Paschal Donohoe (Dublin Central, Fine Gael) | Oireachtas source

I move amendment No. 115:

In page 36, between lines 2 and 3, to insert the following: “(6) (a) In this subsection, a reference to a ‘debt’ is a reference to an amount of money owed by an acquirer to a supplier, which—

(i) arose directly from a supply of goods, services or assets under an arrangement to which section 835C(1) applies (referred to in this subsection as the ‘underlying arrangement’), and

(ii) is an amount of consideration for that supply and acquisition which, for bona fide commercial reasons, is unpaid.

(b) Where, for a chargeable period, the following is the case—

(i) a debt is owed by an acquirer to a supplier, which arose otherwise than in the course of a trade carried on by the supplier, and—

(I) where the acquirer is a company referred to in clause (I) or (II) of subparagraph (ii), the acquirer is within the charge to corporation tax and the supplier is—

(A) an individual who is resident in the State for the purposes of income tax, or

(B) a company within the charge to corporation tax,

or

(II) where the acquirer is a company referred to in clause (III) of subparagraph (ii), both the supplier and the acquirer are companies within the charge to corporation tax,

(ii) the company who is the acquirer is—

(I) a company referred to in subsection (5)(a)(ii)(I),

(II) a company referred to in subsection (5)(a)(ii)(II), or

(III) a company referred to in subsection (5)(a)(ii)(III),

(iii) where—

(I) in the case of an acquirer referred to in clause (I) of subparagraph (ii), the acquirer is, for the chargeable period, chargeable to tax under Case I of Schedule D in respect of profits or gains or losses and the full amount of any interest chargeable on the debt would be directly taken into account in computing the amount of those profits or gains or losses, or

(II) in the case of an acquirer referred to in clause (II) of subparagraph (ii), the acquirer is, for the chargeable period, chargeable to tax under Case V of Schedule D in respect of profits or gains or losses and the full amount of any interest chargeable on the debt would be directly taken into account in computing the amount of those profits or gains or losses, or

(III) in the case of an acquirer referred to in clause (III) of subparagraph (ii), the debt arose directly from the acquirer acquiring ordinary shares in, or subscribing for ordinary shares in, a relevant company (as referred to in clause (IV) of subsection (5)(a)(iii)) and arising from such acquisition, or subscription, as appropriate, of shares in the relevant company, the acquirer receives in the chargeable period, or in any period of three years that includes the chargeable period, an amount of dividends or other distributions, greater than a nominal amount, from the relevant company that are chargeable to tax under Schedule D or which would be chargeable to corporation tax but for section 129,

and

(iv) the arrangement which gave rise to the debt was entered into for bona fide commercial reasons and not as part of a scheme or arrangement the main purpose of which, or one of the main purposes of which, was the avoidance of tax,

then the debt owed from the acquirer to the supplier shall be deemed to be a qualifying loan arrangement within the meaning of subsection (5) and subsection (5)(c) shall apply with any necessary modifications.

(c) An underlying arrangement, which gave rise to a debt which is regarded as a qualifying loan arrangement under paragraph (b), shall not be regarded as a qualifying loan arrangement by virtue of paragraph (b).”.