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Connected

The payer and payee are connected if they meet the participation condition in TIOPA10/S148. The participation condition is met when one of the two affected persons is directly or indirectly participating in the management, control or capital of the other, or a third person was participating in the management, control or capital of both the affected persons. See INTM412020 for further detail.

For the purposes of S917A, reference to the ‘actual provision� in TIOPA10/S148 are to be read as the provision made or imposed between the payer and the payee in respect of the royalty payment being made.

Received

ITA07/S917A(4) determines that a payment is received by a payee if received directly or indirectly or by one payment or a series of payments.

Payment

The character of the payment received is not of importance. This means that, for example, a royalty could be paid to an intermediary, who then makes an onward payment of a different nature. If the conditions of S917A are met, the royalty payment would be denied benefits under the relevant treaty.