On 29 June 2022, the Irish Revenue published an eBrief No. 137/22 to announce a manual to update the guidance on anti-hybrid rules. Accordingly, Tax and Duty Manual Part 35C-00-01 – Guidance on the Anti-hybrid rules – has been updated for Finance Act 2021 to reflect amendments to the following sections:
- Section 3: Interpretation (Section 835Z) for the broadening of the definition of “entity” to include forms of business that do not have legal personality,
- Section 5: Worldwide system of taxation (Section 835AB) for the broadening of the scope of that section to include situations where an individual payee or investor is subject to a system, or effective system, of worldwide taxation,
- Section 7: Associated enterprises (Section 835AA) for updates made to paragraph (e) and (f) of subsection (2) to ensure the provision operates as intended and the insertion of a new segment setting out the application of the “associated enterprises” test to Irish partnerships,
Insertion of a new section:
- Section 12: Reverse hybrid rule to reflect the introduction of Chapter 10A Reverse hybrid mismatches into Part 35C in line with the deadline prescribed by ATAD2.
- The section sets out relevant definitions and provides guidance on the operation of the rule.
