452A Application of section 130 of Principal Act to certain non-yearly interest.

(1) In this section—

“additional tax”, in relation to a territory in respect of a qualifying company for an accounting period, means the amount determined by the formula—

A × B/100

where—

A is the specified amount for that territory in respect of the qualifying company for the accounting period, and

B is the rate per cent specified in section 21(1)(f);

“deductible amount”, in relation to a territory in respect of a qualifying company for an accounting period, means the amount determined by the formula—

C × D/E

where—

C is the specified amount for that territory in respect of the qualifying company for the accounting period,

D is the specified tax in relation to such specified amount, and

E is the additional tax in relation to that specified amount;

“foreign tax in respect of a qualifying company for an accounting period” means, in relation to a company carrying on business in a territory, the amount determined by the formula—

F × G/100

where—

F is so much of the specified amount for the territory in respect of the qualifying company for the accounting period as is payable to the company carrying on business, and

G is the rate per cent of tax in the territory which is chargeable on—

(a) interest received in the territory by a company from sources outside the territory, or

(b) where the amount of interest payable to the company carrying on business is taken into account in computing business profits of that company, business profits;

“interest” means interest other than—

(a) yearly interest, and

(b) interest to which subsection (2B) of section 130, subsection (2)(a), ^[2]>(3)(a)^<[2] or (3A)(a) of section 452 or subsection (2) of section 845A applies;

“qualifying company” means a company—

(a) which advances money in the ordinary course of a trade carried on in the State which includes the lending of money, and

(b) for which any interest payable in respect of money so advanced is taken into account in computing the income of that trade of the company;

“specified amount”, in relation to a territory in respect of a qualifying company for an accounting period, means the amount of specified interest that is payable for that accounting period by the qualifying company to a company or more than one company carrying on a business in the territory where the interest is taken into account in that territory in computing the income, profits or gains of that business;

“specified interest”, in relation to a qualifying company, means interest, payable by the company in the course of a trade referred to in the definition of “qualifying company”, which apart from this section, would be treated as a distribution by virtue only of section 130(2)(d)(iv);

“specified tax”, in relation to a specified amount in respect of a qualifying company for an accounting period, means the lesser of—

(a) the additional tax in relation to that specified amount, and

(b) the aggregate amount of foreign tax in respect of the qualifying company for the accounting period, in relation to companies carrying on business in the territory to which the specified amount relates;

“territory” means a territory other than a relevant territory within the meaning of section 246.

(2) Section 130(2)(d)(iv) shall not apply to the deductible amount for a territory in respect of a qualifying company for an accounting period.