FINANCE (PROFITS OF CERTAIN MINES) (TEMPORARY RELIEF FROM TAXATION) ACT, 1956

AN ACT TO PROVIDE, IN RELATION TO PROFITS OF CERTAIN MINES, FOR TEMPORARY RELIEF FROM TAXATION. [21st March, 1956.]

BE IT ENACTED BY THE OIREACHTAS AS FOLLOWS:—

1 Definitions.

1.—(1) In this Act—

“existing mining operations” means mining operations which, at any time during the period of one year ending on the 5th day of April, 1956, have resulted in the production of scheduled minerals;

“mining operations” means mining operations (by underground or open-cast excavation) within the State, whether before or after the passing of this Act, but only in so far as scheduled minerals have been or are obtained thereby;

“new mining operations” means mining operations which—

• (a) are not existing mining operations, and

• (b) 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 mining operations;

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

“qualifying mine” means a mine in so far only as new mining operations are carried on therein;

“scheduled minerals” means minerals specified in the Schedule to this Act occurring in non-bedded deposits of such minerals.

• (2) As respects any opinion of the Revenue Commissioners under subsection (1) of this section, an appeal to the Special Commissioners shall lie 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) The Minister for Finance may by order add minerals occurring in non-bedded deposits of such minerals to the Schedule to this Act.

• (4) Every order made under subsection (3) of this section shall be laid before Dáil Éireann as soon as may be after it is made and if a resolution annulling the order is passed by Dáil Éireann within the next twenty-one days on which Dáil Éireann has sat after the order is laid before it, the order shall be annulled accordingly.

2 Application of this Act.

2.—This Act applies to the profits (hereinafter in this Act referred to as the profits) of a company (hereinafter in this Act referred to as the company), incorporated in the State and resident therein for the purposes of income tax, derived from the working of a qualifying mine (hereinafter in this Act referred to as the mine) in relation to which the company commences to trade on a day (hereinafter in this Act referred to as the commencement day) within the period of five years beginning on the 6th day of April, 1956.

3 Computation of profits for purpose of assessment to income tax.

3.—In computing the amount of the profits for the purpose of assessment to income tax—

• (a) the working of the mine shall be treated as a separate trade set up or commenced on the commencement day, and

• (b) any corporation profits tax which, by virtue of section 6 of this Act, is not payable, shall be deemed to have been paid.

4 Computation of net income tax.

4.—(1) Subject to subsection (2) of this section, a reference in this Act to the net income tax for any year of assessment shall be construed as a reference to the income tax chargeable on the company for the year under Schedule D, after all allowances, deductions or set-offs due have been granted, in respect of the profits computed for the purpose of assessment, that income tax being diminished by income tax, computed at the standard rate of tax, on the amount of any payment payable by the company out of the profits, which, otherwise than under Rule 20 of the General Rules, the company is entitled to charge against any other person or to deduct, retain or satisfy out of any payment to any other person.

• (2) Where a deduction is allowed, in arriving at the amount of the profits computed for the purpose of assessment to income tax under Schedule D, on account of the annual value of any lands, tenements or hereditaments assessed under Schedule A, there shall, for the purpose of arriving at the net income tax, be added, to the income tax chargeable on the amount of the profits under Schedule D, the excess of the income tax contained in the assessment (as reduced for the purposes of collection, if it is so reduced) in respect of the said lands, tenements or hereditaments under Schedule A for the year of assessment over income tax computed at the standard rate of tax on any rent or annual payment to which the said lands, tenements or hereditaments are subject.

5 Relief from income tax.

5.—(1) The net income tax, for the year of assessment within which falls the commencement day (hereinafter in this Act referred to as the first year), shall not be payable.

• (2) The net income tax, for each of the three years of assessment (the last of which is hereinafter in this Act referred to as the fourth year) next following the first year, shall not be payable.

• (3)
• (a) The net income tax, for the year of assessment (hereinafter in this Act referred to as the fifth year) next following the fourth year, to the extent to which it exceeds the appropriate sum, shall not be payable.

• (b) In paragraph (a) of this subsection “the appropriate sum” means one-half of the sum which bears the same proportion to the net income tax for the fifth year as the number of days in the period beginning on the commencement day and ending on the 5th day of April in the first year bears to the total number of days in the first year.

• (4)
• (a) Subsection (3) of this section shall be subject to the proviso that, where the company ceases permanently within the fifth year to carry on the trade of working the mine, then—

• (i) if the cessation occurs before or on the last day of the period of forty-eight months beginning on the commencement day, the net income tax for the fifth year shall not be payable, and

• (ii) if the cessation occurs after the expiration of that period, so much of the net income tax for the fifth year as exceeds the appropriate sum shall not be payable.

• (b) In subparagraph (ii) of paragraph (a) of this subsection “the appropriate sum” means one-half of the sum which bears the same proportion to the net income tax for the fifth year as the number of days, in the period beginning on the day next following the last day of the period of forty-eight months which begins on the commencement day and ending on the day of the cessation, bears to the number of days in the period beginning on the first day of the fifth year and ending on the day of the cessation.

• (5) One-half of the net income tax for each of the three years of assessment (the last of which is hereinafter in this Act referred to as the eighth year) next following the fifth year shall not be payable.

• (6)
• (a) So much of the net income tax, for the year of assessment (hereinafter in this Act referred to as the ninth year) next following the eighth year, as is equal to the appropriate sum shall not be payable.

• (b) In paragraph (a) of this subsection “the appropriate sum” means one-half of the sum which bears the same proportion to the net income tax for the ninth year as the number of days in the period beginning on the 6th day of April in the first year and ending on the day immediately preceding the commencement day bears to the total number of days in the first year.

• (7)
• (a) Subsection (6) of this section shall be subject to the proviso that, where the company ceases permanently within the ninth year to carry on the trade of working the mine, then—

• (i) if the cessation occurs before or on the last day of the period of ninety-six months beginning on the commencement day, one-half of the net income tax for the ninth year shall not be payable, and

• (ii) if the cessation occurs after the expiration of that period, so much of the net income tax for the ninth year as is equal to the appropriate sum shall not be payable.

• (b) In subparagraph (ii) of paragraph (a) of this subsection “the appropriate sum” means one-half of the sum which bears the same proportion to the net income tax for the ninth year as the number of days, in the period beginning on the 6th day of April in the ninth year and ending on the last day of the period of ninety-six months beginning on the commencement day, bears to the number of days in the period beginning on the 6th day of April in the ninth year and ending on the date of the cessation.

• (8) The income tax on so much of the amount of the profits, as is equal to the total amount of any such payments by the company out of the profits as are referred to in section 4 of this Act, shall, notwithstanding anything contained in the foregoing subsections of this section, be payable in full.

6 Relief from corporation profits tax.

6.—(1) So much of the corporation profits tax chargeable on the company for an accounting period beginning on or after the commencement day and ending within a period (hereinafter in this Act referred to as the first term) of forty-eight months beginning on the commencement day as is referable to the profits shall not be payable.

• (2) One-half of so much of the corporation profits tax chargeable on the company for an accounting period beginning after the first term and ending within a period (hereinafter in this Act referred to as the second term) of forty-eight months beginning on the day next following the last day of the first term as is referable to the profits shall not be payable.

• (3) So much, as is referable to the profits, of the corporation profits tax chargeable on the company for an accounting period beginning before the commencement day and ending within the first term shall not be payable.

• (4) So much of the corporation profits tax chargeable on the company for an accounting period beginning within the first term and ending within the second term as is referable to the profits and is attributable to the part of the accounting period falling within the first term shall not be payable, and one-half of the corporation profits tax which is referable to the profits and is attributable to the part of the accounting period falling within the second term shall not be payable.

• (5) One-half of so much of the corporation profits tax chargeable on the company for an accounting period beginning before the end of the second term and ending after the second term as is referable to the profits and is attributable to the part of the accounting period falling within the second term shall not be payable.

• (6) For the purpose of giving effect to subsections (4) and (5) of this section, the corporation profits tax attributable, by virtue of those subsections, to the respective parts of an accounting period beginning within the first term and ending within the second term or, as the case may be, beginning before the end of the second term and ending after the second term, shall be ascertained by apportionment, and every such apportionment shall be made by reference to the respective lengths of the said parts:

Provided, however, that, if the company has ceased permanently during any such accounting period to carry on the trade of working the mine, then, for the purpose of ascertaining the amounts of the said corporation profits tax which are attributable to the parts of an accounting period beginning within the first term and ending within the second term or, as the case may be, to the parts of an accounting period beginning before the end of the second term and ending after the second term, the portion of the accounting period from the beginning thereof up to the date of cessation of the trade of working the mine shall be taken as a separate accounting period.

7 Dividends.

7.—(1) (a) For the purposes of this section, section 13 of the Finance Act, 1925 (No. 28 of 1925), shall apply to the company so that the statement required by that section shall, in relation to every warrant, cheque or order drawn or made by the company for the payment of any dividend payable wholly or in part out of the profits, show, in addition to any particulars required to be given apart from this section, either (as the case may require)—

• (i) that the whole of the sum for which the warrant, cheque or order is drawn or made is a payment of a dividend of the profits, or

• (ii) that a part (the gross amount of which, before any deduction in respect of income tax, is separately stated) of such sum is a payment out of the profits,

and such whole or such part is hereinafter in this section referred to as the relevant payment.

• (b) The said statement shall also show the period (hereinafter in this section referred to as the dividend period) out of the profit of which the relevant payment is made and—

• (i) where, as respects the relevant payment, the company is, in accordance with paragraph (a) of subsection (2) of this section, not entitled to deduct income tax, that fact shall be separately indicated in the said statement,

• (ii) where, as respects part of the relevant payment, the company is, in accordance with paragraph (b) of subsection (2) of this section, not entitled to deduct income tax, that part shall be separately indicated in the said statement,

• (iii) where, as respects the relevant payment, the amount of the income tax which the company would otherwise be entitled to deduct is, in accordance with paragraph (b) of subsection (2) of this section, reduced by one-half of such amount, that fact shall be separately indicated in the said statement, and

• (iv) where, as respects part of the relevant payment, the amount of the income tax which the company would otherwise be entitled to deduct is. in accordance with paragraph (b) of subsection (2) of this section, reduced by one-half of such amount, that part shall be separately indicated in the said statement.

• (2)
• (a) Where a dividend is paid wholly or in part out of the profits and, as respects such dividend, the dividend period is wholly within the first term, the company shall be entitled to deduct income tax in accordance with Rule 20 of the General Rules from such part, if any, of the dividend as exceeds the relevant payment, but shall not be entitled to deduct income tax from the relevant payment.

• (b) In every other case in which a dividend is paid wholly or in part out of the profits, the company shall be entitled to deduct income tax from the dividend in accordance with Rule 20 of the General Rules, provided, however, that—

• (i) where the dividend period is wholly within the second term, the amount of the income tax which the company would otherwise be entitled to deduct from the relevant payment under the said Rule 20 shall be reduced by one-half of such amount, and

• (ii) where the dividend period is not wholly within the second term—

• (I) the amount of the income tax which the company would otherwise be entitled under the said Rule 20 to deduct from any part of the relevant payment which is referable to any part of the dividend period within the second term shall be reduced by one-half of such amount, and

• (II) the company shall not be entitled to deduct income tax from any part of the relevant payment which is referable to any part of the dividend period within the first term.

• (3)
• (a) Where the relevant payment is made wholly out of the profits of a dividend period wholly within the first term, it shall not be included in a statement of total income for the purpose of any relief or repayment under the Income Tax Acts or for the purpose of sur-tax.

• (b) Where part of the relevant payment is referable to a part of a dividend period within the first term, that part of the relevant payment shall not be included in a statement of total income for the purposes aforesaid.

• (c) Where—

• (i) the relevant payment is made wholly out of the profits of a dividend period wholly within the second term; or

• (ii) part of the relevant payment is referable to a part of a dividend period within the second term,

then, notwithstanding anything contained in the Income Tax Acts—

• (I) no relief or repayment in respect of the income tax, which in accordance with paragraph (b) of subsection (2) of this section the company is entitled to deduct from the relevant payment or, as the case may be, the part of the relevant payment, shall be allowed at a rate greater than the rate at which, having regard to that paragraph, the company is entitled to deduct income tax from the relevant payment or, as the case may be, the part of the relevant payment, and

• (II) the relevant payment or, as the case may be, the part of the relevant payment shall be included in any statement of total income for the purpose of sur-tax to the extent only of one-half thereof.

8 Repayments.

8.—Any relief by way of repayment in respect of income tax contained in an assessment under Schedule D or under Schedule A, being an assessment such as is referred to in section 4 of this Act, shall be given at a rate to be ascertained by dividing so much of the net income tax for the year of assessment as, having regard to this Act, is payable, by an amount which, when charged at the standard rate of tax for the year, produces a sum equal to the net income tax for the year.

9 General restriction.

9.—(1) This Act shall not have effect for the purposes of income tax in relation to any year of assessment beginning after the expiration of the ninth year, but this provision shall not prevent section 7 of this Act from applying to a dividend paid after the expiration of the ninth year in a case in which the whole or part of the dividend is paid out of the profits of a period wholly or partly within the first term or the second term.

• (2) This Act shall not have effect for the purposes of corporation profits tax in relation to any accounting period beginning after the expiration of the second term.

10 Furnishing of information.

10.—The Revenue Commissioners may by notice in writing require the company to furnish them, within such time as they may direct, with such accounts and other particulars as the Revenue Commissioners think necessary for the purposes of this Act, and if the company, without reasonable excuse, fails to comply with the notice, it shall be liable to a penalty not exceeding one hundred pounds and, after judgment has been given for that penalty, to a further penalty of the like amount for each day during which that failure continues.

11 Application to existing mines.

11.—(1) In this section—

“existing mine” means a mine in so far only as existing mining operations are carried on therein;

“the relevant years of assessment” means the years of assessment for the purposes of income tax beginning on or after the 6th day of April, 1956;

“the relevant accounting periods” means the accounting periods, for the purposes of corporation profits tax, beginning on or after the 6th day of April, 1956, and the parts subsequent to the 5th day of April, 1956, of accounting periods, for the purposes of corporation profits tax, current on the 6th day of April, 1956.

• (2) Subject to the subsequent subsections of this section, for the relevant years of assessment and for the relevant accounting periods the foregoing provisions of this Act shall, with any necessary modifications, apply in the case of profits (hereinafter in this section referred to as the said profits) derived by a company (hereinafter in this section referred to as the established company), incorporated in the State prior to the 1st day of January, 1956, and resident therein for the purposes of income tax, from the working of an existing mine, as those provisions apply to profits derived from the working of a qualifying mine, and for the purpose of applying those provisions in any such case—

• (a) the day on which the established company commenced to carry on the trade of working the existing mine shall be taken to be the commencement day, and

• (b) the liability of the established company to income tax for the relevant years of assessment and to corporation profits tax for the relevant accounting periods shall be computed and dealt with as if those provisions had been in force on the day so taken and had been applicable to the said profits at all material times up to the 5th day of April, 1956.

• (3) Nothing in this section shall operate to reduce the amount of income tax payable by the established company for any year of assessment prior to the relevant years of assessment or to reduce the amount of corporation profits tax payable by the established company for any period prior to the relevant accounting periods.

• (4)
• (a) There shall be excluded from the application of section 7 of this Act any dividend paid by the established company out of profits of the existing mine as respects which the dividend period is a period prior to the 6th day of April, 1956, and, in the case of any such dividend as respects which the dividend period consists of a part prior to the 6th day of April, 1956, and a part subsequent to the 5th day of April, 1956, there shall be excluded from the application of that section such part of the dividend as is referable to the part of the dividend period prior to the 6th day of April, 1956, but the foregoing provisions of this paragraph are without prejudice to the entitlement of the established company to deduct income tax from any such dividend or any such part of a dividend.

• (b) In paragraph (a) of this subsection “dividend period” means the period out of profits of which a dividend is paid.

• (5) The necessary apportionments shall be made for the purpose of giving effect to this section as respects corporation profits tax in the case of accounting periods beginning before the 6th day of April, 1956, and ending on or after that day, and any such apportionment shall be made in proportion to the respective lengths of the part of the accounting period prior to the 6th day of April, 1956, and the part thereof subsequent to the 5th day of April, 1956.

12 Change of company.

12.—(1) In this section “mine” means a mine which is—

• (a) a qualifying mine, or

• (b) an existing mine within the meaning of section 11 of this Act.

• (2) Where—

• (a) a company (hereinafter in this section referred to as the original company) ceases after the 5th day of April, 1956, to carry on the trade of working a mine to profits of which this Act had applied immediately prior to the date of cessation, and

• (b) another company (hereinafter in this section referred to as the later company) subsequently commences to carry on such a trade in relation to the mine,

the later company, if it is incorporated in the State and resident therein for the purposes of income tax, shall be given relief, from the payment of its net income tax and of the corporation profits tax referable to its profits from the said trade, to the same extent (but only to the same extent), and for the same years and periods (but only for the same years and periods), as would have been proper if the original company had not ceased to carry on the said trade and if the said net income tax and corporation profits tax, instead of being chargeable on the later company, were chargeable on the original company, and the provisions of this Act shall, for the purposes of this section, apply with any necessary modifications.

13 Short title and construction.

13.—(1) This Act may be cited as the Finance (Profits of Certain Mines) (Temporary Relief from Taxation) Act, 1956.

• (2) This Act shall, so far as it relates to income 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.

SCHEDULE. Scheduled Minerals.