Income Tax Act , 1967

(a) a company has issued any stocks, shares, or securities in respect of which a certificate under section 329 (2) has been given and continues to have effect, and

(b) the company subsequently issues any stocks, shares, or securities—

(i) offered or allotted to the holders as such, at or about the time of such subsequent issue, of the first-mentioned stocks, shares, or securities or of a particular class thereof, and

(ii) so offered or allotted on a basis calculated by reference to the respective holdings of those holders,

the stocks, shares, or securities which the company subsequently issues as aforesaid shall, for the purposes of section 329, be deemed to be issued for public subscription.

(2) Notwithstanding anything contained in section 329 (2) (b) (c) a certificate may be given under section 329 (2) in respect of any stocks, shares, or securities of a company which were or are issued as fully paid up and which, by virtue of subsection (1) of this section, are deemed to be issued for public subscription.

(3) Where a certificate is given under section 329 (2) in respect of any stocks, shares, or securities relief or repayment under section 329 (1) shall not be granted in respect of any dividend or interest on the stocks, shares, or securities which was payable before the date of the certificate.

Chapter II Stocks, Shares, and Securities of Manufacturing Companies

332 Relief to investors.

332.—(1) Where an individual who is resident in the State and is not resident elsewhere claims and proves to the satisfaction of the Special Commissioners that he is entitled to the beneficial ownership of any stock, shares, or security to which this section applies, the following provisions shall have effect, that is to say:—

(a) such individual shall be entitled to repayment of 20 per cent. of the income tax applicable to any dividend or interest received by him in respect of such stock, shares, or security, save in so far as relief or repayment in respect of such tax has been or is granted under any other provision of this Act;

(b) in estimating the total income from all sources of such individual for the purposes of income tax and sur-tax the amount of any dividend or interest in respect of such stock, shares, or security shall be deemed to be diminished by 20 per cent.

(2) This section shall apply to all stocks, shares, and securities issued whether before or after the passing of this Act by a company whose trade or business consists wholly or mainly of the production for sale of manufactured goods, and in respect of which the Revenue Commissioners certify that they are satisfied that all the following conditions are complied with in relation to such stock, share, or security, that is to say:

(a) such stock, share, or security is or was issued by a company which complies with the following provisions, that is to say, such company—

(i) is incorporated by or under the laws of the State, and

(ii) is a company limited by shares within the meaning of the Companies Act, 1963, and

(iii) is managed and controlled in the State, and

(iv) carries on or (in the case of a company which has not commenced to carry on business) intends to carry on its business wholly or mainly in the State; and

(b) the stocks, shares, or securities—

(i) have been issued for public subscription, or

(ii) belong to a class of the company's stocks, shares, or securities that is quoted on a stock exchange in the State, and the number of individuals as described in subsection (1) who are beneficial owners of stocks, shares, or securities of that class is not less than fifty; and

(c) such issue of stock, shares, or security is so described and designated that it is readily distinguishable from all other (if any) issues of such company.

(3) Every warrant, cheque, or order drawn or made for the payment of any dividend or interest in respect of any stock, share, or security to which this section applies shall indicate clearly either (as the case may require)—

(a) that the whole of the sum for which such warrant, cheque, or order is drawn or made is a payment of or on account of dividend or interest in respect of such stock, share, or security; or

(b) that a part (the amount of which is separately stated) of such sum is a payment of or on account of such dividend or interest.

(4) Any stock, share, or security to which this section applies shall cease to be a stock, share, or security (as the case may be) to which this section applies if and when the Revenue Commissioners certify in relation to such stock, share, or security that they are satisfied that the company's trade or business has ceased to consist wholly or mainly of the production for sale of manufactured goods or that, as respects the company, all or any of the conditions set forth in subsection (2) (a) or, as respects such stock, share, or security, all or any of the conditions set forth in subsection (2) (b) (c), or in subsection (3), have ceased to be complied with.

(5) Where—

(a) the company has issued any stocks, shares, or securities in respect of which a certificate under subsection (2) has been given and continues to have effect, and

(b) the company subsequently issues any stocks, shares, or securities—

(i) offered or allotted to the holders as such, at or about the time of such subsequent issue, of the first-mentioned stocks, shares, or securities or of a particular class thereof, and

(ii) so offered or allotted on a basis calculated by reference to the respective holdings of those holders,

the stocks, shares, or securities which the company subsequently issues as aforesaid shall, for the purposes of this section, be deemed to be issued for public subscription.

(6) Where—

(a) a company (in this subsection referred to as the holding company) holds beneficially more than 90 per cent. (in nominal value) of the issued stocks, shares, and securities of any other company or companies,

(b) all of such stocks, shares, or securities are such as would qualify for a certificate of the Revenue Commissioners under subsection (2) but for paragraph (b) of that subsection, and

(c) such holding is the sole or main business of the holding company,

subsections (2) and (4) shall, so long as the foregoing conditions subsist, have effect in relation to stocks, shares, and securities issued by the holding company as if the holding company were a company whose trade or business consisted wholly or mainly of the production for sale of manufactured goods.

(7) Nothing in this section shall—

(a) affect the validity of any certificate under section 329 (2) issued before the 18th day of July, 1957, or

(b) in a case in which such a certificate has been so issued, prevent the issue of a certificate under section 329 (4).

(8) Where a certificate is given under subsection (2) relief or repayment under subsection (1) shall not be granted in respect of any dividend or interest on the stocks, shares, or securities which was payable before the date of the certificate.

PART XXI Charitable and Other Exemptions

333 Rents of property belonging to hospitals and other charities.

333.—(1) Exemption shall be granted—

(a) from income tax chargeable under Schedule A or, by virtue of Chapter VI of Part IV, under Schedule D, in respect of the rents and profits of any property belonging to any hospital, public school or almshouse, or vested in trustees for charitable purposes, so far as the same are applied to charitable purposes only:

Provided that any assessment upon the respective properties shall not be vacated or altered, but shall be in force and levied, notwithstanding the allowance of any such exemption;

(b) from income tax chargeable under Schedule C in respect of any interest, annuities, dividends or shares of annuities, and from income tax chargeable under Schedule D, in respect of any yearly interest or other annual payment forming part of the income of any body of persons or trust established for charitable purposes only, or which, according to the rules or regulations established by statute, charter, decree, deed of trust, or will, are applicable to charitable purposes only, and so far as the same are applied to charitable purposes only;

(c) from income tax chargeable under Schedule C in respect of any interest, annuities, dividends or shares of annuities, in the names of trustees applicable solely towards the repairs of any cathedral, college, church or chapel, or any building used solely for the purposes of divine worship, and so far as the same are applied to those purposes.

(2) (a) This subsection applies to every gift (within the meaning of the Charities Act, 1961) made before the 1st day of July, 1961, which, if it had been made on or after that day would, by virtue of section 50 of that Act (which relates to gifts for graves and memorials) have been, to the extent provided in that section, a gift for charitable purposes.

(b) Subsection (1) shall have effect in relation to a gift to which this subsection applies as if the gift had been made on or after the 1st day of July, 1961.

334 Lands owned and occupied, and trades carried on, by charities.

334.—(1) Exemption shall be granted—

(a) from income tax chargeable under Schedule A in respect of property owned and occupied by a charity, not being such lands, tenements, or hereditaments as are mentioned in section 27;

(b) from income tax chargeable under Schedule B in respect of lands occupied by a charity:

Provided that the exemption under this paragraph shall not apply in the case of lands which are occupied for the purpose of husbandry unless the profits, if any arising therefrom are applied solely to the purposes of the charity;

(c) from income tax chargeable under Schedule D in respect of the profits of a trade carried on by any charity, if the profits are applied solely to the purposes of the charity and either—

(i) the trade is exercised in the course of the actual carrying out of a primary purpose of the charity, or

(ii) the work in connection with the trade is mainly carried on by beneficiaries of the charity.

(2) The exemption granted by subsections (1) (a) and (1) (b) shall not extend to tax in respect of any rent payable or other annual payment to be made by a charity in respect of the lands, tenements, or hereditaments, or to any parts of those lands, tenements, or hereditaments, which are in the use and enjoyment of a person whose total annual income from all sources estimated in accordance with the provisions of this Act amounts to not less than £150.

(3) In this section “charity” means any body of persons or trust established for charitable purposes only.

335 Friendly societies.

335.—An unregistered friendly society whose income does not exceed £160 shall be entitled to exemption from tax, and a registered friendly society which is precluded, by statute or by its rules, from assuring to any person a sum exceeding £300 by way of gross sum, or £52 a year by way of annuity, shall be entitled to exemption from tax under Schedules A, C, and D.

336 Trade unions.

336.—A registered trade union which is precluded, by statute or by its rules, from assuring to any person a sum exceeding £600 by way of gross sum, or £250 a year by way of annuity, shall be entitled to exemption from tax under Schedules A, C, and D in respect of its interest and dividends which are applicable and applied solely for the purpose of provident benefits.

In this section, “provident benefits” includes any payment, expressly authorised by the registered rules of the trade union, which is made to a member during sickness or incapacity from personal injury or while out of work, or to an aged member by way of superannuation, or to a member who has met with an accident, or has lost his tools by fire or theft, and includes a payment in discharge or aid of funeral expenses on the death of a member, or the wife of a member, or as provision for the children of a deceased member.

337 Savings Banks.

337.—(1) Any savings bank certified under the Trustee Savings Bank Acts, 1863 to 1958, shall be entitled to exemption from tax in respect of its interest and dividends—

(a) arising from investments with the National Debt Commissioners, and

(b) arising from investments of moneys to the credit of the special account opened in pursuance of section 31 (3) of the Finance Act, 1940.

(2) Any savings bank, whether certified under the Trustee Savings Bank Acts, 1863 to 1958, or not, shall be entitled to exemption from tax under Schedules C and D in respect of the income of its funds, so far as such income is applied in the payment or credit of interest to any depositor:

Provided that—

(a) any such interest shall be chargeable under Case III of Schedule D; and

(b) where the interest paid or credited to any depositor in the year for which exemption is claimed by the bank exceeds the sum of £5, the bank and any branch thereof shall make a return to the inspector for the district in which the bank or branch is situate of the name and place of residence of every depositor to whom any such sum has been paid or credited, and of the amount thereof, and unless such returns are duly made, the bank shall not be entitled to any relief in respect of any such sums. Any such return shall be made on or before the 1st day of May in the year following that in respect of which exemption is claimed.

338 Relief for income from investments under Social Welfare Act, 1952.

338.—The Minister for Finance shall be entitled to exemption from tax in respect of the income derived from investments made under section 39 of the Social Welfare Act, 1952.

339 Repayment claims.

339.—(1) Any claim under sections 333 and 335 to 337 shall be made to the Special Commissioners in writing, in such form as may be prescribed by the Revenue Commissioners, and the Special Commissioners on proof of the facts to their satisfaction shall allow such claim accordingly.

(2) The Special Commissioners shall require every such claim to be verified by affidavit, and proof of the claim may be given by the treasurer, trustee, or any duly authorised agent.

(3) Where the Special Commissioners allow a claim they shall issue an order for repayment.

(4) A person who makes a false or fraudulent claim for exemption under the said sections in respect of any interest, annuities, dividends or shares of annuities charged or chargeable under Schedule C shall forfeit the sum of £100.

340 Military and other pensions, gratuities and allowances.

340.—(1) Income to which this section applies shall be exempt from tax and shall not be reckoned in computing income for the purposes of this Act.

(2) This section applies to—

(a) (i) all wound and disability pensions, and all increases in such pensions, granted under the Army Pensions Acts, 1923 to 1962, or those Acts and any subsequent Act together with which those Acts may be cited;

(ii) all gratuities in respect of wounds or disabilities similarly granted:

Provided that, where the amount of any pension to which subparagraph (i) applies is not solely attributable to disability, the relief conferred by this section shall extend only to such part as is certified by the Minister for Defence to be attributable to disability;

(b) military gratuities and demobilisation pay granted to officers of the National Forces or the Defence Forces of Ireland on demobilisation;

(c) (i) deferred pay, within the meaning of any regulations under the Defence Act, 1954, which is credited to the pay account of a member of the Defence Forces;

(ii) gratuities granted in respect of service with the Defence Forces;

(d) (i) every allowance granted under section 8 of the Army Pensions Act, 1923, or under section 12 of the Army Pensions Act, 1932, as amended by the Army Pensions Act, 1927, by the Army Pensions Act, 1937, or by the Army Pensions (Increase) Act, 1949, to the widow or to any child or dependant of a person who was killed during the Rising of April and May, 1916;

(ii) any allowance granted under section 4 of the Army Pensions Act, 1953, to the widow, parent, sister or brother of a person who was killed during the Rising of April and May, 1916;

(iii) any allowance payable under section 3 of the Army Pensions Act, 1937;

(iv) any allowance payable under section 45 of the Army Pensions Act, 1953;

(e) any yearly sum payable under section 1 of the Griffith Settlement Act, 1923;

(f) the pension payable under section 1 of the MacSwiney (Pension) Act, 1950;

(g) a pension payable under the Pensions Act, 1952.

(3) In subsection (2) (d), “killed” has the same meaning as it has in section 8 of the Army Pensions Act, 1923.

341 Exemption of Commonwealth representatives.

341.—(1) Subject to the provisions of this section, exemption shall be granted from tax in respect of the emoluments payable by a Government to which this section for the time being applies to any person employed by such Government as a diplomatic or trade representative or other like representative in the State or as a member of the staff in the State of such representative and no account shall be taken of any such emoluments in estimating the amount of the income of such person for the purposes of this Act.

(2) Exemption shall be granted to a person under this section in respect only of a period during which such person is shown to the satisfaction of the Revenue Commissioners to have been resident in the State solely for the purpose of performing the duties in respect of which the said emoluments are payable to him and not to have been exercising in the State any other trade, employment, or vocation.

(3) If any person has paid tax from which he would be entitled to be exempted under this section he shall be entitled to repayment of such tax.

(4) This section applies to every Government of the several countries comprised in the British Commonwealth of Nations in respect of which the Revenue Commissioners are for the time being satisfied that it gives to diplomatic and trade representatives of the Government of Ireland and the members of their staffs a similar exemption to that given by this section to the diplomatic and trade representatives of the first-mentioned Government and the members of their staffs.

342 Exemption of consular representatives.

342.—(1) Subject to the provisions of this section, exemption shall be granted from tax in respect of the emoluments payable by a foreign state to which this section applies to any person who, being a citizen of such foreign state, is permanently employed in the consular service of such state and is appointed to serve in the State and in respect of any income arising outside the State accruing to any such person, and no account shall be taken of any such emoluments or income in estimating the amount of income of such person for the purposes of this Act.

(2) If any person has paid tax from which he would be entitled to be exempted under this section he shall be entitled to repayment of such tax.

(3) This section applies to every foreign state in respect of which the Revenue Commissioners are for the time being satisfied that it gives to persons permanently employed in the consular service of the State a similar exemption to that given by this section to persons permanently employed in the consular service of such foreign state.

343 Exemption of harbour authorities.

343.—Exemption shall be granted from tax under Schedule D in respect of so much of the profits or gains of an authority controlling a harbour situate within the State as arise from the provision in that harbour of such facilities and accommodation for vessels, goods and passengers as are ordinarily provided by authorities controlling harbours, situate within the State, in those harbours.

344 Exemption of interest on certain deposits.

344.—(1) Where the total income of an individual for the year of assessment includes, or would but for this section include, any sums (in this section referred to as the said sums) paid or credited in respect of interest on deposits with a trustee savings bank, with the Post Office Savings Bank or with any of the commercial banks, the said sums shall be disregarded for all the purposes of this Act if or in so far as the said sums do not exceed £50, but the provisions of this Act as regards the making by the individual of a return of his total income shall apply as if this section had not been enacted.

(2) For the purposes of subsection (1) the question whether or how far the said sums exceed £50 shall, where by virtue of section 192, a woman's income is deemed to be her husband's, be determined separately as regards the part of his income which is his by virtue of that section and the part which is his apart from that section.

(3) Where any sums arising to an individual are, by virtue of this section, to be disregarded, the individual shall not be treated, by reason of such disregarding, as having ceased to possess the whole of a single source within the meaning of section 75.

(4) In this section—

“total income” means total income from all sources as estimated in accordance with the provisions of this Act;

“the commercial banks” means the Bank of Ireland, the Hibernian Bank, Limited, the Munster and Leinster Bank, Limited, The National Bank of Ireland Limited, the Northern Bank, Limited, the Provincial Bank of Ireland, Limited, the Royal Bank of Ireland, Limited, the Ulster Bank, Limited, Ansbacher & Company, Limited, the Commercial Banking Company, Limited, Guinness & Mahon and the National City Bank, Limited;

“trustee savings bank” has the same meaning as in the Trustee Savings Banks Acts, 1863 to 1958.

345 Exemption of interest on certain securities.

345.—Income tax or sur-tax shall not be chargeable in respect of the interest on securities which are issued by the Minister for Finance for the purpose of being used in payment of income tax or sur-tax and such interest shall not be reckoned in computing income for the purposes of this Act.

346 Exemption of sweepstake profits.

346.—(1) Exemption shall be granted from tax under Schedule D in respect of the profits of any sweepstake held under the Public Hospitals Act, 1933, which, but for this section, would have been assessable under Case I of the said Schedule D on the organisers (within the meaning of the said Public Hospitals Act, 1933) of such sweepstake or on the sweepstake committee appointed in pursuance of that Act for the purpose of such sweepstake by the said organisers thereof.

(2) In this section, “sweepstake” has the meaning given to it by section 1 of the Public Hospitals Act, 1933, for the purposes of that Act.

347 Carrying out of voluntary health schemes—deeming not to be trade.

347.—The business of carrying out under section 4 of the Voluntary Health Insurance Act, 1957, schemes of voluntary health insurance shall, for all the purposes of this Act in relation to the Voluntary Health Insurance Board, be deemed not to be a trade, and accordingly, in particular and without prejudice to the generality of the foregoing, that Board shall be exempt from income tax under Case I of Schedule D in respect of profits or gains arising from that business:

Provided that that Board shall be entitled to relief under section 307, as if the foregoing provisions of this section had not been enacted.

348 Exemption of profits of agricultural societies.

348.—(1) Any profits or gains arising to an agricultural society from an exhibition or show held for the purposes of the society shall, if they are applied solely to the purposes of the society, be exempt from income tax.

(2) In this section “agricultural society” means any society or institution established for the purpose of promoting the interests of agriculture, horticulture, live-stock breeding, or forestry.

349 Exemption of bodies established for promotion of athletic or amateur games or sports.

349.—Exemption shall be granted from income tax in respect of so much of the income of any body of persons established for the sole purpose of promoting athletic or amateur games or sports as is shown to the satisfaction of the Revenue Commissioners to be income which has been or will be applied to that purpose.

350 Exemption of profits from lotteries.

350.—Exemption from income tax shall be granted in respect of profits from a lottery to which a licence under Part IV of the Gaming and Lotteries Act, 1956, applies.

351 Exemption of sewers.

351.—(1) Income tax shall not be charged in respect of a sewer vested in a local authority:

Provided that the foregoing exemption shall not extend to any rent payable or other annual payment to be made by the local authority in respect of the sewer.

(2) In this section—

“sewer” means a sewer maintained by a local authority in pursuance of their statutory duties in relation to the public health;

“local authority” means a public body having power under any enactment relating to the public health to construct and maintain sewers.

352 Exemption of air raid protection works.

352.—(1) Exemption shall be granted from tax under Schedule A in respect of any hereditament which is not let in whole or in part and, pursuant to subsection (3) of section 59 of the Air-raid Precautions Act, 1939, is not rated.

(2) Where in ascertaining under the Valuation Acts the valuation of a hereditament which is a mill, factory, or other similar premises, no regard is, pursuant to subsection (2) of section 59 of the Air-raid Precautions Act, 1939, to be had to any room or other part of such hereditament or to any structural alterations or improvements to such hereditament, the amount of any deduction to be allowed under section 65 shall be increased by an amount equal to one-sixth of the difference between the annual value of such hereditament and the annual value of such hereditament estimated on the basis that regard is to be had to (as the case may be) such room or other part or such structural alterations or improvements.

353 Exemption of income from scholarships.

353.—(1) Income arising from a scholarship held by a person receiving full-time instruction at a university, college, school, or other educational establishment, shall be exempt from tax and no account shall be taken of any such income in computing the amount of income for the purposes of this Act.

(2) In this section “scholarship” includes an exhibition, bursary, or any other similar educational endowment.

(3) If any question arises whether any income is income arising from a scholarship held as aforesaid, the Revenue Commissioners may consult the Minister for Education.

354 Exemption of children's allowances.

354.—A children's allowance under the Social Welfare (Children's Allowances) Acts, 1944 to 1963, or those Acts and any subsequent Act together with which those Acts may be cited, shall be exempt from tax and shall not be reckoned in computing income for the purposes of this Act.

PART XXII Relief from Double Taxation

355 Agreements relating to Northern Ireland and Great Britain.

355.—(1) The confirmation, by section 2 of the Finance Act, 1926, section 8 of the Finance Act, 1928, section 2 of the Finance Act, 1948, section 10 of the Finance Act, 1959, and section 34 of the Finance Act, 1960, of the agreements in force at the commencement of this Act between the State and the United Kingdom which are set forth in Schedule 6, Part I, is not affected by the repeal, by this Act, of those sections.

(2) Accordingly the first of the said agreements, as modified by the second, third, fourth and fifth of the said agreements, shall, for any year of assessment for which, under the law of the United Kingdom, it has effect with respect to exemption and relief from United Kingdom tax, have effect with respect to exemption or relief to be granted from Irish tax, and the references in the said agreements to enactments repealed by this Act shall be taken for that purpose to be references to the corresponding provisions of this Act:

Provided that, in Article 2(1) of the first of the said agreements, as amended by Article 2 of the second of the said agreements, the references to section 27 of the Finance Act, 1920, shall be taken for the said purpose to be references to Schedule 6, Part II, which re-enacts the provisions of the said section 27 with the amendments made therein by subsequent enactments and with certain omissions and adaptations of provisions and phrases which have become inapt or unnecessary.

(3) For the purpose of giving effect to the said agreements, this Act, in relation to—

(a) persons resident in the State, whether or not also resident in Northern Ireland or Great Britain; and

(b) claims by persons resident in Northern Ireland or Great Britain,

shall, for any year for which the said agreements are in force, have effect subject to the modifications set out in Schedule 6, Part III.

(4) For the purpose of carrying out any obligation under Article 2 of the Agreement of the 23rd June, 1960, set forth in Schedule 6, Part I, the Government may by order direct that any provisions of this Act specified in the order, being provisions affecting in any way exemptions from income tax of persons resident in the State, shall not affect, and be deemed not to have affected, exemptions from income tax which persons enjoy as not resident in the State but resident in the United Kingdom, and any such order shall have effect accordingly.

356 Further relief for certain double residents.

356.—Where the Revenue Commissioners are satisfied in respect of any person—

(a) that such person is entitled under Article 2 of the Agreement made 25th April, 1928, set forth in Schedule 6, Part I, to be allowed relief from double taxation for any particular year, and

(b) that the principal place of abode of such person for the said year was situate in Northern Ireland or Great Britain, and

(c) that such person did not in the said year spend in the aggregate more than six months in the State, and

(d) that the total amount of income tax and sur-tax (including British as well as Irish income tax and sur-tax) payable by such person for the said year after deduction of all such relief from double taxation as aforesaid exceeds the total amount of British income tax and sur-tax which would have been payable by such person for the said year if he had not been resident in the State for that year,

the Revenue Commissioners may grant to such person such further relief from Irish income tax and sur-tax as in their opinion is just, but not exceeding the amount by which the total amount of income tax and sur-tax (including British as well as Irish income tax and sur-tax) mentioned in paragraph (d) exceeds the total amount of British income tax and sur-tax mentioned in that paragraph.

357 Allowance of United Kingdom corporation tax as a credit against income tax.

357.—(1) In this section and Schedule 7—

“company” means any body corporate;

“corporation tax” means the tax in Northern Ireland and Great Britain known as corporation tax;

“profits” in relation to income tax means income.

(2) Subject to the provisions of Schedule 7, corporation tax payable in respect of profits arising in Northern Ireland or Great Britain shall, to the extent to which it is to be taken into account for the purposes of this section, be allowed as a credit against the income tax chargeable for any year of assessment by reference to those profits.

(3) Where a dividend is paid by a company resident in Northern Ireland or Great Britain to a company which beneficially owns, directly or indirectly, not less than three-quarters of the ordinary share capital of the former company, the credit shall take into account the corporation tax payable by the former company in respect of its profits.

(4) The corporation tax payable in respect of any profits shall be taken into account for the purposes of this section—

(a) where the profits are subject to corporation profits tax, only to the extent that it cannot, on due claim having been made in that behalf, be allowed as a credit against corporation profits tax, or

(b) where the profits are not subject to corporation profits tax, only to the extent that it could not, on due claim having been made in that behalf, have been allowed as a credit against corporation profits tax if the profits had been subject to that tax as profits of a company incorporated by or under the laws of the State.

(5) In a case in which relief is allowed under this section, section 363 (3) shall have effect in relation to a dividend paid before the passing of the Finance Act, 1966, as it has effect in relation to a dividend paid before the making by the Government of an order to which section 361 (1) relates.

358 Convention with United States of America.

358.—(1) The confirmation, by section 12 of the Finance Act, 1950, of the Convention set forth in Schedule 8 and concluded on the 13th day of September, 1949, between the Government of Ireland and the Government of the United States of America is not affected by the repeal, by this Act, of the said section 12.

(2) For the purpose of giving effect to the Convention, the provisions set forth in Schedule 10 shall have effect.

(3) The Revenue Commissioners may from time to time make regulations in relation to the granting of the reliefs specified in the Convention and may, in particular, by those regulations provide—

(a) for securing that no such reliefs from taxation imposed by the laws of the United States of America as are provided for in the Convention shall enure to the benefit of persons not entitled thereto, and

(b) for authorising, in cases where tax deductible from any periodical payment has, in order to comply with the terms of the Convention, not been deducted and it is discovered that the Convention does not apply to that payment, the recovery of the tax by assessment on the person entitled to the payment or by deduction from subsequent payments.

359 Relief in respect of ships documented under laws of United States of America.

359.—Exemption shall be granted from tax in respect of so much of the income of a citizen of the United States of America not resident in the State or of a corporation organised in the United States of America as is derived from the operation of a ship or ships documented under the laws of the United States of America.

360 Agreement with Canada.

360.—(1) The confirmation, by section 14 of the Finance Act, 1955, of the Agreement set forth in Schedule 9 and concluded on the 28th day of October, 1954, between the Government of Ireland and the Government of Canada is not affected by the repeal, by this Act, of the said section 14.

(2) For the purpose of giving effect to the Agreement the provisions set forth in Schedule 10 shall have effect.

(3) The Revenue Commissioners may from time to time make regulations in relation to the granting of the reliefs specified in the Agreement and may, in particular, by those regulations provide—

(a) for securing that no such reliefs from taxation imposed by the laws of Canada as are provided for in the Agreement shall enure to the benefit of persons not entitled thereto, and

(b) for authorising, in cases where tax deductible from any periodical payment has, in order to comply with the terms of the Agreement, not been deducted and it is discovered that the Agreement does not apply to that payment, the recovery of the tax by assessment on the person entitled to the payment or by deduction from subsequent payments.

361 Agreements for relief from double taxation of income.

361.—(1) If the Government by order declare that arrangements specified in the order have been made with the government of any territory outside the State in relation to affording relief from double taxation in respect of income tax, sur-tax or corporation profits tax and any taxes of a similar character, imposed by the laws of the State or by the laws of that territory, and that it is expedient that those arrangements should have the force of law, then, subject to the provisions of this Part, the arrangements shall, notwithstanding anything in any enactment, have the force of law.

(2) The provisions of Schedule 10 shall have effect where arrangements which have the force of law by virtue of this section provide that tax payable under the laws of the territory concerned shall be allowed as a credit against tax payable in the State.

(3) Any arrangements to which the force of law is given under this section may include provision for relief from tax for periods before the passing of this Act or before the making of the arrangements and provisions as to income which is not itself subject to double taxation, and the preceding provisions of this section shall have effect accordingly.

(4) For the purposes of subsection (1), arrangements made with the head of a foreign state shall be regarded as made with the government thereof.

(5) Any order made under this section may be revoked by a subsequent order and any such revoking order may contain such transitional provisions as appear to the Government to be necessary or expedient.

(6) Where an order is proposed to be made under this section, a draft thereof shall be laid before Dáil Éireann and the order shall not be made until a resolution approving of the draft has been passed by Dáil Éireann.

(7) Where any arrangements have the force of law by virtue of this section, the obligation as to secrecy imposed by any enactment shall not prevent the Revenue Commissioners or any authorised officer of the Revenue Commissioners from disclosing to any authorised officer of the government with which the arrangements are made such information as is required to be disclosed under the arrangements.

(8) The Revenue Commissioners may from time to time make regulations generally for carrying out the provisions of this section or any arrangements having the force of law thereunder and may, in particular, but without prejudice to the generality of the foregoing, by those regulations provide—

(a) for securing that relief from taxation imposed by the laws of the territory to which any such arrangements relate does not enure to the benefit of persons not entitled thereto, and

(b) for authorising, in cases where tax deductible from any periodical payment has, in order to comply with any such arrangements, not been deducted and it is discovered that the arrangements do not apply to that payment, the recovery of the tax by assessment on the person entitled to the payment or by deduction from subsequent payments.

362 Relief on profits from business of sea or air transport.

362.—(1) In this section—

“business of sea or air transport” means the business of transporting persons, goods or mail carried on by the owner or charterer of ships or aircraft;

“arrangement to which this section applies” means an arrangement entered into by the Government with the government of a foreign state with a view to affording relief from double taxation in cases where income derived from the business of sea or air transport is chargeable both in the State and in the foreign state to income tax, or to any tax corresponding to income tax, or to any other tax on profits, whether such arrangement is to afford relief as from the date when it is entered into, a date after that date or a date before that date.

(2) For the purposes of this section, an arrangement made with the head of a foreign state shall be regarded as made with the government thereof.

(3) Subject to subsections (4) and (5), the Government may by order confirm and give the force of law to an arrangement to which this section applies.

(4) Where an order is proposed to be made under this section, a draft thereof shall be laid before Dáil Éireann and the order shall not be made until a resolution approving of the draft has been passed by Dáil Éireann.

(5) Where an order is made under this section, the arrangement to which it relates shall have the force of law only if and so long as such arrangement, in so far as it relates to the relief to be granted by the foreign state, has the force of law in that state.

363 Treatment of dividends for double taxation relief in certain cases.

363.—(1) In this section—

“dividend” means a dividend from which deduction of tax is authorised by section 456;

“the company” means a body of persons paying a dividend;

“double taxation relief” means any credit for tax (other than British income tax) payable in any territory outside the State, which is allowable against Irish income tax by virtue of section 357 or of any international agreement having the force of law, including any such credit which has been taken into account in relation to any dividends receivable by the company;

“the reduced Irish rate” means the rate of Irish income tax payable directly or by deduction by the company after taking double taxation relief into account.

(2) (a) Notwithstanding anything in this Act, no relief or repayment in respect of the tax deducted or authorised to be deducted from any dividend shall, in a case in which there is double taxation relief, be allowed at a rate exceeding the reduced Irish rate.

(b) Where the reduced Irish rate falls to be computed in relation to a dividend, the particulars to be given by the company in the statement required by sections 457 and 458 shall (in addition to the particulars required to be given apart from this section) include particulars of the reduced Irish rate.

(3) Where (whether before or after the passing of this Act) a dividend has been paid before the making by the Government of an order to which section 361 (1) relates, and any double taxation relief would have fallen to be taken into account in relation to that dividend if this section had applied thereto, that relief shall be taken into account as far as possible in determining the reduced Irish rate in relation to the first dividend payable by the company after the making of the order, and any part of that relief which cannot be so taken into account shall as far as possible be taken into account in relation to the next succeeding dividend, and so on.

(4) Where the whole or any part of any annual payment is payable out of a dividend, and the rate of relief or repayment allowable in respect of the tax deducted or authorised to be deducted from the dividend is affected by double taxation relief, the annual payment, or that part thereof, as the case may be, shall be deemed to be paid out of profits or gains not brought into charge to tax and section 434 shall apply accordingly, but the tax recoverable under section 434 from the person making the payment shall be reduced by an amount equal to tax on the payment or part of the payment at the reduced Irish rate applicable to the dividend.

364 Determination of “reduced Irish rate” for section 363.

364.—(1) In this section, “the reduced Irish rate”, “double taxation relief”, “the company” and “dividend” have the same meaning as in section 363.

(2) The reduced Irish rate in relation to any dividend shall be taken to be the rate which is produced by deducting—

(a) the rate of double taxation relief for the period for which the dividend is paid, from

(b) the rate of tax authorised to be deducted from the dividend by section 456.

(3) Subject to any adjustment which is required by section 363 (3) or by subsection (4) of this section, the rate of double taxation relief for the period for which the dividend is paid shall be taken to be—

(a) in the case of a dividend paid for a period which falls wholly within any year of assessment, the rate which is produced by dividing the double taxation relief for that year of assessment by a sum consisting of the total income of the company as computed for income tax purposes for that year reduced by the amount of any income the income tax upon which the company is entitled, otherwise than under section 456, to charge against any other person;

(b) in the case of a dividend paid for a period which falls partly within one year of assessment and partly within another year of assessment or other years of assessment, the rate which is produced by determining, in relation to each of those years,—

(i) the rate which would have been applicable if the dividend had been paid for a period falling wholly within that year, and

(ii) the portion of that rate which bears the same proportion to that rate as the part of the period for which the dividend is paid which falls within that year bears to the whole period,

and then aggregating the portions so determined.

(4) Where any matter affecting the calculation of the rate of double taxation relief has not been fully determined at the time when the reduced Irish rate falls to be determined in relation to any dividend, the rate of double taxation relief shall be estimated according to the best of the information available at the time, and, if it is subsequently found that the rate so estimated was excessive or deficient, the appropriate adjustment shall be made in determining the reduced Irish rate applicable to the next subsequent dividend on the occasion of which it is practicable to make the adjustment, and shall be made by reducing or, as the case may be, increasing the rate of double taxation relief, as calculated for the purposes of that subsequent dividend in accordance with the foregoing subsection, by a rate which bears the same proportion to the excess or deficiency in the rate applicable to the first-mentioned dividend as the total amount of the first-mentioned dividend bears to the total amount of that subsequent dividend.

(5) Where the double taxation relief for any year of assessment includes any credit which has been taken into account for the purposes of determining the reduced Irish rate applicable to any dividends received by the company, the amount of that credit shall be taken to be the sum of the amounts which are produced by applying to each such dividend the rate which represents the excess of the rate of tax authorised to be deducted from that dividend by section 456 over the reduced Irish rate applicable to that dividend.

(6) For the purposes of this section, a dividend which is not expressed to be paid for any specified period shall be deemed to be paid for the last period for which accounts of the company were made up which ended before the dividend became payable.

365 Relief for foreign income tax in certain cases.

365.—(1) Where an individual has paid under this Act by deduction or otherwise, or is liable under this Act to pay, income tax, or income tax and sur-tax, for any year of assessment in respect of any part of his income arising in a country to which this section applies and shows to the satisfaction of the Revenue Commissioners—

(a) that he has paid external income tax in the said country in respect of the said part of his income, and

(b) that he was, prior to the said year of assessment, resident in the said country to which this section applies for a continuous period of not less than ten years or for a number of discontinuous periods amounting in the aggregate to not less than ten years or, where the said part of his income arises in any one (hereinafter referred to as the particular country) of the countries coming under the description lastly set forth in subsection (3), that he was, prior to the said year of assessment, resident in any two or more, one of which is the particular country, of the countries coming under the said description for periods amounting in the aggregate to not less than ten years, and

(c) that for the said year of assessment he was or is domiciled, resident, and ordinarily resident in the State, and

(d) that, in respect of the said year of assessment, he is not entitled to claim relief from double taxation under Article 2 of the Agreement made 25th April, 1928, set forth in Schedule 6, Part I,

the Revenue Commissioners may grant to such individual in respect of the said year of assessment such relief as is in their opinion just, but not exceeding whichever of the following amounts is the lesser, that is to say, one-half of the amount of the individual's Irish income tax for the said year of assessment or the amount of external income tax paid or payable by him in the said country in respect of the said part of his income after deduction of any relief to which he may be entitled in that country.

(2) In subsection (1)—

“the amount of the individual's Irish income tax” means the amount of tax appropriate to the income of the individual referred to arising in a country to which this section applies, such tax being computed at a rate determined by dividing, by the amount of the total income from all sources of the said individual for the relevant year of assessment, the amount of income tax or income tax and sur-tax payable under this Act by the said individual for the said year of assessment in respect of his total income before the granting of any relief under this section;

“external income tax” means a tax which is chargeable and payable under the law of a country to which this section applies and appears to the Revenue Commissioners to correspond to income tax or sur-tax chargeable under this Act.

(3) This section applies to the following countries, that is to say, the United States of America, Canada, Australia, New Zealand, the Republic of South Africa and also to any other country to which the repealed enactments corresponding to this section would apply but for their repeal.

(4) Nothing contained in the foregoing provisions of this section shall authorise the granting of relief under this section to any individual in respect of any year of assessment to such an extent as would reduce the aggregate of the amount of income tax, sur-tax (if any), and external income tax (as defined in subsection (2)) payable by such individual in respect of any part of his income arising in a country to which this section applies (such aggregate being computed after deduction of any relief to which he may be entitled in the said country) below the amount of income tax and sur-tax (if any) which would be payable by such individual in respect of the said part of his income if that part of his income had arisen in the State.

366 Extension of relief in certain cases.

366.—Where as regards any person to whom the provisions of section 2 of the Finance Act, 1941, formerly applied—

(a) such person has income arising in a country outside the State and outside Northern Ireland and Great Britain in respect of which relief was formerly granted by virtue of those provisions, and

(b) the Revenue Commissioners are satisfied in relation to that income that the total tax, that is to say, Irish tax (including sur-tax) in respect of the income together with the corresponding tax of the said country, is in excess of what the said corresponding tax would have been if it had been computed on the basis that such person had been taxable as a person solely resident in the said country in respect of income arising from sources therein,

the Revenue Commissioners may grant a measure of relief not exceeding the amount of the excess.

PART XXIII Purchase and Sale of Securities

367 Application of Part XXIII.

367.—(1) Subject as hereinafter provided, this Part relates to cases of a purchase by a person (in this Part referred to as the first buyer) after the 22nd day of April, 1959, of any securities and their subsequent sale by him, the result of the transaction being that interest becoming payable in respect of the securities (in this Part referred to as the interest) is receivable by the first buyer.

(2) This Part does not relate to cases where—

(a) the time elapsing between the purchase by the first buyer and his taking steps to dispose of the securities exceeded six months, or

(b) that time exceeded one month and, in the opinion of the Revenue Commissioners, the purchase and sale were each effected at the current market price and the sale was not effected in pursuance of an agreement or arrangement made before or at the time of the purchase.

(3) An appeal shall lie to the Special Commissioners with respect to any opinion of the Revenue Commissioners under subsection (2) (b) in like manner as an appeal would lie against an assessment to income tax, and the provisions of this Act relating to appeals shall apply and have effect accordingly.

(4) The reference in subsection (2) to the first buyer taking steps to dispose of the securities shall be construed—

(a) if he sold them in the exercise of an option he had acquired, as a reference to his acquisition of the option,

(b) in any other case, as a reference to his selling them.

(5) For the purposes of this Part a sale of securities similar to, and of the like nominal amount as, securities previously bought (hereinafter referred to as the original securities) shall be equivalent to a sale of the original securities, and subsection (4) shall apply accordingly; and where the first buyer bought parcels of similar securities at different times, a subsequent sale of any of the securities shall so far as may be be related to the last to be bought of the parcels, and then to the last but one, and so on:

Provided that a person shall be under no greater liability to tax by virtue of this subsection than he would have been under if instead of selling the similar securities he had sold the original securities.

(6) Where, at the time when a trade is, or is deemed to be, set up and commenced, any securities form part of the trading stock belonging to the trade, those securities shall be treated for the purposes of this section as having been sold at that time in the open market by the person to whom they belonged immediately before that time and as having been purchased at that time in the open market by the person thereafter engaged in carrying on the trade; and subject to the foregoing provisions of this subsection, where there is a change in the persons engaged in carrying on a trade which is not a change on which the trade is deemed to be discontinued, the provisions of this section shall apply in relation to the person so engaged after the change as if anything done to or by his predecessor had been done to or by him.

(7) For the purposes of this Part—

(a) “interest” includes a dividend;

(b) “person” includes any body of persons, and references to a person entitled to any exemption from income tax include, in a case of an exemption expressed to apply to income of a trust or fund, references to the persons entitled to make claims for the granting of that exemption;

(c) “securities” includes stocks and shares;

(d) securities shall be deemed to be similar if they entitle their holders to the same rights against the same persons as to capital and interest and the same remedies for the enforcement of those rights, notwithstanding any difference in the total nominal amounts of the respective securities or in the form in which they are held or the manner in which they can be transferred.

368 Dealers in securities.

368.—(1) Subject to the provisions of this section, if the first buyer is engaged in carrying on a trade which consists of or comprises dealings in securities, then, in computing for any of the purposes of this Act the profits arising from or loss sustained in the trade, the price paid by him for the securities shall be reduced by the appropriate amount in respect of the interest, as determined in accordance with Schedule 11.

(2) Where, in the opinion of the Revenue Commissioners, the first buyer is bona fide carrying on the business of a discount house in the State, or where the first buyer is a member of a stock exchange in the State who is recognised by the committee of that stock exchange as carrying on the business of a dealer, subsection (1) shall not have effect in relation to securities bought in the ordinary course of his said business.

(3) Subsection (1) shall not apply if the interest is to any extent required to be brought into account under section 371 as if it were a trading receipt which had not borne tax or would to any extent be so required to be brought into account but for the provisions of paragraph 2 of Schedule 12.

369 Persons entitled to exemptions.

369.—(1) If the first buyer is entitled under any enactment to an exemption from income tax which, apart from this subsection, would extend to the interest, then, subject to the provisions of this section, the exemption shall not extend to an amount equal to the appropriate amount in respect of the interest, as determined in accordance with Schedule 11:

Provided that if the first buyer is entitled as aforesaid and any annual payment is payable by him out of the interest, the annual payment shall be deemed as to the whole thereof to be paid out of profits or gains not brought into charge to tax, and section 434 shall apply accordingly.

(2) This section shall not apply where the exemption arises from the residence of the first buyer in Northern Ireland or Great Britain.

370 Traders other than dealers in securities.

370.—(1) If the first buyer carries on a trade not falling within section 368 then, in ascertaining whether any, and, if so, what, repayment of tax is to be made to him under section 307 by reference to any loss sustained in the trade for the year of assessment his income for which includes the interest, there shall be left out of account—

(a) the appropriate amount in respect of the interest, as determined in accordance with Schedule 11, and

(b) any tax paid on that amount.

(2) Where the first buyer is a company and carries on a trade not falling within section 368 or a business consisting mainly in the making of investments then, if any annual payment payable by the company is to any extent payable out of the interest, that annual payment shall be deemed to that extent not to be payable out of profits or gains brought into charge to tax, and section 434 shall apply accordingly.

(3) In this section “company” includes any body corporate.

PART XXIV Purchases of Shares by Financial Concerns and Persons Exempted from tax and Restriction on Relief for Losses by Repayment of Tax in Case of Dividends Paid Out of Accumulated Profits

371 Purchases of shares by financial concerns and persons exempted from tax.

371.—(1) Where a person engaged in carrying on a trade which consists of or comprises dealings in shares or other investments becomes entitled to receive a dividend on a holding of shares of a class to which this section applies, being shares sold or issued to him or otherwise acquired by him not more than six years before the date on which the dividend becomes payable, and the dividend is to any extent paid out of profits accumulated before the date on which the shares were so acquired, then, if those shares, or those shares together with—

(a) any other shares the dividend on which is payable to that person and which were sold or issued to him or otherwise acquired by him not more than six years before the date on which the dividend becomes payable, and

(b) in a case where the trade is under the same control as another trade which consists of or comprises dealings in shares or other investments, any shares the dividend on which is payable to the person engaged in carrying on that other trade and which were sold or issued to him or otherwise acquired by him not more than six years before the date on which the dividend becomes payable, and

(c) any such shares as are to be brought into account under subsection (3),

amount to 10 per cent. or more of the issued shares of that class, the net amount of the dividend received on the shares in the holding shall, to the said extent to which it was paid out of profits accumulated before the shares were acquired, be brought into account in computing for the purposes of this Act the profits or gains or losses of the trade as if it were a trading receipt which had not borne tax.

(2) Where a person entitled under this Act to an exemption from income tax which extends to dividends on shares becomes entitled to receive a dividend on a holding of shares of a class to which this section applies, being shares sold or issued to him or otherwise acquired by him not more than six years before the date on which the dividend becomes payable, and the dividend is to any extent paid out of the profits accumulated before the date on which the shares were so acquired, then, if those shares, or those shares together with—

(a) any other shares the dividend on which is payable to that person and which were sold or issued to him or otherwise acquired by him not more than six years before the date on which the dividend becomes payable, and

(b) any such shares as are to be brought into account under subsection (3),

amount to 10 per cent. or more of the issued shares of that class, the exemption shall, to an extent proportionate to the said extent to which the dividend is paid out of profits accumulated before the date on which the shares were acquired, not apply to the dividend:

Provided that if any annual payment is payable by that person out of the dividend, that annual payment shall be deemed as to the whole thereof to be paid out of profits or gains not brought into charge to tax and section 434 shall apply accordingly.

(3) If two or more persons, being persons engaged in carrying on trades of the kind mentioned in subsection (1) or entitled to an exemption of the kind mentioned in subsection (2), have each acquired shares in a company and the transactions in pursuance of which the acquisition was made were either transactions entered into by those persons acting in concert or transactions together comprised in any arrangements made by any person, then, in the application of either of those subsections in relation to a dividend payable to one of those persons on shares which include shares so acquired (or shares acquired in right of those shares), there shall be taken into account under subsection (1) (c), or, as the case may be, subsection (2) (b) any shares the dividend on which is payable to any other of those persons, being shares so acquired by that other person (or shares acquired in right of those shares).

(4) Where any shares have been sold or otherwise disposed of by a person who held shares of that kind acquired at different times it shall be assumed for the purposes of this section that shares which have been held for a longer time have been disposed of before shares which have been held for a shorter time.

(5) Where, at the time when a trade is, or is deemed to be, set up and commenced, any shares form part of the trading stock belonging to the trade, those shares shall be regarded for the purposes of this section as having been acquired at that time by the person then engaged in carrying on the trade; and, subject to the foregoing provisions of this subsection, where there is a change in the persons engaged in carrying on a trade which is not a change on which the trade is deemed to be discontinued, the provisions of this section shall apply in relation to the person so engaged after the change as if anything done to or by his predecessor had been done to or by him.

(6) The provisions of Schedule 12 shall have effect for the purpose of ascertaining whether a dividend is to be regarded as paid to any extent out of profits accumulated before a given date.

(7) For the purposes of this section and Schedule 12—

(a) “company” includes any body corporate, but does not extend to a company not resident in the State;

(b) “person” includes any body of persons, and references to a person entitled to any exemption from income tax include, in a case of an exemption expressed to apply to income of a trust or fund, references to the persons entitled to make claims for the granting of that exemption;

(c) “shares of a class to which this section applies” means shares of any class forming part of a company's share capital other than a class of fully-paid preference shares carrying only a right to dividends at a rate per cent. of the nominal value of the shares which is fixed or fluctuates only in accordance with the rate of income tax and which in the opinion of the Special Commissioners does not substantially exceed the yield generally obtainable on preference shares the prices of which are quoted on stock exchanges in the State;

(d) “share” includes stock other than debenture or loan stock;

(e) shares shall be regarded as of different classes if the rights and obligations respectively attached to them are as regards the payment of dividends or the amount paid up or in any other respect distinguishable;

(f) any reference to shares acquired in right of other shares includes a reference to shares acquired in pursuance of an offer or invitation which was restricted to holders of those other shares;

(g) two trades shall be regarded as under the same control if they are carried on by persons one of whom is a body of persons over whom the other has control (within the meaning assigned to that expression by subsection (8)), or both of whom are bodies of persons under the control (as so defined) of a third person, and several trades shall be regarded as under the same control if each is under the same control as all of the others,

and in paragraph (g) “body of persons” includes a partnership.

(8) For the purposes of subsection (7) (g), the following shall be taken to be the meaning assigned to “control” by this subsection:

“control”, in relation to a body corporate, means the power of a person to secure, by means of the holding of shares or the possession of voting power in or in relation to that or any other body corporate, or by virtue of any powers conferred by the articles of association or other document regulating that or any other body corporate, that the affairs of the first-mentioned body corporate are conducted in accordance with the wishes of that person, and, in relation to a partnership, means the right to a share of more than one-half of the assets, or of more than one-half of the income, of the partnership.

372 Restriction on relief for losses by repayment of tax in case of dividends paid out of accumulated profits.

372.—(1) Where a person carries on a trade other than such a trade as is mentioned in section 371 (1) and his income for any year of assessment includes a dividend the net amount of which would, if the trade were such a trade as is mentioned in section 371 (1), be required to any extent to be brought into account as a trading receipt which has not borne tax, then, in ascertaining whether any or what repayment of tax is to be made to that person under section 307 by reference to any loss sustained in the trade for the said year of assessment, there shall be left out of account—

(a) the gross amount corresponding to so much of the said net amount as would have been required to be brought into account as aforesaid, and

(b) any tax paid on the amount required to be left out of account under paragraph (a).

(2) For the purposes of this section “person” includes any body of persons.

PART XXV Temporary Relief from Taxation

Chapter I Profits from Trading Within Shannon Airport

373 Definitions.

373.—In this Chapter—

“the airport” has the same meaning as in the Customs-free Airport Act, 1947;

“company” means any body corporate carrying on a trade;

“the Minister” means the Minister for Finance.

374 Exempted trading operations.

374.—(1) In this section “qualified company” means a company the whole or part of the trade of which is carried on within the airport.

(2) Subject to subsections (5) and (6), the Minister may give a certificate certifying that such trading operations of a qualified company as are specified in the certificate are, with effect as from their commencement, exempted trading operations for the purposes of this Chapter, and any certificate so given shall, unless it is revoked under subsection (4), remain in force until the expiration of the period of twenty-five years from the 25th day of November, 1958.

(3) A certificate under subsection (2) may be given either without conditions or subject to such conditions as the Minister considers proper and specifies therein.

(4) Where, in the case of a company in relation to which a certificate under subsection (2) has been given—

(a) the trade of the company ceases or becomes carried on wholly outside the airport, or

(b) the Minister is satisfied that the company has failed to comply with any condition subject to which the certificate was given,

the Minister may, by notice in writing served by registered post on the company, revoke the certificate.

(5) The Minister shall not certify, under subsection (2), that a trading operation is an exempted trading operation unless it falls within one or more of the following classes of trading operations:

(a) the sale of goods exported, or to be exported, out of the State by the qualified company (whether acting as principal or agent), being goods which have been produced, manufactured or processed within the airport by the qualified company,

(b) the sale of goods exported, or to be exported, out of the State by the qualified company, being goods which have been imported into the State and which have been packaged or handled within the airport by the qualified company,

(c) the repair or maintenance, within the airport, of aircraft,

(d) the rendering, within the airport or outside the State, of services entailing the use of aircraft or air transport,

(e) other trading operations in regard to which the Minister is of opinion, after consultation with the Minister for Transport and Power, that they contribute to the use or development of the airport,

(f) trading operations which are ancillary to any of those described in the foregoing paragraphs of this subsection.

(6) The Minister shall not certify, under subsection (2), that any of the following trading operations is an exempted trading operation:

(a) the sale of goods brought, or to be brought, from the airport into any other part of the State otherwise than in the course of being exported out of the State,

(b) the rendering, to persons resident in the State outside the airport, of services,

(c) the production or manufacture of goods outside the airport,

(d) the operation of an air transport service other than an air transport service which—

(i) is operated between the airport and a place outside the State, and

(ii) is not so operated under an international bilateral agreement to which the Government is a party,

(e) the rendering within the State of—

(i) services to embarking or disembarking aircraft passengers, including hotel, catering, money changing or transport (other than air transport) services, or

(ii) services in connection with the landing, departure, loading or unloading of aircraft,

(f) the sale of goods by retail,

(g) the sale of consumable goods for the fuelling of aircraft or for shipment as aircraft stores,

(h) a trading operation carried on in the course of trading in Northern Ireland or Great Britain.

375 Disregard of profits or losses in the case of exempted trading operations.

375.—(1) Profits or gains arising from, or losses sustained in, exempted trading operations shall not be taken into account for any purpose of this Act in relation to the company by which such operations are carried on.

(2) Where the trade carried on by a company consists partly of exempted trading operations and partly of other trading operations, the amount of the profits or gains arising from, or of the loss sustained in, such other trading operations shall, for any purpose of this Act, be computed as it would have been computed for that purpose if the company were carrying on two distinct trades consisting respectively of the exempted trading operations and of the other trading operations.

376 Transactions between associated persons.

376.—(1) Where, in the course of exempted trading operations, the company carrying on the operations (hereafter in this subsection referred to as the buyer) buys goods from another person (hereafter in this subsection referred to as the seller) and—

(a) the seller has control over the buyer or, the seller being a body corporate or partnership, the buyer has control over the seller or some other person has control over both the seller and the buyer, and

(b) the goods are sold at a price less than the price which they might have been expected to fetch if the parties to the transaction had been independent parties dealing at arm's length,

then, a computation of the profits or gains or losses of the seller, for any purpose of this Act, shall be made as if the goods had been sold for the price which they would have fetched if the transaction had been a transaction between independent persons dealing as aforesaid.

(2) In this section “control” has the meaning assigned to it by section 299 (6).

377 Delivery of statements, etc.

377.—Where the Minister has given a certificate under section 374—

(a) the provisions of this Act relating to the delivery of statements or returns of profits or gains shall continue to have effect in relation to the company concerned as if the certificate had not been given, and

(b) the Revenue Commissioners may by notice in writing require the company concerned 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 Chapter.

378 Exemption from Chapter IV.

378.—Notwithstanding anything in Chapter IV of this Part no amount receivable from the sale of goods exported out of the State in the course of exempted trading operations shall be taken into account for any purpose of the said Chapter IV.

379 Reduction of certain deductions.

379.—(1) Where the trade carried on by a company consists partly of exempted trading operations and partly of other trading operations, the amount of any deduction, being a deduction to which this section applies, to which, but for this section, the company would have been entitled shall be reduced by such amount, if any, as the Special Commissioners consider just having regard to section 375.

(2) The deductions to which this section applies are deductions in respect of any allowance under sections 241, 244 (3), Chapter III of Part XIV, or Part XV or any annual allowances under Chapter 1, III or IV of Part XVI.

380 Dividends.

380.—(1) Where a dividend is paid in part out of profits from exempted trading operations and in part out of other profits, sections 456 and 457 shall apply as if the dividend consisted of two dividends respectively paid out of profits from exempted trading operations and out of other profits.

(2) So much of any dividend as has been paid out of profits from exempted trading operations shall not be regarded as income or profits for any purpose of this Act.

(3) In relation to every warrant, cheque or order drawn or made by a company for the payment of a dividend payable wholly or in part out of profits from exempted trading operations, section 458 shall apply to the company so that the statement required by that section shall show, in addition to the particulars required to be given apart from this section, either (as the case may require)—

(a) that the whole of the sum for which the warrant, cheque or order is drawn or made is a payment of a dividend of profits from exempted trading operations, or

(b) that a part of such sum is a payment out of profits from exempted trading operations and 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 other profits.

381 Provision for annual payments and patent royalties.

381.—(1) Where any payment to which this section applies is payable out of the profits or gains of a trade consisting partly of exempted trading operations and partly of other trading operations, there shall be treated as paid out of profits or gains brought into charge to tax only the portion of the payment which bears to the total amount thereof the same proportion as the amount of the profits or gains of the trade actually charged to tax bears to the amount of such profits or gains which would have been actually charged to tax if this Chapter had not been enacted.

(2) This section applies to any payment of interest of money, annuity, or other annual payment charged with tax under Schedule D, or of any royalty or other sum paid in respect of the user of a patent.

Chapter II Profits of Certain Mines

382 Interpretation.

382.—(1) In this Chapter—

“mining operations” means 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 scheduled minerals have been or are obtained thereby;

“new mining operations” means mining operations which—

(a) at no time in the period of one year ending on the 5th day of April, 1956, have resulted in the production of scheduled minerals, 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 Schedule 13 occurring in non-bedded deposits of such minerals.

(2) As respects any opinion of the Revenue Commissioners under subsection (1), 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 this Act 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 Schedule 13.

(4) Every order made under subsection (3) 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.

383 Application of this Chapter.

383.—This Chapter applies to the profits (hereafter in this Chapter referred to as the profits) of a company (hereafter in this Chapter 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 (hereafter in this Chapter referred to as the mine) in relation to which the company commences to trade on a day (hereafter in this Chapter referred to as the commencement day) within the period of twenty years beginning on the 6th day of April, 1956.

384 Computation of profits.

384.—In computing the amount of the profits for the purpose of assessment to income tax the working of the mine shall be treated as a separate trade set up or commenced on the commencement day and any corporation profits tax which, by virtue of section 6 of the Finance (Profits of Certain Mines) (Temporary Relief from Taxation) Act, 1956, is not payable, shall be deemed to have been paid.

385 Computation of net income tax.

385.—(1) Subject to subsection (2), a reference in this Chapter 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 section 456, 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 property 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 property 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 property is subject.

386 Relief from tax.

386.—(1) The net income tax, for the year of assessment within which falls the commencement day (hereafter in this Chapter 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 hereafter in this Chapter 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 (hereafter in this Chapter 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) 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 paragraph (a) (ii) 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 hereafter in this Chapter 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 (hereafter in this Chapter 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) 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 paragraph (a) (ii) 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 385, shall, notwithstanding anything contained in the foregoing subsections of this section, be payable in full.

387 Dividends.

387.—(1) (a) For the purposes of this section, section 458 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 hereafter in this section referred to as the relevant payment.

(b) The said statement shall also show the period (hereafter 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 subsection (2) (a), 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 subsection (2) (b), 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 subsection (2) (b), 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 subsection (2) (b), 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 a period (hereafter in this Chapter referred to as the first term) of forty-eight months beginning on the commencement day, the company shall be entitled to deduct income tax in accordance with section 456 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 section 456 provided, however, that—

(i) where the dividend period is wholly within a period (hereafter in this Chapter referred to as the second term) of forty-eight months beginning on the day next following the last day of the first term, the amount of the income tax which the company would otherwise be entitled to deduct from the relevant payment under section 456 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 section 456 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 this Act 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 this Act—

(I) no relief or repayment in respect of the income tax, which in accordance with subsection (2) (b) 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 subsection (2) (b), 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.

388 Repayments.

388.—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 385, 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 Chapter, 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.

389 General restriction.

389.—This Chapter 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 387 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.

390 Furnishing of information.

390.—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 Chapter.

391 Application of section 387 to certain dividends.

391.—(1) In this section “company” means a company which has obtained relief under section 11 of the Finance (Profits of Certain Mines) (Temporary Relief from Taxation) Act, 1956, in respect of profits derived from the working of an existing mine (as defined in the said section 11).