The Interpretation Act of 1937 has been key to the application of many provisions in our tax legislation. It has now been replaced with a new act, signed into law by President McAleese on 17 October last. This new Act is of fundamental importance to the practice of tax.

The Interpretation Act 2005 (No. 23 of 2005) repeals the 1937 Act in its entirety, and comes into operation on 1 January 2006. Although many of its provisions are of a technical nature, or restate the provisions of the 1937 Act, practitioners should be particularly aware of the following important changes:

Under Section 4, if a provision of the Interpretation Act appears to contradict a provision of another Act under examination, then that provision of the Interpretation Act will not apply.

Section 5 of the Act provides that where any provision is either:

• obscure or ambiguous, or
• where a literal interpretation would be absurd or fail to reflect the plain intention of the Oireachtas,

the provision is to be interpreted to reflect the intention of the Oireachtas, where that intention can be ascertained from the enactment as a whole

This does not apply in the case of legislation which imposes “a penal or other sanction”. The new approach is known as a “purposive” approach.

Section 6 allows for the interpretation of legislation in changing circumstances-changes in the law, social conditions, technology, the meaning of words, etc. insofar as its text, purpose and content permit.

Section 7 allows the courts, in situations covered by Sections 5 and 6, to look at any notes in the text of any act in the version as signed by the President. This will bring in for consideration, for example, the description of sections in the margins of printed legislation.

Section 11 allows future legislation to contain examples, if identified as such, which may extend rather than limit the meaning of a provision.

Section 18 allows for references to a “person” in relation to an offence to also mean a reference to a company.

The Explanatory Memorandum to the Bill as passed by the Oireachtas notes that “it is not anticipated that any financial implications will arise from this Bill”. We shall see.