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Chapter 4
Income Tax, Corporation Tax and Capital Gains Tax
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Amendment of section 198 (certain interest not to be chargeable) of Principal Act.
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34.—(1) Section 198 of the Principal Act is amended by the substitution for subsection (1) of the following:
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“(1) (a) In this subsection—
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‘arrangements’ means arrangements having the force of law by virtue of section 826;
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‘relevant territory’ means—
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(i) a Member State of the European Communities other than the State, or
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(ii) not being such a Member State, a territory with the government of which arrangements have been made;
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‘tax’, in relation to a relevant territory, means any tax imposed in that territory which corresponds to corporation tax in the State.
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(b) For the purposes of this subsection, a company shall be regarded as being a resident of a relevant territory if—
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(i) in a case where the relevant territory is a territory with the government of which arrangements have been made, the company is regarded as being a resident of that territory under those arrangements, and
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(ii) in any other case, the company is by virtue of the law of the relevant territory resident for the purposes of tax in that territory.
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(c) Notwithstanding any other provision of the Income Tax Acts but without prejudice to any charge under the Corporation Tax Acts on the profits of such a person—
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(i) a company not resident in the State or a person not ordinarily resident in the State shall not be chargeable to income tax in respect of interest paid by—
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(I) a company in the course of carrying on relevant trading operations (within the meaning of section 445 or 446), or
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(II) a specified collective investment undertaking (within the meaning of section 734),
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and
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(ii) a company shall not be chargeable to income tax in respect of interest paid by a relevant person (within the meaning of section 246) in the ordinary course of a trade or business carried on by that person if the company—
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(I) is not resident in the State, and
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(II) is regarded for the purposes of this subsection as being a resident of a relevant territory.”.
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(2) Subsection (1) shall apply as respects interest paid in the year of assessment 2000-2001 and subsequent years of assessment.
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