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Amendment of Part 35B of Principal Act (implementation of Articles 7 and 8 of Council Directive (EU) 2016/1164 of 12 July 2016 (Controlled Foreign Companies))
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98. Part 35B of the Principal Act is amended—
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(a) in section 835I(1), by the insertion of the following definitions:
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“ ‘amount of foreign qualified domestic top-up tax payable or borne by a controlled foreign company’ means—
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(a) an amount of foreign qualified domestic top-up tax that is payable or borne by the controlled foreign company, or
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(b) where an amount of foreign qualified domestic top-up tax is payable or borne by an entity under the laws of the territory in which the controlled foreign company is located, for the purposes of the qualified domestic top-up tax laws of the territory, in respect of the aggregate profits of that controlled foreign company and one or more other entities, taken together as a single taxable entity, the amount of foreign qualified domestic top-up tax that is apportioned to the controlled foreign company on a just and reasonable basis;
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‘corresponding qualified domestic top-up tax’ means an amount of qualified domestic top-up tax that would be payable or borne by the controlled foreign company, if the controlled foreign company was located in the State, in accordance with section 111D, and section 111AAO did not apply;
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‘fiscal year’ has the meaning given to it in section 111A(1);
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‘foreign qualified domestic top-up tax’ means a qualified domestic top-up tax arising under the laws of a territory, other than the State;
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‘qualified domestic top-up tax’ has the meaning given to it in section 111A(1);”,
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(b) in section 835S—
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(i) in subsection (2)—
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(I) in paragraph (a), by the substitution of “period,” for “period, and”,
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(II) in paragraph (b), by the substitution of “period, and” for “period.”, and
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(III) by the insertion of the following paragraph after paragraph (b):
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“(c) the amount of foreign qualified domestic top-up tax payable or borne by the controlled foreign company for that accounting period.”,
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(ii) by the substitution of the following subsection for subsection
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(3): “(3) In subsection (2)—
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(a) references to an amount paid, payable or borne do not include so much of any such amount as has been or falls to be repaid to the controlled foreign company or any other person on the making of a claim or otherwise, and
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(b) references to an amount of foreign qualified domestic top-up tax payable or borne do not include so much of any amount of foreign qualified domestic top-up tax that is not paid within 4 years from the end of the fiscal year in which it becomes due.”,
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and
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(iii) by the insertion of the following subsection after subsection (4):
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“(5) The amount of creditable tax to be allowed against corporation tax in respect of any controlled foreign company charge for an accounting period shall not include any amount in respect of:
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(a) a qualified IIR (within the meaning of section 111A(1)), or
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(b) a qualified UTPR (within the meaning of section 111A(1)).”,
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and
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(c) in section 835T—
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(i) by the substitution of the following subsection for subsection (2):
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“(2) This subsection applies where the aggregate of the amount of foreign tax and the foreign qualified domestic top-up tax, which is paid, payable or borne by a controlled foreign company for an accounting period, is not less than the difference between—
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(a) the aggregate of—
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(i) the corresponding corporation tax in the State for that accounting period, and
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(ii) the corresponding qualified domestic top-up tax for that accounting period,
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and
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(b) the aggregate of—
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(i) the amount of such foreign tax paid or borne for the accounting period, and
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(ii) the amount of foreign qualified domestic top-up tax for the accounting period.”,
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and
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(ii) by the insertion of the following subsection after subsection (3):
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“(4) In this section—
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(a) references to the amount of foreign tax paid or borne do not include so much of any such amount as has been or falls to be repaid to the controlled foreign company or any other person on the making of a claim or otherwise, and
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(b) references to the amount of foreign qualified domestic top-up tax, which is payable or borne do not include so much of any such amount as has been or falls to be repaid to the controlled foreign company or any other person on the making of a claim or otherwise or where payable is not paid or borne by the controlled foreign company.”.
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