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110.—(1) In this section—
‘authorised officer’ means an officer of the Revenue Commissioners authorised by them in writing for the purposes of this section;
‘qualifying asset’, in relation to a qualifying company, means an asset which consists of, or of an interest in, a financial asset;
‘financial asset’ includes—
(a) shares, bonds and other securities,
(b) futures, options, swaps, derivatives and similar instruments,
(c) invoices and all types of receivables,
(d) obligations evidencing debt (including loans and deposits),
(e) leases and loan and lease portfolios,
(f) hire purchase contracts,
(g) acceptance credits and all other documents of title relating to the movement of goods, and
(h) bills of exchange, commercial paper, promissory notes and all other kinds of negotiable or transferable instruments;
‘qualifying company’ means a company—
(a) which is resident in the State,
(b) which—
(i) acquires qualifying assets from a person,
(ii) as a result of an arrangement with another person holds or manages qualifying assets, or
(iii) has entered into a legally enforceable arrangement with another person which arrangement itself constitutes a qualifying asset,
(c) which carries on in the State a business of holding, managing, or both the holding and management of, qualifying assets,
(d) which, apart from activities ancillary to that business, carries on no other activities,
(e) in relation to which company—
(i) the market value of all qualifying assets held or managed, or
(ii) the market value of all qualifying assets in respect of which the company has entered into legally enforceable arrangements,
is not less than €10,000,000 on the day on which the qualifying assets are first acquired, first held, or an arrangement referred to in subparagraph (iii) of paragraph (b) is first entered into, by the company, and
(f) which has notified in writing the authorised officer in a form prescribed by the Revenue Commissioners that it is or intends to be a company to which paragraphs (a) to (e) apply and has supplied such other particulars relating to the company as may be specified on the prescribed form,
but a company shall not be a qualifying company if any transaction or arrangement is entered into by it otherwise than by way of a bargain made at arm's length, apart from a transaction or arrangement where subsection (4) applies to any interest or other distribution payable under the transaction or arrangement unless the transaction or arrangement concerned is excluded from that provision by virtue of subsection (5).
(2) For the purposes of the Tax Acts, profits arising to a qualifying company, in relation to activities carried out by it in the course of its business, shall, notwithstanding any other provisions of the Tax Acts, be treated as annual profits or gains within Schedule D and shall be chargeable to corporation tax under Case III of that Schedule, and for that purpose—
(a) the profits or gains shall be computed in accordance with the provisions applicable to Case I of that Schedule,
(b) there shall be deducted, in computing the amount of the profits or gains to be charged to tax, the amount, in so far as it is not—
(i) otherwise deductible, or
(ii) recoverable from any other person or under any insurance, contract of indemnity or otherwise,
of any debt which is proved to be bad and of a doubtful debt to the extent that it is estimated to be bad, and
(c) where at any time an amount or part of an amount which had been deducted under paragraph (b) is recovered or is no longer estimated to be bad, the amount which had been deducted shall, in so far as it is recovered or no longer estimated to be bad, be treated as income of the qualifying company at that time.
(3) (a) Notwithstanding Chapter 5 of Part 12, a qualifying company shall not be eligible to surrender in accordance with that Chapter any amount eligible for relief from corporation tax.
(b) (i) Where in an accounting period a qualifying company incurs a loss, the company may make a claim requiring that the amount of the loss be set off against the amount of any profits of the company for any subsequent accounting period for so long as the company continues to be a qualifying company, and the company's profits for any accounting period shall be treated as reduced by the amount of the loss.
(ii) The claim referred to in subparagraph (i) shall be included with the return which the company is required to make under section 951 for the subsequent accounting period concerned.
(iii) The amount of a loss incurred by a qualifying company in an accounting period shall be computed for the purposes of this paragraph in the same way as any profits of the company in that period would have been computed under subsection (2).
(4) Any interest or other distribution which is paid out of the assets of a qualifying company to another person and is so paid in respect of a security referred to in section 130(2)(d)(iii) shall not be a distribution by virtue only of section 130(2)(d)(iii) unless the application of this subsection is excluded by subsection (5).
(5) (a) Subject to paragraph (b), subsection (4) shall not apply in respect of any interest or other distribution paid or payable out of the assets of a qualifying company if such interest or other distribution has been paid as part of a scheme or arrangement the main purpose or one of the main purposes of which is to obtain a tax relief or the reduction of a tax liability, in either case arising from the operation of subsection (4), by a person within the charge to corporation tax (in this subsection referred to as the ‘beneficiary’) and the beneficiary is the person—
(i) from whom the qualifying assets were acquired by the qualifying company, or
(ii) with whom the qualifying company has entered into an arrangement referred to in subparagraph (ii) or (iii) of paragraph (b) of the definition of ‘qualifying company’.
(b) Paragraph (a) shall only apply where the qualifying company concerned is, at the time of the acquisition of the asset or the entering into of the arrangement, in possession, or aware, of information which can reasonably be used by it to identify the beneficiary.”.
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