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Amendment of section 831 of Principal Act (implementation of Council Directive No. 90/435/EEC concerning the common system of taxation applicable in the case of parent companies and subsidiaries of different Member States)
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34. (1) Section 831 of the Principal Act is amended—
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(a) in subsection (1)(a) by deleting the definition of “arrangements”,
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(b) in subsection (1)(a), in the definition of “bilateral agreement”, by substituting “arrangements having the force of law by virtue of section 826(1)” for “arrangements”,
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(c) in subsection (3)(a), by substituting “arrangements having the force of law by virtue of section 826(1) ” for “arrangements”, and
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(d) by inserting the following after subsection (6) —
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“(7) (a) Subsections (1) to (5) shall not apply to an arrangement or a series of arrangements which—
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(i) has been put in place for the main purpose of, or one of the main purposes of which is, obtaining a tax advantage that defeats the object or purpose of the Directive, and
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(ii) is not genuine having regard to all the facts and circumstances.
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(b) For the purposes of paragraph (a)(ii), an arrangement or series of arrangements shall be regarded as not genuine to the extent that it is not put into place for valid commercial reasons which reflect economic reality.
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(c) In this subsection and subsection (6), an arrangement may comprise more than one step or part.”.
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(2) This section shall have effect in respect of distributions made or received on or after the date of passing of this Act.
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