The Anti-Hybrid rules, as required by the EU Anti-Tax Avoidance Directive (‘ATAD’), were introduced in Ireland as part of Finance Act 2019 and became effective from 1 January 2020. ATAD also requires the implementation of Anti-Reverse Hybrid Mismatch rules which were introduced in Ireland as part of Finance Act 2020. These rules are effective for tax periods beginning on or after 1 January 2022.
The Anti-Reverse Hybrid Mismatch rules may bring certain entities which may otherwise be outside the scope of the charge to Irish corporation tax within scope. This will be of particular relevance to the Common Contractual Fund (‘CCF’) and the Investment Limited Partnership (‘ILP’).
The Reverse Hybrid legislation is effective for periods commencing on or after 1 January 2022. Where your structure includes either of these entity types you need to consider carefully whether these rules could impact the tax status of the entity, in particular, where one investor holds, directly or indirectly, 25% or more of the ownership rights, voting power or profits of the entity. Where the 25% holding is exceeded, further analysis would be required to determine whether any exemption may apply or whether a Hybrid Mismatch outcome could arise.
For more information on how this may impact your organisation or for any further details, please contact us today.
Sinead Colreavy, Tax Partner – email@example.com
Steffi Ferguson, Tax Senior Manager – firstname.lastname@example.org
Saoirse Burke, Tax Senior – email@example.com