Titan Europe 2007-1 (NHP) Limited - Irish Stock Exchange

IRISH TAXATION
The following is a summary based on the laws and practices currently in force in Ireland regarding
the tax position of investors beneficially owning their Notes and should be treated with appropriate
caution. Particular rules may apply to certain classes of taxpayers holding Notes. The summary does not
constitute tax or legal advice and the comments below are of a general nature only. Prospective investors
in the Notes should consult their professional advisers on the tax implications of the purchase, holding,
redemption or sale of the Notes and the receipt of interest thereon under the laws of their country of
residence, citizenship or domicile. Prospective investors should be aware that the anticipated tax
treatment in Ireland summarised below may change.
Taxation of the Issuer
Corporation Tax
In general, companies resident in Ireland for the purposes of Irish tax must pay corporation tax on their
income at the rate of 12.5 per cent. in relation to trading income and at the rate of 25 per cent. in relation to
income that is not income from a trade. However, Section 110 of the Taxes Consolidation Act of Ireland as
amended 1997 (“TCA 1997”) provides for special treatment in relation to qualifying companies. A qualifying
company means a company:
(a) which is resident in Ireland;
(b) which either acquires qualifying assets from a person, holds, manages or both holds and manages
qualifying assets as a result of an arrangement with another person, or has entered into a legally
enforceable arrangement with another person which itself constitutes a qualifying asset;
(c) which carries on in Ireland a business of holding qualifying assets or managing qualifying assets or
both;
(d) which, apart from activities ancillary to that business, carries on no other activities;
(e) which has notified an authorised officer of the Revenue Commissioners in the prescribed format that it
is or intends to be such a qualifying company; and
(f) the market value of all qualifying assets held or managed by the company or the market value of all
qualifying assets in respect of which the company has entered into legally enforceable arrangements is
not less than €10,000,000 on the day on which the qualifying assets are first acquired, first held, or a
legally enforceable arrangement in respect of the qualifying assets is entered into (which is itself a
qualifying asset),
but a company shall not be a qualifying company if any transaction is carried out by it otherwise than by
way of a bargain made at arm’s length apart from where that transaction is the payment of consideration for the
use of principal (other than where that consideration is paid to certain companies within the charge of Irish
corporation tax as part of a scheme of tax avoidance).
A qualifying asset is a financial asset or an interest in a financial asset.
If a company is a qualifying company for the purpose of Section 110 TCA 1997, then profits arising from
its activities shall be chargeable to corporation tax under Case III of Schedule D (which is applicable to nontrading
income) at a rate of 25 per cent. However, for that purpose those profits shall be computed in
accordance with the provisions applicable to Case I of the Schedule (which is applicable to trading income). On
this basis and on the basis that the interest on the Notes:
(a) does not represent more than a reasonable commercial return on the principal outstanding and it is not
dependant on the results of the company’s business; or
(b) it is not paid to certain companies within the charge of Irish corporation tax as part of a scheme of tax
avoidance, then
the interest in respect of the Notes issued will be deductible in determining the taxable profits of the
company.
207