Corporation Tax Act , 1976

Type Act

Publication 1976-03-31

State In force

Source Irish Statute Book

articles 188

(4) For the purposes of this section, profits or gains shall not be treated as falling to be taken into account as a trading receipt by reason only that they are included in the computation required by section 15 or 33 (2) of the Corporation Tax Act, 1976.

48.

Section 74 of the Finance Act, 1974, shall have effect for corporation tax as for income tax, and references to the Income Tax Acts, to years of assessment and to a deduction in charging the profits of a trade shall have effect accordingly as if they were or included references to the Corporation Tax Acts, to accounting periods and to a deduction made in computing the trading income for corporation tax.

49.

Part I of the Second Schedule to the Finance Act, 1975, shall have effect for corporation tax as for income tax and shall have effect accordingly as if—

(1) references to years of assessment and to tax were or included references to accounting periods and to corporation tax, and

(2) the following paragraph were substituted for paragraph 2—

“2. So far as relates to relief under subsection (5) or (6) of section 81 of the Income Tax Act, 1967, or section 16 or 19 of the Corporation Tax Act, 1976, or to the computation of profits or gains or losses of a trade or profession for a company's accounting period ending after the 5th day of April, 1975, section 19, paragraphs (b) and (c) of section 20 and sections 21 and 22 shall be deemed to have had effect as from the passing of the Finance Act, 1963, and as respects leases granted at any time.”.

50.

The amendments in this Part of this Schedule shall not affect the liability to income tax for years of assessment ending on or before the 5th day of April, 1976, or the liability to corporation profits tax for accounting periods ending on or before that date, or the assessment, collection or recovery of either of those taxes or of interest thereon or other proceedings relating to those taxes or that interest.

PART II Application and Adaptation of Capital Gains Tax Act, 1975

In section 2 (1), for the definitions of “controlled company” and “control” there shall be substituted—

“‘close company’ has the meaning assigned to it by section 94 of the Corporation Tax Act, 1976, and ‘control’ has the meaning assigned to it by section 102 of that Act”.

In section 33 (7) (b), for “controlled”, in each place where it occurs, there shall be substituted “close” and the said section 33 (7) (b), as so amended, is set out in the Table to this paragraph.

TABLE

(b) a person, in his capacity as trustee of a settlement, is connected with any individual who in relation to the settlement is a settlor, with any person who is connected with such an individual and with a body corporate which is deemed to be connected with that settlement, and a body corporate shall be deemed to be connected with a settlement in any year if at any time in the year it is a close company (or only not a close company because it is not resident in the State) and the shareholders then include the trustees of or a beneficiary under the settlement;

In section 35—

(1) in subsections (1), (3) and (5), for “controlled”, in each place where it occurs, there shall be substituted “close” and the said subsections (1), (3) and (5), as so amended, are set out in the Table to this paragraph, and

(2) subsection (4) shall be deleted.

TABLE

(1) If on or after the 6th day of April, 1974, a company which is a close company transfers an asset to any person otherwise than by way of a bargain made at arm's length and for a consideration of an amount or value less than the market value of the asset, an amount equal to the difference shall be apportioned among the issued shares of the company, and the holders of those shares shall be treated in accordance with the following provisions of this section.

(3) If the person owning any of the said shares at the date of transfer is itself a close company, an amount equal to the amount apportioned to the shares so owned under subsection (1) to that close company shall be apportioned among the issued shares of that close company, and the holders of those shares shall be treated in accordance with subsection (2), and so on through any number of close companies.

(5) This section shall apply to a company falling within section 36 as it applies to a close company.

In section 36 (1) (8), for “controlled”, in each place where it occurs, there shall be substituted “close” and the said section 36 (1) (8), as so amended, is set out in the Table to this paragraph.

TABLE

(1) This section applies as respects chargeable gains accruing to a company—

(a) which is not resident in the State, and

(b) which would be a close company if it were resident in the State.

(8) If the person owning any of the shares in the company at the time when the chargeable gain accrues to the company is itself a company which is not resident in the State but which would be a close company if it were resident in the State, an amount equal to the amount apportioned under subsection (3) out of the chargeable gain to the shares so owned shall be apportioned among the issued shares of the second-mentioned company, and the holders of those shares shall be treated in accordance with subsection (2), and so on through any number of companies.

For section 36 (4) (d) there shall be substituted—

“(d) a chargeable gain in respect of which the company is chargeable to tax by virtue of subsection (2) or (7) of section 4 (charge to tax on non-residents) or to corporation tax by virtue of section 8 (2) (b) of the Corporation Tax Act, 1976 (companies not resident in the State).”.

Section 44 shall have effect for purposes of corporation tax as it has effect for purposes of capital gains tax.

Section 49 (6) shall have effect for purposes of corporation tax as it has effect for purposes of capital gains tax.

In paragraph 2 (1) of Schedule 1, for “section 214 of the Income Tax Act, 1967” there shall be substituted “section 33 of the Corporation Tax Act, 1976” and the said paragraph 2 (1), as so amended, is set out in the Table to this paragraph.

TABLE

(1) There shall be excluded from the consideration for a disposal of assets taken into account in the computation under this Schedule of the gain accruing on that disposal any money or money's worth charged to income tax as income of, or taken into account as a receipt in computing income, profits, gains or losses for the purposes of the Income Tax Acts of, the person making the disposal:

Provided that the exclusion from consideration under this subparagraph shall not be taken as applying to a computation in accordance with the provisions of Case I of Schedule D for the purpose of restricting relief in respect of expenses of management under section 33 of the Corporation Tax Act, 1976.

For paragraph 3 (3) (a) (ii) (iii) of Schedule 1 there shall be substituted—

“(ii) that expenditure was defrayed out of borrowed money,

(iii) the company charged to capital all or any part of the interest on that borrowed money referable to a period ending on or before the disposal, and

(iv) the company is chargeable to capital gains tax in respect of the gain,”.

10.

In paragraph 22 (1) (a) of Schedule 1, for “controlled”, in each place where it occurs, there shall be substituted “close” and the said paragraph 22 (1) (a), as so amended, is set out in the Table to this paragraph.

TABLE

(a) at any time, including a time before the 6th day of April, 1974, any of the persons having control of a close company, or any person who (in the terms of section 33) is connected with a person having control of a close company, has transferred assets to the company, and

11.

Paragraph 3 (4) of Schedule 3 shall have effect for purposes of corporation tax as it has effect for purposes of capital gains tax.

12.

Paragraph 11 (6) of Schedule 4 shall have effect for corporation tax as for capital gains tax and references to capital gains tax shall have effect accordingly as if they were or included references to corporation tax.

13.

The amendments in this Part of this Schedule shall not affect the liability to capital gains tax for years of assessment ending on or before the 5th day of April, 1976, or the assessment, collection or recovery of that tax or of interest thereon or other proceedings relating to that tax or interest.

THIRD SCHEDULE Enactments Repealed PART I Income Tax

Number and Year	Short Title	Extent of Repeal
(1)	(2)	(3)
No. 6 of 1967	Income Tax Act, 1967.	In section 1 (1), the definitions of “annuity fund”, “foreign life assurance fund” and “life assurance business”.
		Section 64.
		In section 75 (2), the words “(i) income or profits chargeable under section 215,”.
		In section 76 (2), the word “or” at the end of paragraph (a); paragraph (b).
		Section 76 (7) and (8).
		Section 108.
		Part X.
		Section 219 (2).
		Section 220 (6).
		Section 221.
		Section 237.
		In section 316 (2), the words “221 (2) (b),” and “363, or 435”.
		Chapter III of Part XIX.
		Section 347.
		In section 371 (7) (c), the words “or fluctuates only in accordance with the rate of income tax”.
		Part XXV.
		In section 432 (3) (a), the words “or paragraph 2 of Schedule 16”.
		Section 435.
		Chapter I of Part XXX.
		Chapter II of Part XXXVI.
		In section 543, the words “(a) the assessment, charge, collection and recovery of tax under section 530 or (b)”.
		Schedule 16.
No. 21 of 1969	Finance Act, 1969.	Section 20.
No. 19 of 1972	Finance Act, 1972.	In section 16 (4), the words “and of the provisions of section 214 of the Income Tax Act, 1967, relating to expenses of management” and the words “or expense of management”.
No. 19 of 1973	Finance Act, 1973.	Section 11.
		Section 24 (2).
		In section 24 (8), the words “and (2)”.
		In section 26, the words “or (c) to be taken into account for the purposes of a management expenses claim under section 214 of the Income Tax Act, 1967,”.
No. 17 of 1974	Finance (Taxation of Profits of Certain Mines) Act, 1974.	Sections 13, 14, 15 and 16.
No. 27 of 1974	Finance Act, 1974.	The proviso to section 4.
		In section 5 (1), the words “, or that there may be deducted from any dividend the tax appropriate thereto”. The proviso to section 5 (1).
		Section 23.
		Section 54 (4).
No. 6 of 1975	Finance Act, 1975.	Sections 5, 18 and 30.

The repeals in this Part of this Schedule shall not affect the liability to income tax for years of assessment ending on or before the 5th day of April, 1976, or the assessment, collection or recovery of that tax or of interest thereon or other proceedings relating to that tax or interest.

PART II

Corporation Profits Tax

Number and Year	Short Title	Extent of Repeal
(1)	(2)	(3)
10 and 11 Geo. V, c. 18	Finance Act, 1920.	Part V.
11 and 12 Geo. V, c. 32	Finance Act, 1921.	Sections 55 and 57.
12 and 13 Geo. V, c. 17	Finance Act, 1922.	Section 43
No. 20 of 1932	Finance Act, 1932.	Section 47.
No. 14 of 1941	Finance Act, 1941.	Sections 34, 36 (4) and 45 (2).
No. 18 of 1944	Finance Act, 1944.	Sections 11, 12 and 15.
No. 15 of 1946	Finance Act, 1946.	Section 24.
No. 13 of 1949	Finance Act, 1949.	Paragraph 3 of Part II of the Fifth Schedule.
No. 21 of 1953	Finance Act, 1953.	Part IV so far as it is unrepealed.
No. 8 of 1956	Finance (Profits of Certain Mines) (Temporary Relief from Taxation) Act, 1956.	Sections 11 and 12 so far as they are unrepealed.
No. 47 of 1956	Finance (Miscellaneous Provisions) Act, 1956.	Section 2.
		Parts II and III so far as they are unrepealed.
		Section 20.
No. 20 of 1957	Finance Act, 1957.	Section 22.
No. 25 of 1958	Finance Act, 1958.	Section 45.
		Parts VIII and IX and the Third Schedule so far as they are unrepealed
No. 28 of 1958	Finance (Miscellaneous Provisions) Act, 1958.	Part II so far as it is unrepealed.
No. 18 of 1959	Finance Act, 1959.	Parts V and VI so far as they are unrepealed.
No. 19 of 1960	Finance Act, 1960.	Part IV so far as it is unrepealed.
No. 15 of 1962	Finance Act, 1962.	Sections 12, 13 and 14 so far as they are unrepealed.
No. 23 of 1963	Finance Act, 1963.	Section 38.
		Parts VII and VIII and section 98 so far as they are unrepealed.
		Fourth Schedule.
No. 15 of 1964	Finance Act, 1964.	Part V.
		Sections 30 and 31 so far as they are unrepealed.
No. 22 of 1965	Finance Act, 1965.	Sections 33 and 35.
		Sections 64 and 65 so far as they are unrepealed.
No. 6 of 1967	Income Tax Act, 1967.	Section 1 (5).
		In section 555 (1) (e), the words “or, in relation to corporation profits tax, accounting periods ending before the 6th day of April, 1967,” and the words “or accounting period”.
		In section 556, the words “or corporation profits tax”.
		In section 559 (1), the words “and corporation profits tax”.
No. 17 of 1967	Finance Act, 1967.	Section 21.
No. 7 of 1968	Finance (Miscellaneous Provisions) Act, 1968.	Sections 13 and 15.
No. 33 of 1968	Finance Act, 1968.	Part IV.
		Section 48 (4).
No. 21 of 1969	Finance Act, 1969.	Part VI.
		In section 63, the words “and corporation profits tax”.
No. 14 of 1970	Finance Act, 1970.	In section 21 (5), the words “or of Part V of the Finance Act, 1920, as amended or extended by subsequent enactments”.
		In section 21 (6), the words “or accounting period” in each place where they occur.
		Section 24 (2) (b).
No. 23 of 1971	Finance Act, 1971.	Sections 46, 49 and 50.
No. 19 of 1972	Finance Act, 1972.	Section 43 so far as it relates to corporation profits tax.
No. 19 of 1973	Finance Act, 1973.	In section 30 (4) (a), the words “(including assessments and adjustments of assessments to corporation profits tax)”.
		In section 33 (1) (d), the words “or corporation profits tax, as appropriate, and ‘for tax purposes’ means for purposes of any of the said taxes”.
		In section 33 (6), the words “and for the purposes of corporation profits tax as respects any profits arising on or after the 1st day of April, 1973”.
		In section 34 (2), the words “, and of the enactments relating to corporation profits tax”.
		In section 35, the words “or of the enactments relating to corporation profits tax”.
		Section 37.
		In section 98 (2), the words “and (so far as relating to corporation profits tax) shall be construed together with Part V of the Finance Act, 1920, and the enactments amending or extending that Part”.
		In paragraph 7 of the Third Schedule, the words “or the enactments relating to corporation profits tax”.
No. 17 of 1974	Finance (Taxation of Profits of Certain Mines) Act, 1974.	In section 10 (1), the words “and the Acts relating to corporation profits tax”.
		In section 10 (2), the words “or any particular accounting period”.
		In section 10 (3), the words “or accounting period” and the words “and as a deduction in computing the profits of the said trade for purposes of corporation profits tax for that accounting period”.
		Sections 12 and 17.
No. 27 of 1974	Finance Act, 1974.	Section 27 (7).
		In section 41 (2), the words “and of the enactments relating to corporation profits tax”.
		Section 53.
		Section 56 (3) (a).
		In section 74 (1), the words “‘the Acts relating to corporation profits tax’ means Part V of the Finance Act, 1920, and the enactments amending or extending that Part;” and the words “and the Acts relating to corporation profits tax”.
		In section 74 (2), the words “or any particular accounting period”.
		In section 74 (3), the words “or accounting period”, the words “and as a deduction in computing the profits of the said trade for purposes of corporation profits tax for that accounting period” and the words “or amounts”.
No. 6 of 1975	Finance Act, 1975.	Section 21 (8).
		In section 28 (1), the words “(a) section 14 of the Finance Act, 1962,”, and the words “and 50 (2)”.
		In section 28 (3), the words “, corporation profits tax”.
		In paragraph 2 of the Second Schedule, the words “or section 25 of the Finance Act, 1964,” and the words “or (b) for a company's accounting period ending after the 5th day of April, 1975, for the purposes of corporation profits tax,”.
		In paragraph 3 of the Second Schedule, the words “and accounting periods” and the words “or a company's accounting period ending on or before the 5th day of April, 1975”.

The repeals in this Part of this Schedule shall not affect the liability to corporation profits tax for accounting periods ending on or before the 5th day of April, 1976, or the assessment, collection or recovery of that tax or of interest thereon or other proceedings relating to that tax or interest.

PART III

Income Tax and Corporation Profits Tax

Number and Year	Short Title	Extent of Repeal
(1)	(2)	(3)
No. 33 of 1968	Finance Act, 1968.	Sections 34 and 36.
No. 19 of 1973	Finance Act, 1973.	Section 39.
No. 27 of 1974	Finance Act, 1974.	Section 68.

The repeals in this Part of this Schedule shall not affect the liability to income tax for years of assessment ending on or before the 5th day of April, 1976, or the liability to corporation profits tax for accounting periods ending on or before that date, or the assessment, collection or recovery of either of those taxes or of interest thereon or other proceedings relating to those taxes or that interest.

FOURTH SCHEDULE

PART I Amendment of Enactments concerning Double Taxation Relief

Number and Year	Short Title	Amendment
(1)	(2)	(3)
No. 6 of 1967	Income Tax Act, 1967.	In section 355, there shall be added the following subsection—
		“(5) Nothing in this section or in Schedule 6, Part II, applies for the purposes of corporation tax.”.
		In section 361 (1), for “corporation profits tax” there shall be substituted “corporation tax”, and the said section 361 (1), as so amended, is set out in the following Table.
		TABLE
		(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 or corporation 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.
		In paragraph 1 (1) of Schedule 10, the definition of “income” shall be deleted and in the definition of “the Irish taxes” for “corporation profits tax” there shall be substituted “corporation tax”, and the said paragraph 1 (1), as so amended, is set out in the following Table.
		TABLE
		(1) In this Schedule, except where the context otherwise requires—
		“arrangements” means arrangements for the time being in force by virtue of section 361, or of section 12 of the Finance Act, 1950, or of section 14 of the Finance Act, 1955;
		“the Irish taxes” means income tax and corporation tax;
		“foreign tax” means, in relation to any territory in regard to which arrangements have the force of law, any tax chargeable under the laws of that territory for which credit may be allowed under the arrangements.
		In paragraph 2 of Schedule 10, the following subparagraph shall be substituted for subparagraph (2)—
		“(2) In the case of any income within the charge to corporation tax, the credit shall be applied in reducing the corporation tax chargeable in respect thereof.”.
		In paragraph 3 (2) of Schedule 10, after “income tax for any year of assessment”, there shall be inserted “or corporation tax for any accounting period”; and after “that year” there shall be inserted “or accounting period”, and the said paragraph 3 (2), as so amended, is set out in the following Table.
		TABLE
		(2) Credit shall not be allowed against income tax for any year of assessment or corporation tax for any accounting period unless the person in respect of whose income the tax is chargeable is resident in the State for that year or accounting period.
		In paragraph 4 of Schedule 10, for “corporation profits tax” there shall be substituted “corporation tax”, and the said paragraph 4, as so amended, is set out in the following Table.
		TABLE
		4. The amount of the credit to be allowed against corporation tax for foreign tax in respect of any income shall not exceed the corporation tax attributable to that income.
		In paragraph 5 (3) of Schedule 10, for “or section 35 of the Finance Act, 1968” there shall be substituted “or section 163 of the Corporation Tax Act, 1976”, and the said paragraph 5 (3), as so amended, is set out in the following Table.
		TABLE
		(3) Where credit for foreign tax falls to be allowed in respect of any income and any relief would, but for the provisions of this subparagraph, fall to be allowed in respect of that income under section 365 or section 163 of the Corporation Tax Act, 1976, the said relief shall not be allowed.
		In paragraph 8 (1) of Schedule 10, after “purposes of income tax”, there shall be inserted “or corporation tax”, and the said paragraph 8 (1), as so amended, is set out in the following Table.
		TABLE
		(1) Where credit for foreign tax falls to be allowed against any of the Irish taxes in respect of any income, the following provisions of this paragraph shall have effect as respects the computation, for the purposes of income tax or corporation tax, of the amount of that income.
		In paragraph 8 (2) of Schedule 10, after “where the income tax”, there shall be inserted “or corporation tax”; and after “against income tax” there shall be inserted “or corporation tax, as the case may be”, and the said paragraph 8 (2), as so amended, is set out in the following Table.
		TABLE
		(2) Where the income tax or corporation tax payable depends on the amount received in the State, the said amount shall be treated as increased by the amount of the credit allowable against income tax or corporation tax, as the case may be.
		In paragraph 12 of Schedule 10, for “corporation profits tax” there shall be substituted “corporation tax”, and the said paragraph 12, as so amended, is set out in the following Table
		TABLE
		12. Where, under the arrangements, relief may be given either in the State or in the territory in regard to which the arrangements are made in respect of any income and it appears that the assessment to income tax or to corporation tax made in respect of the income is not made in respect of the full amount thereof or is incorrect having regard to the credit, if any, which falls to be given under the arrangements, any such additional assessments may be made as are necessary to ensure that the total amount of the income is assessed and the proper credit, if any, is given in respect thereof, and where the income is entrusted to any person in the State for payment, any such additional assessment to income tax may be made on the recipient of the income under Case IV of Schedule D.
		In paragraph 13 (1) of Schedule 10, after “relevant year of assessment”, there shall be inserted “or the relevant accounting period”, and the said paragraph 13 (1), as so amended, is set out in the following Table.
		TABLE
		(1) Subject to paragraph 14, any claim for an allowance by way of credit for foreign tax in respect of any income shall be made in writing to the inspector not later than six years from the end of the relevant year of assessment or the relevant accounting period, and, if the inspector objects to any such claim, it shall be heard and determined by the Appeal Commissioners as if it were an appeal to them against an assessment to income tax and the provisions of this Act relating to the rehearing of an appeal or the statement of a case for the opinion of the High Court on a point of law, shall, with the necessary modifications, apply accordingly.
		In paragraph 13 (2) of Schedule 10, “‘the relevant year of assessment’ means” shall be deleted; after “foreign tax in respect of any income”, there shall be inserted “‘the relevant year of assessment’ means”; and after “in respect thereof”, there shall be inserted “and ‘the relevant accounting period’ means the accounting period for which that income falls to be charged to corporation tax or would fall so to be charged if any corporation tax were chargeable in respect thereof”, and the said paragraph 13 (2), as so amended, is set out in the following Table.
		TABLE

		(2) In this paragraph, in relation to credit for foreign tax in respect of any income, “the relevant year of assessment” means the year of assessment for which that income falls to be charged to income tax or would fall so to be charged if any income tax were chargeable in respect thereof and “the relevant accounting period” means the accounting period for which that income falls to be charged to corporation tax or would fall so to be charged if any corporation tax were chargeable in respect thereof.
		In paragraph 14 of Schedule 10, for “corporation profits tax” there shall be substituted “corporation tax”, and the said paragraph 14, as so amended, is set out in the following Table.
		TABLE
		14. Where the amount of any credit given under the arrangements is rendered excessive or insufficient by reason of any adjustment of the amount of any tax payable either in the State or in the territory in regard to which the arrangements are made, nothing in this Act or in the enactments relating to corporation tax limiting the time for the making of assessments or claims for relief shall apply to any assessment or claim to which the adjustment gives rise, being an assessment or claim made not later than six years from the time when all such assessments, adjustments and other determinations have been made, as are material in determining whether any, and if so what, credit falls to be given.
No. 14 of 1970	Finance Act, 1970.	The following subsection shall be substituted for section 57 (1)—
		“(1) In this section ‘Corporation Tax Acts’ has the meaning given by section 155 (1) of the Corporation Tax Act, 1976.”.
		In section 57 (2), for “section 363 of the said Act,”, there shall be substituted “section 167 of the Corporation Tax Act, 1976”, and the said section 57 (2), as so amended, is set out in the following Table.
		TABLE
		(2) For the purposes of section 361 of and Schedule 10 to the Income Tax Act, 1967, and of the definition of “double taxation relief” in section 167 of the Corporation Tax Act, 1976, any amount of tax under the law of a territory outside the State which would have been payable but for a relief to which this section applies given under the said law (being a relief with respect to which provision is made in arrangements for double taxation relief which are the subject of an order under the said section 361) shall be treated as having been payable; and references in the said sections and Schedule to double taxation, tax payable or chargeable or tax not chargeable directly or by deduction shall be construed accordingly.
		In section 57 (3), for “the Corporation Profits Tax Acts”, in each place where it occurs, there shall be substituted “the Corporation Tax Acts”, and the said section 57 (3), as so amended, is set out in the following Table.
		TABLE
		(3) The Revenue Commissioners may make regulations generally for carrying out the provisions of this section or any arrangements having the force of law under the said section 361 and may, in particular, but without prejudice to the generality of the foregoing, provide in the regulations—
		(a) for the purposes of this section or of the regulations, for the application (with or without modifications) of any provision of the Income Tax Acts or any regulations made thereunder or the Corporation Tax Acts or any regulations made thereunder, including the provisions relating to the rehearing of an appeal and the statement of a case for the opinion of the High Court on a point of law, and
		(b) that the whole or any part of a dividend paid out of profits or gains which consist of or include profits or gains in relation to which double taxation relief is given by virtue of this section is not to be regarded as income or profits for any purpose of the Income Tax Acts or of the Corporation Tax Acts.

PART II Repeal of Enactments concerning Double Taxation Relief

Number and Year	Short Title	Extent of Repeal
(1)	(2)	(3)
No. 6 of 1967	Income Tax Act, 1967.	Sections 363 and 364.
		Paragraph 3 (1) of Schedule 10.
		Paragraph 7 of Schedule 10.
		In paragraph 8 (3) (c) of Schedule 10, the words “for the purposes of income tax”.
No. 33 of 1968	Finance Act, 1968.	Section 35.

FIFTH SCHEDULE Transitional Relief in respect of Certain Payments and Management Expenses

(1) This paragraph applies to a company which comes within the charge to corporation tax in respect of a source of income as from a date before the 7th day of April, 1975.

(2) In this paragraph—

(a) the relevant period of a company means the period commencing on the earliest date on which the company comes within the charge to corporation tax in respect of any source of income and ending on the 5th day of April, 1976;

(b) the relevant amount payable by a company means the aggregate of the amounts specified in subparagraph (3) which become due for payment by the company in the year 1974-75 or, if it is smaller, the aggregate of the amounts specified in the said subparagraph which become due for payment by the company in the year 1975-76.

(3) The amounts referred to in subparagraph (2) (b) are payments of—

(a) any yearly interest, annuity or other annual payment and any such other payments as are mentioned in section 93 of the Income Tax Act, 1967;

(b) any other interest payable in the State on an advance from a bank carrying on a bona fide banking business in the State, or from a person who in the opinion of the Revenue Commissioners is bona fide carrying on business as a member of a stock exchange in the State or bona fide carrying on the business of a discount house in the State and for the purposes of this subparagraph any such interest payable by a company shall be treated as paid on its being debited to the company's account in the books of the person to whom it is payable; and

(c) any royalty or other sum which is paid in respect of the user of a patent wholly out of income brought within the charge to income tax or corporation tax:

Provided that the following amounts shall be treated as not being amounts which are specified in this subparagraph—

(i) any amount of interest which, if it is paid before the 6th day of April, 1976, is treated by virtue of Chapter III of Part I of the Finance Act, 1974, as not qualifying for relief by repayment or otherwise;

(ii) any amount which, if it is paid on or after the 6th day of April, 1976, is treated as not being a charge on income within the meaning of section 10 (allowance of charges on income);

(iii) any amount which is deductible in computing any income of the company; and

(iv) any amount which is a dividend or other distribution of the company.

(4) For the purposes of this paragraph the income of a company charged to corporation tax for any period shall be determined in accordance with the provisions of section 28 (8) (small companies).

(5) Subject to subparagraph (6), the corporation tax payable by a company to which this paragraph applies, for any accounting period of the company which falls wholly or partly within the relevant period of the company, shall be reduced by an amount determined by the formula—

B A __ C	D __ E	F __ 100

where—

A is the relevant amount payable by the company,

B is the income of the company charged to corporation tax for the accounting period, with the addition of any amount which has been allowed in respect of charges on income or expenses of management in respect of that part, if any, of the accounting period falling after the 5th day of April, 1976,

C is the total amount of the income of the company in the accounting period (including franked investment income, dividends paid by any body corporate and income which under any provision of the Tax Acts is exempt from any tax or is disregarded for the purposes of any tax or is deemed not to be income) before any deduction for charges on income or expenses of management,

D is the number of months or fractions of months comprised in that part of the accounting period which falls before the 6th day of April, 1976,

E is the number of months or fractions of months comprised in the relevant period of the company, and

F is the standard rate per cent. for the year 1976-77.

(6) Where the amount of corporation tax which is payable by a company for any accounting period which falls wholly or partly within the relevant period of the company is reduced in accordance with the provisions of Part IV (Profits from Export of Certain Goods) the amount of the reduction to be made under this section shall be an amount which bears the same proportion to the amount determined in accordance with the provisions of subparagraph (5) as the amount of corporation tax which would be payable by the company for the accounting period if this paragraph had not been enacted bears to the amount of corporation tax which would be payable by the company for the accounting period if neither Part IV nor this paragraph had been enacted.

(1) This paragraph applies to an investment company (as defined in section 15 (6)) which comes within the charge to corporation tax in respect of a source of income as from a date before the 7th day of April, 1975, and which is entitled under section 214 of the Income Tax Act, 1967, to relief for expenses of management for the year 1975-76.

(2) The corporation tax payable by a company to which this paragraph applies, for any accounting period which falls wholly or partly within the year 1975-76, shall be reduced by an amount determined by the formula—

B A __ C	D __ 12	F __ 100

where—

A is the amount of management expenses disbursed by the company for the year 1975-76 and in respect of which the company is entitled to relief under section 214 of the Income Tax Act, 1967, or, if it is smaller, an amount which bears the same proportion to the amount of management expenses disbursed by the company for the year 1974-75 and in respect of which the company is entitled to relief under the said section as the amount of the total income (including franked investment income, dividends paid by any body corporate and income which under any provision of the Tax Acts is exempt from any tax or is disregarded for the purposes of any tax or is deemed not to be income) of the company for the year 1975-76 bears to the amount of the total income (computed in like manner) of the company for the year 1974-75,

B is the income of the company charged to corporation tax for the accounting period with the addition of any amount which has been allowed in respect of charges on income or expenses of management in respect of that part, if any, of the accounting period falling after the 5th day of April, 1976,

D is the number of months or fractions of months comprised in that part of the accounting period which falls within the year 1975-76, and

F is the standard rate per cent. for the year 1976-77.

(3) Paragraph 1 (4) shall apply for the purposes of this paragraph as it applies for the purposes of paragraph 1.

(1) This paragraph applies to a company (whether or not the company is resident in the State) which

(a) carries on life business whether mutual or proprietary, and

(b) is not charged to corporation tax under Case I of Schedule D in respect of that business for any accounting period falling wholly or partly within the year 1975-76, and

(c) comes within the charge to corporation tax in respect of a source of income as from a date before the 7th day of April, 1975.

B A __ C	D __ 12	F __ 100

where—

A is the amount of management expenses disbursed by the company for the year 1975-76 and in respect of which the company is entitled to relief under section 214 of the Income Tax Act, 1967, (or would have been so entitled, if the company had not been charged to income tax for the year 1975-76 in accordance with the provisions of the Income Tax Act, 1967, applicable to Case I of Schedule D) reduced by an amount, income tax on which at the standard rate for the year 1975-76 is equal to the amount by which relief for those expenses would fall to be restricted by reason of subparagraph (a) of the proviso to section 214 (1), and for this purpose the year ending on the 5th day of April, 1976, shall be the period for which the computation in accordance with the provisions of the Income Tax Act, 1967, applicable to Case I of Schedule D is made,

D is the number of months or fractions of months comprised in that part of the accounting period which falls within the year 1975-76, and

F is the standard rate per cent. for the year 1976-77.

(3) Paragraph 1 (4) shall apply for the purposes of this paragraph as it applies for the purposes of paragraph 1.

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