Irish Revenue updated the anti-hybrid provisions in its tax manual on March 29. The update reflects amendments made by Finance Act 2020 with respect to how the anti-hybrid rules apply to a worldwide system of taxation. The updates also significantly expand the guidance in the manual.
The guidance, originally published in July 2020, outlines the anti-hybrid rules introduced by Finance Act 2019. It describes what is meant by a mismatch outcome, sets forth a test for inclusion, and explains interactions with other tax provisions.
In addition to reflecting the Finance Act 2020 updates, the latest version of the manual nearly doubles the amount of guidance – from 23 to 45 pages – by adding several new and expanded sections.
One new section outlines the various tests for association and when these tests should be considered. Other new guidance on “payee” defines the term and how it is applied when testing for a hybrid mismatch. A new section on “imported mismatches” describes the policy intent behind the rule and how it might apply in practice. There is also new guidance on what is meant by “reasonable to consider” and “reasonably be expected to be aware” under the “state of knowledge/awareness test.”
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