Article 12(1)(u) of the Income Tax Act has been amended to limit the applicability of the participation exemption to income received from a participating holding which is not in a company resident in a country listed in the EU list of non-cooperative jurisdictions.  Indeed, the new proviso to Article 12(1(u) states that income derived from a participating holding in a body of persons resident for tax purposes in a jurisdiction that is included in the EU list of non-cooperative jurisdictions for a minimum period of three months during the year immediately preceding the year of assessment may not benefit from the participation exemption unless it proved to the satisfaction of the Commissioner that the said body of persons maintains sufficient significant people functions in that jurisdiction as is commensurate with the type and extent of the activity carried on in that jurisdiction and the income earned therefrom.  The proviso further clarifies that where the three month period during which a participating holding is resident in an county which is listed in the EU list of non-cooperative jurisdictions are consecutive and fall in two subsequent consecutive basis years, the participation exemption will not apply for both years.