Finance (Miscellaneous Provisions) Act , 1956

PART I. Preliminary and General.

1 Short title and construction.

1.—(1) This Act may be cited as the Finance (Miscellaneous Provisions) Act, 1956.

(2) This Act shall, so far as it relates to income tax (including sur-tax), be read and construed together with the Income Tax Acts and shall, so far as it relates to corporation profits tax, be read and construed together with Part V of the Finance Act, 1920, as amended or extended by subsequent enactments.

2 Appeals.

2.—An appeal to the Special Commissioners shall lie on any question arising under Part II, Part III or Part IV of this Act (including any opinion of the Revenue Commissioners under section 4 of this Act) in like manner as an appeal would lie against an assessment to income tax, and the provisions of the Income Tax Acts relating to appeals shall apply and have effect accordingly.

3 Amendment of Rule 6 of Rules applicable to Cases I and II of Schedule D of Income Tax Act, 1918.

3.—Paragraph (1) of Rule 6 of the Rules applicable to Cases I and II of Schedule D of the Income Tax Act, 1918, is hereby amended by the addition of the following proviso :

“Provided that where a person is carrying on a trade which consists of or includes the working of a mine or quarry or the smelting of ore, the deduction to be allowed under this paragraph in respect of machinery or plant belonging to him and used in connection with the working of the mine or quarry or the smelting of the ore shall, if the person so elects, be such sum as is considered just and reasonable having regard to the period at the expiration of which the mine or quarry is likely to cease to be worked or the smelting of ore is likely to be discontinued and the probable value of the machinery or plant at the expiration of that period to the person carrying on the trade.”

PART II. Profits from Coal-mining Operations—Temporary Relief from Income Tax and Corporation Profits Tax.

4 Definitions (Part II).

4.—In this Part of this Act—

“coal-mining operations” means coal-mining operations (by underground or opencast excavation) within the State, whether before or after the passing of this Act, but only in so far as the production of coal results or has resulted therefrom;

“commencement day” means such day after the 30th day of September, 1956, as is referred to in paragraph (b) of the definition in this section of “new coal-mining operations”;

“existing coal-mining operations” means coal-mining operations which, at any time during the period of one year ending on the 30th day of September, 1956, have resulted in the production of coal ;

“new coal-mining operations” means coal-mining operations which—

(a) are not existing coal-mining operations,

(b) are begun on a day after the 30th day of September, 1956, and

(c) are, in the opinion of the Revenue Commissioners, having regard to all the circumstances (which may include the nature and magnitude of the operations and the place where they are carried on), substantially distinct and separate from, and not merely an extension of, any other coal-mining operations;

“production” means production in reasonable commercial quantities with a view to the realisation of profits.

5 General restriction on relief.

5.—Relief under this Part of this Act shall be given in respect only of income or profits of a company, incorporated in the State and resident therein for the purposes of income tax, derived from new coal-mining operations or existing coal-mining operations.

6 Computation of profits from new coal-mining operations for income tax purposes.

6.—In computing, for the purpose of assessment to income tax, the amount of the profits from any new coal-mining operations—

(a) the new coal-mining operations shall be treated as a separate trade, and

(b) any corporation profits tax which, by virtue of section 7 of this Act is not payable, shall be deemed to have been paid.

7 Relief—new coal-mining operations.

7.—(1) Income tax payable in respect of income, computed in accordance with the Income Tax Acts, from new coal-mining operations shall, as respects the year of assessment in which the commencement day occurs and succeeding years of assessment, be reduced by fifty per cent., subject to the proviso that income tax so payable shall not be so reduced for any year of assessment beginning on or after the 6th day of April, 1967.

(2) (a) Corporation profits tax referable to profits from new coal-mining operations for accounting periods or parts of accounting periods within the period from the commencement day to the 30th day of September, 1966, shall be reduced by fifty per cent.

(b) The Revenue Commissioners may make such apportionments as they consider necessary for the purposes of this subsection.

8 Relief—existing coal-mining operations.

8.—(1) For each relevant year of assessment, income tax payable in respect of income, computed in accordance with the Income Tax Acts, from existing coal-mining operations, in so far as such income is referable to the income tax excess, shall be reduced by fifty per cent.

(2) (a) For each of the accounting periods or parts of accounting periods within the period from the 1st day of October, 1956, to the 30th day of September, 1966, corporation profits tax chargeable in respect of profits from existing coal-mining operations, in so far as such profits are referable to the corporation profits tax excess, shall be reduced by fifty per cent.

(b) The Revenue Commissioners may make such apportionments as they consider necessary for the purposes of this subsection.

(c) In computing, for the purpose of assessment to income tax, the amount of the profits from existing coal-mining operations, any corporation profits tax which, by virtue of this subsection is not payable, shall be deemed to have been paid.

(3) (a) In this section—

“basis period” means the period on the profits or gains of which income tax in respect of the existing coal-mining operations is finally computed under Case I of Schedule D for the relevant year of assessment;

“corporation profits tax excess” means the excess of the volume of output of coal resulting from the existing coal-mining operations for an accounting period or part of an accounting period to which paragraph (a) of subsection (2) of this section refers over the standard output of coal;

“income tax excess” means the excess of the volume of output of coal resulting from the existing coal-mining operations in the basis period for a relevant year of assessment over the standard output of coal;

“relevant year of assessment” means each of the ten consecutive years of assessment of which the first is such one of the three years of assessment commencing on the 6th day of April, 1957, the 6th day of April, 1958, and the 6th day of April, 1959, respectively, as the company in question elects or, in default of election, the year commencing on the 6th day of April, 1959, subject to the proviso that, in any case in which the standard output of coal is the volume of output of coal in the twelve months ending on the 30th day of September, 1956, the year of assessment commencing on the 6th day of April, 1957, shall not be a relevant year of assessment if the basis period in relation thereto commences on a day prior to the 1st day of October, 1955;

“standard output of coal” means the volume of output of coal from the existing coal-mining operations in the twelve months ending on the 30th day of September, 1956, or, if the company in question so elects, in the twelve months ending on the 30th day of September, 1955.

(b) Where, for the purpose of ascertaining the income tax excess or the corporation profits tax excess, it is necessary to compare, with the standard output of coal, the volume of output of coal in a period of less than twelve months, the standard output of coal shall, for the purpose of the comparison, be deemed to be such part thereof as bears to the whole the same proportion as that period bears to twelve months.

9 Dividends, etc.

9.—(1) Where, under Rule 20 of the General Rules, a company is entitled to deduct income tax from any dividend, tax shall not in any case be deducted at a rate exceeding the rate of the income tax as reduced by any relief from that tax given under this Part of this Act, and the provisions of section 5 of the Finance Act, 1940 (No. 14 of 1940), shall apply accordingly, with any necessary modifications.

(2) The rate of income tax at which any repayment of income tax for any year of assessment falls to be made shall be subject to such adjustments as may be proper in cases in which relief is given under or by virtue of this Part of this Act.

(3) No relief from income tax shall be granted under this Part of this Act in respect of any income the income tax on which a company is, otherwise than under Rule 20 of the General Rules, entitled to charge against any other person or to deduct, retain or satisfy out of any payment to any other person.

(4) Where, by virtue of subsection (1) of this section, income tax is deducted from a dividend at a reduced rate, the amount to be included in respect of the dividend in any return for the purpose of sur-tax shall be an amount which bears the same proportion to the amount of the dividend as the rate of income tax deducted therefrom bears to the rate which would have been authorised to be deducted if this section had not been enacted.

PART III. Profits from Exports—Temporary Relief from Income Tax and Corporation Profits Tax.

10 Definitions (Part III).

10.—In this Part of this Act—

“accounting period” means an accounting period or part of an accounting period of a company within the period from the 1st day of October, 1956, to the 30th day of September, 1961;

“basis period” means the period on the profits or gains of which income tax in respect of a company's trade is finally computed under Case I of Schedule D for the year of claim;

“company” means (save for the purposes of the proviso to the definition in this section of “goods”) a body corporate which in the course of its trade exports goods out of the State;

“goods” means goods manufactured within the State by the person who exports them or some of them and who in relation to the relevant basis period or the relevant accounting period is the company claiming relief under this Part of this Act, subject, however, to the proviso that, where there are two companies one of which manufactures goods and the other of which exports them and where one of the companies holds more than ninety per cent. of the ordinary shares in the other company or where persons who have a controlling interest in one company hold, either directly or indirectly, more than ninety per cent. of the ordinary shares in the other company, the goods manufactured by one of the companies shall, when exported by the other company, be deemed to be manufactured by that other company;

“year of claim” means each of five consecutive years of assessment of which the first is such one of the three years of assessment commencing on the 6th day of April, 1957, the 6th day of April, 1958, and the 6th day of April, 1959, respectively, as the company in question elects or, in default of election, the year commencing on the 6th day of April, 1959, subject to the proviso that, in any case in which the standard period is the period of one year ending on the 30th day of September, 1956, the year of assessment commencing on the 6th day of April, 1957, shall not be a year of claim if the basis period in relation thereto commenced on a day prior to the 1st day of October, 1955.

11 The standard period.

11.—The standard period in relation to a company's trade shall, for the purposes of this Part of this Act, be the period of one year ending on the 30th day of September, 1956, or, if the company so elects, the period of one year ending on the 30th day of September, 1955, and that standard period shall be applicable in relation to the trade whether or not, during the whole or part of that standard period, the trade was carried on by a person other than the company by which it is carried on in the year of claim or the accounting period (as the case may be) or separate parts of the trade were carried on by different persons, but that standard period shall not be applicable where the trade was not in existence before the end of that standard period.

12 Basis of relief from income tax.

12.—(1) Where a company claims and proves as respects any year of claim—

(a) that, during the standard period in relation to the trade, goods were, in the course of the trade, exported out of the State,

(b) that, during the basis period, goods were, in the course of the trade, exported out of the State, and

(c) that the total amount receivable from the sale of the last-mentioned goods was in excess of the total amount receivable from the sale of the goods exported during the standard period,

income tax payable by the company for the year of claim, so far as it is referable to the profit attributable to the said excess, shall be reduced by fifty per cent.

(2) For the purposes of subsection (1) of this section “the profit attributable to the said excess” shall be taken to be such sum as bears to the amount of the company's profits for the year of claim, computed in accordance with the Income Tax Acts, which is attributable to the sale of goods (whether exported or not), the same proportion as the amount of the said excess bears to the total amount receivable by the company from such sale in the basis period.

(3) Where a company claims and proves as respects any year of claim—

(a) that, during the standard period in relation to the trade, no goods were, in the course of the trade, exported out of the State or that the standard period is not applicable, and

(b) that, during the basis period, goods were, in the course of the trade, exported out of the State,

income tax payable by the company for the year of claim, so far as it is referable to the profit on the sale of the goods so exported shall be reduced by fifty per cent.

(4) For the purposes of subsection (3) of this section “the profit on the sale of the goods so exported” shall be taken to be such sum as bears to the amount of the company's profits for the year of claim, computed in accordance with the Income Tax Acts, which is attributable to the sale of goods (whether exported or not), the same proportion as the amount receivable in the basis period from the sale of goods exported bears to the total amount receivable by the company from the sale of goods (whether exported or not) in the basis period.

13 Basis of relief from corporation profits tax.

13.—(1) Where a company claims and proves as respects an accounting period—

(a) that, during the standard period in relation to the trade, goods were, in the course of the trade, exported out of the State,

(b) that, during the accounting period, goods were, in the course of the trade, exported out of the State, and

(c) that the total amount receivable from the sale of the last-mentioned goods was in excess of the total amount (in this section referred to as the standard amount) receivable from the sale of the goods exported during the standard period,

corporation profits tax payable by the company for the accounting period, so far as it is referable to the profit attributable to the said excess, shall be reduced by fifty per cent.

(2) For the purposes of subsection (1) of this section “the profit attributable to the said excess” shall be taken to be such sum as bears to the amount of the company's profits for the accounting period, computed for the purposes of corporation profits tax, which is attributable to the sale of goods (whether exported or not), the same proportion as the amount of the said excess bears to the total amount receivable by the company from such sale in the accounting period.

(3) Where a company claims and proves as respects an accounting period—

(a) that, during the standard period in relation to the trade, no goods were, in the course of the trade, exported out of the State or that the standard period is not applicable, and

(b) that, during the accounting period, goods were, in the course of the trade, exported out of the State,

corporation profits tax payable by the company for the accounting period, so far as it is referable to the profit on the sale of the goods so exported, shall be reduced by fifty per cent.

(4) For the purposes of subsection (3) of this section “the profit on the sale of the goods so exported” shall be taken to be such sum as bears to the amount of the company's profits for the accounting period, computed for the purposes of corporation profits tax, which is attributable to the sale of goods (whether exported or not), the same proportion as the amount receivable in the accounting period from the sale of goods exported bears to the total amount receivable by the company from the sale of goods (whether exported or not) in the accounting period.

(5) The Revenue Commissioners may make such apportionments as they consider necessary for the purposes of subsections (1) and (3) of this section.

(6) Where, for the purposes of subsection (1) of this section, it is necessary to compare, with the standard amount, the total amount receivable from the sale of goods exported during an accounting period of less than twelve months, the standard amount shall, for the purpose of the comparison, be deemed to be such part thereof as bears to the whole the same proportion as the accounting period bears to twelve months.

(7) Where, on or after the day on which the standard period commenced, any change takes place whereby a part of a trade becomes transferred to any person, the standard amount shall, as respects any accounting period in which, or prior to which, the change occurs, be apportioned for the purposes of subsection (1) of this section, and every such apportionment shall be made in such manner as the Revenue Commissioners consider just, having regard to all the circumstances.

(8) In computing, for the purpose of assessment to income tax, the amount of the profits or gains from a company's trade, any corporation profits tax which, by virtue of this section, is not payable shall be deemed to have been paid.

14 Changes of proprietorship, etc.

14.—(1) For the purposes of subsection (1) of section 12 of this Act, where, in a year of claim, there is a succession to a trade, the total amount receivable from the sale of the goods exported during the standard period shall be apportioned between the predecessor and the successor in proportion to the lengths of the respective periods in the year of claim during which they carried on the trade.