Taxes Consolidation Act, 1997 (Number 39 of 1997)
This section has been deleted.
Deleted by FA12 sched1(20).
Chapter 2
Principal provisions
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448 Relief from corporation tax.
[FA80 s41(1) to (5) and (8) to (9); FA92 s54; F(No.2)A92 s1; FA94 s54(b); FA95 s61; FA97 s59(2) and Sch6 PtII par1(1) and (2)]
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(1) (a) For the purposes of this section, “relevant corporation tax” means the corporation tax which, apart from this section, [5]>sections 157, 158, 239, 241, 440, 441, 442<[5][5]>sections 22A, [9]>157, 158,<[9] 239, 241, 440, 441, 449, 644B<[5] and 827 and paragraphs 16 and 18 of Schedule 32, would be chargeable for the relevant accounting period exclusive of the corporation tax chargeable on the part of the company’s profits attributable to chargeable gains for that period.
(b) For the purposes of paragraph (a), the part of the company’s profits attributable to chargeable gains for the relevant accounting period shall be taken to be the amount brought into the company’s profits for that period for the purposes of corporation tax in respect of chargeable gains before any deduction for charges on income, expenses of management or other amounts which can be deducted from or set against or treated as reducing profits of more than one description.
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(1) (a) For the purposes of this section, references to “charges on income paid for the purposes of the sale of goods”, where they are in the course of a trade in an accounting period, shall be taken to be such amount as would be the amount of the income from the sale of goods in that period if, notwithstanding subsection (4), the reference to “the company’s income for the relevant accounting period from the sale in the course of the trade mentioned in that subsection of goods and merchandise” for the purposes of subsection (3), were to the amount of so much of the charges on income paid wholly and exclusively for the purposes of the trade in that period as appears to the inspector or on appeal to the Appeal Commissioners to be referable to charges on income paid for the purpose of the sale of goods and merchandise.
(b) For the purposes of this section, references to a “loss from the sale of goods”, where they are in the course of a trade in an accounting period, shall be such amount as would be the amount of the income from the sale of goods in that period if, notwithstanding subsection (4), the reference to “the company’s income for the relevant accounting period from the sale in the course of the trade mentioned in that subsection of goods and merchandise” for the purposes of subsection (3), were to the amount of so much of the loss, computed as for the purposes of section 396(2), from the trade in the period as appears to the inspector or on appeal to the Appeal Commissioners to be referable to a loss incurred in the sale of goods and merchandise, but a loss such as is mentioned in section 407(4)(b) shall not be a loss from the sale of goods.
(c) For the purposes of this section references to an “excess of charges on income paid for the purpose of the sale of goods”, where they are in the course of the trade in an accounting period, shall be so much of an amount, being the amount by which the charges on income paid by a company for the purpose of the sale of goods in the course of the trade in that period exceed the income from the sale of goods in the course of the trade in that period, as does not exceed the excess referred to in section 420(6) as computed for the company for that period.
(d) (i) For the purposes of this section, “relevant corporation tax” means the corporation tax which, apart from this section, sections 22A, 239, 241, 440, 441, 449, 644B and 827 and paragraphs 16 and 18 of Schedule 32, would be chargeable for the relevant accounting period exclusive of the corporation tax chargeable on the part of the company’s profits attributable to chargeable gains for that period.
(ii) For the purpose of subparagraph (i), the part of the company’s profits attributable to chargeable gains for the relevant accounting period shall be taken to be the amount brought into the company’s profits for that period for the purposes of corporation tax in respect of chargeable gains before any deduction for charges on income, expenses of management or other amounts which can be deducted from or set against or treated as reducing profits of more than one description.
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(2) (a) Subject to paragraph (b), where a company which carries on a trade which consists of or includes the manufacture of goods claims and proves as respects a relevant accounting period that during that period any amount was receivable in respect of the sale in the course of the trade of goods, corporation tax payable by the company for that period, in so far as it is referable to the income from the sale of those goods, shall be reduced by [1]>twenty-six thirty-sixths<[1][1]>twenty-two thirty-seconds<[1], and the corporation tax referable to the income from the sale of those goods shall be such an amount as bears to the relevant corporation tax the same proportion as the income from the sale of those goods bears to the total income brought into charge to corporation tax for the relevant accounting period.
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(b) Where a company which carries on a trade which consists of or includes the manufacture of goods claims and proves as respects a relevant accounting period (being an accounting period beginning before the 1st day of April, 1997, and ending on or after that date) that during that period any amount was receivable in respect of the sale in the course of the trade of goods, corporation tax payable by the company for that period, in so far as it is referable to the income from the sale of those goods, shall be reduced—
(i) by twenty-eight thirty-eighths, in so far as it is corporation tax charged on profits which under section 26(3) are apportioned to the period beginning on the 1st day of January, 1996, and ending on the 31st day of March, 1997, and
(ii) by twenty-six thirty-sixths, in so far as it is corporation tax charged on profits which under section 26(3) are apportioned to the period beginning on the 1st day of April, 1997, and ending on the 31st day of December, 1998,
and the corporation tax referable to the income from the sale of those goods—
(I) shall, for the purposes of subparagraph (i), be such an amount as bears to the part of the relevant corporation tax charged on profits which under section 26(3) are apportioned to the period beginning on the 1st day of January, 1996, and ending on the 31st day of March, 1997, the same proportion as the income from the sale of those goods bears to the total income brought into charge to corporation tax for the relevant accounting period, and
(II) shall, for the purposes of subparagraph (ii), be such an amount as bears to the part of the relevant corporation tax charged on profits which under section 26(3) are apportioned to the period beginning on the 1st day of April, 1997, and ending on the 31st day of December, 1998, the same proportion as the income from the sale of those goods bears to the total income brought into charge to corporation tax for the relevant accounting period.
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(b) Where a company which carries on a trade which consists of or includes the manufacture of goods claims and proves as respects a relevant accounting period (being an accounting period which falls wholly or partly into the period beginning on the 1st day of April, 1996, and ending on the 31st day of December, 1998) that during that accounting period any amount was receivable in respect of the sale in the course of the trade of goods, corporation tax payable by the company for that accounting period, in so far as it is referable to the income from the sale of those goods, shall be reduced—
(i) by twenty-eight thirty-eighths, in so far as it is corporation tax charged on profits which under section 26(3) are apportioned to the period beginning on the 1st day of January, 1996, and ending on the 31st day of March, 1997,
(ii) by twenty-six thirty-sixths, in so far as it is corporation tax charged on profits which under section 26(3) are apportioned to the period beginning on the 1st day of April, 1997, and ending on the 31st day of December, 1997, and
(iii) by twenty-two thirty-seconds, in so far as it is corporation tax charged on profits which under section 26(3) are apportioned to the financial year 1998,
and the corporation tax referable to the income from the sale of those goods—
(I) shall, for the purposes of subparagraph (i), be such an amount as bears to the part of the relevant corporation tax charged on profits which under section 26(3) are apportioned to the period beginning on the 1st day of January, 1996, and ending on the 31st day of March, 1997, the same proportion as the income from the sale of those goods bears to the total income brought into charge to corporation tax for the relevant accounting period, and
(II) shall, for the purposes of subparagraph (ii), be such an amount as bears to the part of the relevant corporation tax charged on profits which under section 26(3) are apportioned to the period beginning on the 1st day of April, 1997, and ending on the 31st day of December, 1997, the same proportion as the income from the sale of those goods bears to the total income brought into charge to corporation tax for the relevant accounting period, and
(III) shall, for the purposes of subparagraph (iii), be such an amount as bears to the part of the relevant corporation tax charged on profits which under section 26(3) are apportioned to the financial year 1998, the same proportion as the income from the sale of those goods bears to the total income brought into charge to corporation tax for the relevant accounting period.
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(2) Where a company which carries on a trade which consists of or includes the manufacture of goods claims and proves as respects a relevant accounting period that during that period any amount was receivable in respect of the sale in the course of the trade of goods, corporation tax payable by the company for that period, in so far as it is referable to the income from the sale of those goods, shall be reduced—
(a) by eleven-sixteenths, in so far as it is corporation tax charged on profits which under section 26(3) are apportioned to the financial year 1998,
(b) by nine-fourteenths, in so far as it is corporation tax charged on profits which under section 26(3) are apportioned to the financial year 1999,
(c) by seven-twelfths, in so far as it is corporation tax charged on profits which under section 26(3) are apportioned to the financial year 2000,
(d) by one-half, in so far as it is corporation tax charged on profits which under section 26(3) are apportioned to the financial year 2001,
(e) by three-eighths, in so far as it is corporation tax charged on profits which under section 26(3) are apportioned to the financial year 2002, and
(f) by one-fifth, in so far as it is corporation tax charged on profits which under section 26(3) are apportioned to the financial year 2003 or any subsequent financial year,
and the corporation tax referable to the income from the sale of those goods shall be such an amount as bears to the part of the relevant corporation tax charged on profits which under section 26(3) are apportioned to the financial year in question the same proportion as the income from the sale of those goods bears to the total income brought into charge to corporation tax for the relevant accounting period.
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(3) For the purposes of subsection (2), “the income from the sale of those goods” shall be taken to be such sum as bears to the amount of the company’s income for the relevant accounting period from the sale in the course of the trade mentioned in that subsection of goods and merchandise the same proportion as the amount receivable by the company in the relevant accounting period from the sale in the course of the trade of goods bears to the total amount receivable by the company in the relevant accounting period from the sale in the course of the trade of goods and merchandise.
(4) For the purposes of subsection (3), “the company’s income for the relevant accounting period from the sale in the course of the trade mentioned in that subsection of goods and merchandise” shall be—
(a) in any case where the income from the trade is derived solely from sales of goods and merchandise, the amount of the company’s income from the trade, and
(b) in any other case, such amount of the income from the trade as appears to the inspector or on appeal to the Appeal Commissioners to be just and reasonable.
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(3) For the purposes of subsection (2), the “income from the sale of those goods” shall be the amount determined by—
(a) firstly, calculating such sum (in this subsection referred to as the “relevant sum”) as bears to the amount of the company’s income for the relevant accounting period from the sale in the course of the trade mentioned in that subsection of goods and merchandise the same proportion as the amount receivable by the company in the relevant accounting period from the sale in the course of the trade of goods bears to the total amount receivable by the company in the relevant accounting period from the sale in the course of the trade of goods and merchandise, and
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(b) then, deducting from the relevant sum—
(i) the amount of any relief for charges allowed under section 454,
(ii) the amount of any relief for a loss in a trade allowed under section 455, and
(iii) the amount of any group relief allowed under section 456, against income of the trade in the relevant accounting period.
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(b) then, deducting from the relevant sum—
(i) the amount of any charges on income paid for the purposes of the sale of goods in the relevant accounting period,
(ii) the amount of any loss from the sale of goods incurred by the company in the relevant accounting period, and
(iii) the amount of any excess of charges on income paid for the purpose of the sale of goods or the amount of any loss from the sale of goods, incurred by a surrendering company and allowed under section 420A,
allowed against income of the trade in the relevant accounting period.
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(b) then deducting from the relevant sum any amounts allowed under sections 243A, 396A or 420A against the company’s income for the relevant accounting period from the sale of those goods.
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(b) then, deducting from the relevant sum—
(i) the amount of any charges on income paid for the purposes of the sale of goods in the relevant accounting period,
(ii) the amount of any loss from the sale of goods incurred by the company in the relevant accounting period, and
(iii) the amount of any excess of charges on income paid for the purpose of the sale of goods or the amount of any loss from the sale of goods, incurred by a surrendering company and allowed under section 420A,
allowed against income of the trade in the relevant accounting period.
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(4) For the purposes of subsection (3), the “company’s income for the relevant accounting period from the sale in the course of the trade mentioned in that subsection of goods and merchandise” shall be determined as an amount equal to—
(a) in any case where the income from the trade is derived solely from sales of goods and merchandise, the amount of the company’s income from the trade, and
(b) in any other case, such amount of the income from the trade as appears to the inspector or on appeal to the Appeal Commissioners to be just and reasonable,
but shall be so determined as if—
(i) no relief for charges had been claimed under section 243A [12]>or 454<[12],
(ii) no relief for a loss in a trade had been claimed under section 396A [13]>or 455<[13], and
(iii) no group relief had been allowed under section 420A [14]>or 456<[14],
for the relevant accounting period.
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(5) (a) For the purposes of this Part, the amount receivable by a company in a relevant accounting period from the sale of goods or merchandise—
(i) shall be deemed to be reduced by the amount of any duty paid or payable by the company in respect of the goods or merchandise or in respect of the materials used in their manufacture, and
(ii) shall not include any amount in respect of value-added tax chargeable on the sale of the goods or merchandise.
(b) The inspector may by notice in writing require a company making a claim for relief under this Part to furnish him or her with such information or particulars as may be necessary for the purposes of giving effect to this subsection, and subsection (2) shall apply as if the matters of which proof is required by that subsection included the information or particulars specified in a notice under this subsection.
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(5A) Where any part of the profits of an accounting period of a company is charged to corporation tax in accordance with section 21A, then—
(a) for the purposes of this section, the relevant corporation tax in relation to the accounting period shall be reduced by an amount determined by the formula—
R |
× |
S |
|
100 |
where—
R is the rate per cent specified in section 21A(3) in relation to the accounting period, and
S is an amount equal to so much of the profits of the company for the accounting period as are charged to tax in accordance with section 21A,
and
(b) notwithstanding section 4(4)(b), the income of a company, referred to in the expression “total income brought into charge to corporation tax”, for the accounting period for the purposes of subsection (2) shall be the sum determined by section 4(4)(b) for that period reduced—
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(i) in accordance with sections 454 and 455, and
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(i) by any amounts allowed under sections 243A, 396A, 420A, 454, 455 and 456, and
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(ii) by an amount equal to so much of the profits of the company for the accounting period as are charged to tax in accordance with section 21A.
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(5A) Where any part of the profits of an accounting period of a company is charged to corporation tax in accordance with section 21A, then for the purposes of this section, the relevant corporation tax shall be reduced by an amount determined by the formula—
R |
× |
S |
|
100 |
where—
R is the rate per cent specified in section 21A(3) in relation to the accounting period, and
S is an amount equal to so much of the profits of the company for the accounting period as are charged to tax in accordance with section 21A.
(5B) Notwithstanding section 4(4)(b), the income of a company, referred to in the expression “total income brought into charge to corporation tax”, for the accounting period for the purposes of subsection (2) shall be the sum determined by section 4(4)(b) for that period reduced—
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(a) by any amounts allowed under sections 243A, 396A or 420A, and
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(a) by any amounts in respect of—
(i) any charges on income paid for the purposes of the sale of goods in the relevant accounting period,
(ii) any loss from the sale of goods incurred by the company in the relevant accounting period, and
(iii) any excess of charges on income paid for the purpose of the sale of goods or the amount of any loss from the sale of goods, incurred by a surrendering company and allowed under section 420A,
allowed against income of the trade in the relevant accounting period, and
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(b) by an amount equal to so much of the profits of the company for the accounting period as are charged to tax in accordance with section 21A.
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(6) A company shall not be entitled to relief under this Part in relation to a trade as respects a relevant accounting period unless it makes a claim for the relief under subsection (2) before the date on which the assessment for the accounting period which coincides with or includes that relevant accounting period becomes final and conclusive.
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(7) (a) In this subsection—
“the airport” and “the Area” have the same meanings respectively as in sections 445 and 446;
“the Minister” means the Minister for Finance;
“qualified company” includes, subject to paragraph (i), a company which has not carried on trading operations in the Area or the airport and which intends to carry on trading operations which will be relevant trading operations;
“relevant subsection” means subsection (2) of section 445 or subsection (2) of section 446, as the case may be;
“relevant taxation”, in relation to an investor or a qualified company, means any tax imposed under the laws of any state by reason of the relief.
(b) Notwithstanding any other provision of this section but subject to paragraph (c), where the Minister is satisfied that the conditions specified in paragraph (d) are met, the Minister may by notice in writing given to a qualified company reduce the fraction (in this subsection referred to as “the relief”) by which corporation tax payable, in so far as it is referable to income from relevant trading operations, is to be, or but for this subsection would be, reduced under subsection (2) by specifying in the notice such lower fraction (in this subsection referred to as “the revised relief”) as the Minister deems appropriate by which that corporation tax is to be reduced.
(c) The reduction of the relief so as to determine the revised relief shall be no greater than is necessary to secure the result specified in paragraph (d)(iv).
(d) The conditions referred to in paragraph (b) are that—
(i) some or all of the shares in the qualified company are owned directly or indirectly (within the meaning of section 9) by a company or companies (in this subsection referred to as “the investors”) resident outside the State, or the qualified company is resident outside the State and is trading in the State through a branch or agency,
(ii) the qualified company (in this subparagraph referred to as the “first-mentioned qualified company”) is carrying on, or is about to carry on, a trade in the State which includes or consists of relevant trading operations and with levels of activity and employment in the State in relation to those operations either in the first-mentioned qualified company, or in another qualified company with which the first-mentioned qualified company has entered into an agreement in order to carry on such operations, which, having regard to the certificate issued or to be issued to the first-mentioned qualified company or the other qualified company, as the case may be, under the relevant subsection, are substantial and contribute, or will contribute, to the development of the Area as an International Financial Services Centre, or to the development of the airport, as the case may be,
(iii) the manner in which the investors or the qualified company, as the case may be, would but for this subsection be subject to relevant taxation in respect of income from relevant trading operations would result in the qualified company ceasing to carry on relevant trading operations carried on by it, or not carrying on relevant trading operations, as the case may be, in the State, and
(iv) the revised relief would ensure that all or a substantial part of the relevant trading operations of the qualified company will continue to be carried on, or will be carried on, as the case may be, in the State to an extent that they will continue to contribute, or will contribute, to the development of the Area as an International Financial Services Centre, or to the development of the airport, as the case may be.
(e) Where the Minister has given a notice pursuant to paragraph (b), subsection (2) shall apply as if the revised relief were substituted for the relief.
(f) Notwithstanding any other provision of this section, the Minister may, subject to paragraph (c), by notice given in writing to the qualified company—
(i) increase or decrease the revised relief specified in a preceding notice given to the qualified company under this subsection, or
(ii) reinstate the relief,
and, where the Minister has given such notice, paragraph (e) shall apply as if the revised relief specified in the notice given under paragraph (b) were the revised relief specified under this paragraph or the relief shall be reinstated, as the case may be.
(g) A notice given by the Minister under this subsection specifying a revised relief or an increase or decrease in such revised relief or a reinstatement of the relief shall have effect from the date specified in the notice which may be a date preceding the date on which the notice is given.
(h) Subject to paragraph (i), this subsection shall be construed together with sections 445 and 446.
(i) In so far as this subsection is to be construed together with section 445, it shall be so construed only in so far as the relevant trading operations carried on by a qualified company within the meaning of that section are trading operations which could be certified by the Minister as relevant trading operations for the purposes of section 446 if they were carried on in the Area rather than the airport.
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[1]
Substituted by FA98 sched6(3)(a). Applies as respects any accounting period beginning on or after the 1st day of January, 1998
[5]
Substituted by FA00 s83(1)(d)(i). Shall apply as respects accounting periods ending on or after 1 January 2000.
[6]
Deleted by FA00 s83(1)(d)(ii). Shall apply as respects accounting periods beginning after 1 April 2000.
[7]
Substituted by FA01 s90(1)(c)(i)(I). Applies as respects an accounting period ending on or after 6 March 2001.
[8]
Substituted by FA01 s90(1)(c)(i)(II). Applies as respects an accounting period ending on or after 6 March 2001.
[9]
Deleted by FA03 s41(1)(h). This section applies as respects accounting periods ending on or after 6 February 2003.
[10]
Substituted by FA05 s53(1)(a). This section applies as respects accounting periods ending on or after 3 February 2005.
[11]
Substituted by FA05 s53(1)(b). This section applies as respects accounting periods ending on or after 3 February 2005.
[12]
Deleted by FA05 s53(1)(c)(i). This section applies as respects accounting periods ending on or after 3 February 2005.
[13]
Deleted by FA05 s53(1)(c)(ii). This section applies as respects accounting periods ending on or after 3 February 2005.
[14]
Deleted by FA05 s53(1)(c)(iii). This section applies as respects accounting periods ending on or after 3 February 2005.
[15]
Deleted by FA05 s53(1)(d). This section applies as respects accounting periods ending on or after 3 February 2005.
[16]
Substituted by FA08 s53(1)(a). Has effect for accounting periods ending on or after 18 February 2008.
[17]
Substituted by FA08 s53(1)(b). Shall be deemed to have had effect for accounting periods ending on or after 31 January 2007.
[18]
Substituted by F(No.2)A08 s32(1)(a). This section has effect for accounting periods ending on or after 20 November 2008.
[19]
Substituted by F(No.2)A08 s32(1)(b). This section has effect for accounting periods ending on or after 20 November 2008.