The CFC rules are an anti-abuse measure, designed to prevent the artificial diversion of profits from controlling companies to offshore entities in low or no-tax jurisdictions (the CFCs). The rules operate by attributing undistributed income of the CFCs, arising from non-genuine arrangements put in place for the essential purpose of avoiding tax, to the controlling company, or a connected company in the State for taxation, where the controlling company, or a connected company, carry out relevant Irish activities (i.e. significant people functions (SPFs) or key entrepreneurial risk-taking functions (KERTs) in the State). In that regard, the CFC rules focus less on substance in the CFC and focus more on what activity is being carried out on its behalf in the controlling company.  The rules require an analysis as to the extent to which the CFC would hold assets or bear risks were it not for the controlling company, or a connected company, undertaking the SPFs or KERTs in relation to those assets and risks.