PART 24A

Shipping: Tonnage Tax

697A Interpretation (Part 24A).

(1) In this Part and in Schedule 18B—

“bareboat charter terms”, in relation to the charter of a ship, means the letting on charter of a ship for a stipulated period on terms which give the charterer possession and control of the ship, including the right to appoint the master and crew;

“chartered in” means—

(a) in relation to a single company, the letting on charter of a ship to the company otherwise than on bareboat charter terms, and

(b) in relation to a group of companies, the letting on charter of a ship otherwise than on bareboat charter terms to a qualifying company that is a member of the group by a person who is not a qualifying company that is a member of the group;

“company election” and “group election” have the meanings respectively assigned to them by section 697D(1);

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“commencement date” means the day appointed by the Minister for Finance by order as the day section 53 of the Finance Act, 2002, comes into operation;

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“commencement date” means the date of the passing of the Finance Act 2003;

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“control” shall be construed in accordance with subsections (2) to (6) of section 432;

“initial period” has the meaning assigned to it by paragraph 2 of Schedule 18B;

“group of companies” means—

(a) all the companies of which an individual has control, or

(b) where a company that is not controlled by another person controls one or more other companies, that company and all the companies of which that company has control,

and references to membership of a group and group shall be construed accordingly;

“Member State” means a Member State of the European Communities;

“qualifying company” means a company—

(a) within the charge to corporation tax,

(b) that operates qualifying ships, and

(c) which carries on the strategic and commercial management of those ships in the State;

“qualifying group” means a group of companies of which one or more members are qualifying companies;

“qualifying ship” means, subject to subsection (2), a self-propelled seagoing vessel (including a hovercraft) of 100 tons or more gross tonnage which is certificated for navigation at sea by the competent authority of any country or territory, but does not include a vessel (in this Part and in Schedule 18B referred to as a “vessel of an excluded kind”) which is—

(a) a fishing vessel or a vessel used for subjecting fish to a manufacturing or other process on board the vessel,

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(b) a vessel of a kind whose primary use is for the purposes of sport or recreation,

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(b) a vessel, other than a vessel operated for bona fide commercial purposes and with an overnight passenger capacity (not including crew) of not less than 50 persons, of a kind whose primary use is for the purposes of sport or recreation,

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(c) a harbour, estuary or river ferry,

(d) an offshore installation, including a mobile or fixed rig, a platform or other installation of any kind at sea,

(e) a tanker used for petroleum extraction activities (within the meaning of Chapter 2 of Part 24),

(f) a dredger, including a vessel used primarily as a floating platform for working machinery or as a diving platform,

(g) a tug in respect of which a certificate has not been given by the Minister for the Marine and Natural Resources certifying that in the opinion of the Minister the tug is capable of operating in seas outside the portion of the seas which are, for the purposes of the Maritime Jurisdiction Act, 1959, the territorial seas of the State;

“tonnage tax” has the meaning assigned to it in section 697B;

“tonnage tax activities”, in relation to a tonnage tax company, means activities carried on by the company in the course of a trade which consists of one or more than one of the activities described in ^[10]>paragraphs (a) to (j) and paragraph (m)^<[10][10]>paragraphs (a) to (g) and paragraphs (i) and (j)^<[10] of the definition of “relevant shipping income”;

“tonnage tax asset” means an asset used wholly and exclusively for the purposes of the tonnage tax activities of a tonnage tax company;

“tonnage tax company” and “tonnage tax group” mean, respectively, a company or group in relation to which a tonnage tax election has effect;

“tonnage tax election” has the meaning assigned to it in section 697D(1);

“tonnage tax profits”, in relation to a tonnage tax company, means the company’s profits for an accounting period calculated in accordance with section 697C;

“tonnage tax trade”, in relation to a tonnage tax company, means a trade carried on by the company the income from which is within the charge to corporation tax and which consists solely of the carrying on of tonnage tax activities or, in the case of a trade consisting partly of the carrying on of such activities and partly of other activities, that part of the trade consisting solely of the carrying on of tonnage tax activities and which is treated under section 697L as a separate trade carried on by the company;

“relevant shipping income”, in relation to a tonnage tax company, means the company’s income from—

(a) the carriage of passengers by sea in a qualifying ship operated by the company^[3]>, including income in respect of which the conditions set out in section 697I are met^<[3],

(b) the carriage of cargo by sea in a qualifying ship operated by the company^[4]>, including income in respect of which the conditions set out in section 697I are met^<[4],

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(c) towage, salvage or other marine assistance by a qualifying ship operated by the company,

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(c) towage, salvage or other marine assistance by a qualifying ship operated by the company, but does not include income from any such work undertaken in a port or an area under the jurisdiction of a port authority,

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(d) transport in connection with other services of a kind necessarily provided at sea by a qualifying ship operated by the company,

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(e) the provision on board a qualifying ship operated by the company of services ancillary to the carriage of passengers or cargo,

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(e) the provision on board a qualifying ship operated by the company of goods or services ancillary to the carriage of passengers or cargo, but only to the extent that such goods or services are provided for consumption on board the qualifying ship,

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(f) the granting of rights by virtue of which another person provides or will provide such ancillary services on board a qualifying ship operated by the company,

(g) other ship-related activities that are a necessary and integral part of the business of operating the company’s qualifying ships,

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(h) the provision at sea of marine research facilities on board a qualifying ship operated by the company,

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(i) the letting on charter of a qualifying ship for use for the carriage by sea of passengers and cargo where the operation of the ship and the crew of the ship remain under the direction and control of the company,

(j) the provision of ship management services for qualifying ships operated by the company,

(k) a dividend or other distribution of a company not resident in the State (in this Part referred to as the “overseas company”) in respect of which the conditions set out in section 697H(1) are met,

(l) gains treated as income by virtue of section 697J,

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(m) activities which are incidental to the activities described in paragraphs (a) to (j) (in this paragraph referred to as the “core activities”) where the turnover in an accounting period of the company from all such incidental activities does not exceed 0.25 per cent of the company’s turnover from its core activities,

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“relevant shipping profits”, in relation to a tonnage tax company, means—

(a) the company’s relevant shipping income, and

(b) so much of the company’s chargeable gains as are excluded from the charge to tax by section 697N;

“renewal election” has the meaning assigned to it in paragraph 6 of Schedule 18B;

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“75 per cent limit” has the meaning assigned to it by section 697E.

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(2) A vessel is not a qualifying ship for the purposes of this Part if the main purpose for which it is used is the provision of goods or services of a kind normally provided on land.

(3) (a) References in this Part and in Schedule 18B to a company or group entering or leaving tonnage tax are references to its becoming or ceasing to be a tonnage tax company or group.

(b) References in this Part and in Schedule 18B to a company or group of companies being subject to tonnage tax are references to the company or group being entitled to calculate its profits in accordance with the provisions of this Part and that Schedule.

(4) Schedule 18B shall apply for the purposes of this Part.