Taxes Consolidation Act, 1997 (Number 39 of 1997)
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452 Application of section 130 to certain interest.
[FA88 s37; FA94 s49]
(1) (a) In this section—
“qualified company” and “relevant trading operations” have the same meanings as they have for the purposes of sections 445 and 446, but trading operations shall not be treated as relevant trading operations (within the meaning of section 445) if they are not trading operations which could be certified by the Minister for Finance as relevant trading operations for the purposes of section 446 if they were carried on in the Area (within the meaning of section 446) rather than in the airport (within the meaning of section 445);
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“resident of the United States of America” has the meaning assigned to it by the Convention set out in Schedule 25.
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(b) For the purposes of this section, a company shall be regarded as being a resident of a territory, [2]>other than the United States of America,<[2] if it is so regarded under arrangements made with the government of that territory and having the force of law by virtue of section 826.
(2) This section shall apply to so much of any interest as—
(a) is a distribution by virtue only of section 130(2)(d)(iv),
(b) is payable by a qualified company in the course of carrying on relevant trading operations and would but for section 130(2)(d)(iv) be deductible as a trading expense in computing the amount of the company’s income from the relevant trading operations, and
(c) is interest payable to a company which is a resident [3]>of the United States of America or<[3] of a territory with the government of which arrangements having the force of law by virtue of section 826 have been made.
(3) Where a company proves that this section applies to any interest payable by it for an accounting period and elects to have that interest treated as not being a distribution for the purposes of section 130(2)(d)(iv), then, section 130(2)(d)(iv) shall not apply to that interest.
(4) An election under this section in relation to interest payable by a company for an accounting period shall be made in writing to the inspector and furnished together with the company’s return of its profits for the period.
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452 Application of section 130 to certain interest.
(1) (a) In this section—
“arrangements” means arrangements having the force of law by virtue of [5]>section 826<[5][8]>[5]>section 826(1)(a)<[5]<[8][8]>section 826(1)<[8] [9]>or arrangements made with the government of a territory which on completion of the procedures set out in section 826(1) will have the force of law;<[9]
“relevant territory” means—
(i) a Member State of the European Communities other than the State, or
(ii) not being such a Member State, a territory with the government of which arrangements have been made;
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“qualified company” and “relevant trading operations” have the same meanings as they have for the purposes of sections 445 and 446, but trading operations shall not be treated as relevant trading operations (within the meaning of section 445) if they are not trading operations which could be certified by the Minister for Finance as relevant trading operations for the purposes of section 446 if they were carried on in the area (within the meaning of section 446) rather than the airport (within the meaning of section 445);
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“tax”, in relation to a relevant territory, means any tax imposed in that territory which corresponds to corporation tax in the State.
(b) For the purposes of this section, a company shall be regarded as being a resident of a relevant territory if—
(i) in a case where the relevant territory is a territory with the government of which arrangements have been made [10]>and have effect in accordance with the provisions of those arrangements<[10], the company is regarded as being a resident of that territory under those arrangements, and
(ii) in any other case, the company is by virtue of the law of the relevant territory resident for the purposes of tax in that territory.
(2) (a) This paragraph shall apply to so much of any interest as—
(i) is a distribution by virtue only of section 130(2)(d)(iv),
(ii) is payable by a company in the ordinary course of a trade carried on by that company and would, but for section 130(2)(d)(iv), be deductible as a trading expense in computing the amount of the company’s income from the trade, and
(iii) is interest payable to a company which is a resident of a relevant territory.
(b) Where a company proves that paragraph (a) applies to any interest payable by it for an accounting period and elects to have that interest treated as not being a distribution for the purposes of section 130(2)(d)(iv), then, section 130(2)(d)(iv) shall not apply to that interest.
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(3) (a) This paragraph shall apply to so much of any interest as—
(i) is a distribution by virtue only of section 130(2)(d)(iv),
(ii) is payable by a qualified company in the course of carrying on relevant trading operations and would but for section 130 (2)(d)(iv) be deductible as a trading expense in computing the amount of the company’s income from the relevant trading operations, and
(iii) represents no more than a reasonable commercial return for the use of the principal in respect of which the interest is paid by the qualified company.
(b) Where a qualified company proves that paragraph (a) applies to any interest payable by it for an accounting period and elects to have that interest treated as not being a distribution for the purposes of section 130(2)(d)(iv), then, section 130(2)(d)(iv) shall not apply to that interest.
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(3A) (a) This paragraph shall apply to so much of any yearly interest as—
(i) is a distribution by virtue only of section 130(2)(d)(iv),
(ii) is payable by a company in the ordinary course of a trade carried on by that company and would, but for section 130(2)(d)(iv), be deductible as a trading expense in computing the amount of the company’s income from the trade, and
(iii) is not interest to which subsection (2)(a) applies.
(b) Where a company proves that paragraph (a) applies to any interest payable by it for an accounting period and elects to have that interest treated as not being a distribution for the purposes of section 130(2)(d)(iv), then section 130(2)(d)(iv) shall not apply to that interest.
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(4) An election under [7]>subsection (2)(b) or (3)(b)<[7][7]>subsection (2)(b)[13]>, (3)(b)<[13] or (3A)(b)<[7] in relation to interest payable by a company for an accounting period shall be made in writing to the inspector and furnished together with the company’s return of its profits for the period.
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[5]
Substituted by FA04 sched3(1)(m). This section shall have effect as on and from 25 March 2004
[7]
Substituted by FA07 s50(1)(b). Applies as respects interest paid on or after 1 February 2007.
[9]
Inserted by F(No.2)A08 s33(f)(i). This section is deemed to have come into force and takes effect as on and from 1 January 2009.
[10]
Inserted by F(No.2)A08 s33(f)(ii). This section is deemed to have come into force and takes effect as on and from 1 January 2009.