835AL Payment to hybrid entity deduction without inclusion mismatch outcome.

(1) A payment to a hybrid entity deduction without inclusion mismatch outcome shall arise in respect of a payment to a hybrid entity where—

(a) there is, or but for this section would be, a deduction in the payer territory without a corresponding amount being included in the payee territory, and

(b) the satisfaction of the condition described in paragraph (a) is attributable to differences in the allocation of payments to a hybrid entity between—

(i) the territory in which the hybrid entity is established, and

(ii) the territory in which the participator concerned is established.

(2) A payment to a hybrid entity deduction without inclusion mismatch outcome shall be neutralised, where the State is the payer territory, notwithstanding any other provision of the Tax Acts and the Capital Gains Tax Acts, by denying the payer a deduction for the payment for the purposes of domestic tax, to the extent a corresponding amount has not been included for the purposes of foreign tax.