985A Application of section 985 to certain perquisites, etc.

(1) ^[2]>This section applies^<[2][2]>Subject to subsection (1A), this section applies^<[2] to emoluments in the form of—

(a) perquisites and profits whatever which are chargeable to tax under section 112 ^[3]>excluding perquisites or profits whatever in the form of shares (including stock) in a company, but^<[3] including—

(i) an expense incurred by a body corporate in the provision of a benefit, other than a contribution to a PRSA (within the meaning of Chapter 2A of Part 30), for an employee which is treated as a perquisite for the purposes of section 112 by virtue of section 118,

(ii) the benefit arising from a preferential loan which is treated as a perquisite for the purposes of section 112 by virtue of section 122, and

(iii) a perquisite to which ^[11]>section 112A^<[11][11]>section 112A or 112AA^<[11] applies,

(b) the benefit of the private use of a car which is chargeable to tax by virtue of section 121, and

(c) the benefit of the private use of a van which is chargeable to tax by virtue of section 121A.

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(1A) ^[8]>Subsection (1)^<[8][8]>Subject to subsection (1B), subsection (1)^<[8] shall not apply to emoluments in the form of perquisites or profits whatever received by an employee in the form of shares (including stock) being shares or stock in—

(a) the company in which the employee holds his or her office or employment, or

(b) a company which has control (within the meaning of section 432) of that company.

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(1B) Subsection (1A) shall not apply to shares or stock referred to in that subsection received on or after 1 January 2011.

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(2) Where an employee is in receipt of any emolument to which this section applies, the employer shall be treated for the purposes of this Chapter and regulations under this Chapter as making a payment (in this section referred to as a “notional payment”) of an amount equal to the amount referred to in subsection (3).

(3) The amount referred to in this subsection, is the amount which, on the basis of the best estimate that can reasonably be made, is the amount of income likely to be chargeable to tax under Schedule E in respect of the emolument.

(4) Where, by reason of an insufficiency of payments actually made to or on behalf of an employee, the employer is unable to deduct the amount (or full amount) of the income tax required to be deducted by virtue of this Chapter and regulations made under this Chapter, the employer shall be liable to remit to the ^[7]>Revenue Commissioners^<[7][7]>Collector-General^<[7] at such time as may be prescribed by regulation an amount of income tax equal to the amount of income tax that the employer would be required, but is unable, to deduct.

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(4A) Any amount of tax which an employer remits in accordance with subsection (4) and any regulations made under that subsection in respect of a notional payment shall be treated as an amount of tax which, at the time the notional payment is made, is deducted in respect of the employee’s liability to income tax.

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(4B) Where—

(a) an employer pays emoluments to an employee in the form of shares (including stock),

(b) subsection (4) applies, and

(c) the employee has not made good to the employer the amount of the income tax required to be deducted under this Part and regulations made under this Part in respect of those shares,

then—

(i) the employer shall be entitled to withhold and to realise sufficient shares to meet that income tax liability,

(ii) the employee shall allow such withholding as is referred to in paragraph (i), and

(iii) the employer shall be acquitted and discharged of such withholding as if the amount of income tax required to be deducted had been paid to the employee.

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(5) In any case where—

(a) an employee is in receipt of an emolument to which this section applies,

(b) the employer is required by virtue of this section and regulations made there-under to remit an amount of income tax (in this subsection referred to as the “due amount”) in respect of that emolument, and

(c) the employee does not, before the end of the year of assessment, make good the due amount to the employer,

the employee shall be chargeable to tax under Schedule E in respect of the due amount for the next following year of assessment and the due amount shall be treated for that year as an emolument to which this section applies.

(6) The Revenue Commissioners may make regulations to make provision—

(a) with respect to the deduction, collection and recovery of amounts to be accounted for in respect of notional payments;

(b) applying (with or without modifications) any specified provisions of regulations for the time being in force in relation to deductions from actual payments to amounts to be accounted for in respect of any notional payments.

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(7) Every regulation made under this section shall be laid before Dáil Éireann as soon as may be after it is made and, if a resolution annulling the regulation is passed by Dáil Éireann within the next 21 days on which Dáil Éireann has sat after the regulation is laid before it, the regulation shall be annulled accordingly, but without prejudice to the validity of anything previously done thereunder.

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