Revenue eBrief No. 303/24
10 December 2024
Guidance on Anti-Hybrid Rules
Tax and Duty Manual Part 35C-00-01Part 35C-00-01 has been updated as follows:
- Section 1: Introduction to hybrid mismatches, to clarify that OECD guidance on hybrid mismatches cannot be relied upon to disapply the hybrid mismatch rules in ATAD2, as transposed into Part 35C.
- Section 2: Mismatch outcomes, updated to introduce the concept of primary and defensive anti-hybrid rules.
- Section 3: Interpretation (Section 853Z), updated to include definitions of ‘deduction’ and ‘structured arrangement’.
- Section 4.2.1 Section 835Z(1)(a), updated to include an example of a territory that applies tax to some, but not all, entities.
- Section 5.1 Worldwide system of taxation, updated to include guidance on how to deal with loss making branches with trapped losses
- Section 7.1.1 Associated enterprises, updated to clarify scenarios where a 50 per cent Associated Enterprise Test Applies instead of a 25 per cent test.