give, rise to a deduction under section 81 or 97 or relief under Part 8,

(b) to or for the benefit of—

(i) where subparagraph (ii) does not apply, a company which—

(I) is the beneficial owner of the interest, or as the case may be the royalties, and

(II) is, by virtue of the law of a Member State other than the State, resident for the purposes of tax in such a Member State,

or

(ii) a permanent establishment—

(I) which is situated in a Member State (in this subparagraph referred to as the “first Member State”) other than the State,

(II) which is treated as the beneficial owner of the interest, or as the case may be the royalties, and

(III) through which a company, which is (by virtue of the law of a Member State other than the State) resident for the purposes of tax in such a Member State, carries on a business in the first Member State,

if the company referred to in paragraph (a) is an associated company of the company referred to in paragraph (b).

(2) This Chapter shall not apply to—

(a) interest or royalties paid—

(i) to a company where the debt-claim, right or asset in respect of which the payment is made consists of property or rights used by, or held by or for, a permanent establishment of the company through which the company carries on a trade—

(I) in the State, or

(II) in a territory which is not a Member State,

or

(ii) by a company for the purposes of a business carried on by it through a permanent establishment in a territory which is not a Member State,

(b) interest on a debt-claim in respect of which there is no provision for repayment of the principal amount or where the repayment is due more than 50 years after the creation of the debt, or

(c) so much of any royalties paid as exceeds the amount which would have been agreed by the payer, and the beneficial owner, of the royalties if they were independent persons acting at ^[2]>arms’^<[2][2]>arm’s^<[2] length.