FINANCE ACT, 1988

27 Amendment of section 23 (deduction for certain expenditure on construction of rented residential accommodation) of Finance Act, 1981.

27.—(1) As respects expenditure to which this section applies, section 23 of the Finance Act, 1981, shall apply as if—

• (a) in subsection (1) (a) for the definition of “qualifying period” there were substituted the following definition—

“‘qualifying period’ means the period commencing on the 27th day of January, 1988, and ending on the 31st day of March, 1991;”, and

• (b) in the definition of “qualifying premises” in the said subsection (1) (a) “90 square metres” were substituted for “75 square metres”.

• (2) This section applies to expenditure incurred in the period commencing on the 27th day of January, 1988, and ending on the 31st day of March, 1991, on the construction of a qualifying premises.

• (3) This section shall be construed together with section 23 of the Finance Act, 1981.

28 Application of section 21 (rented residential accommodation: deduction for expenditure on refurbishment) of Finance Act, 1985, etc.

28.—As respects relevant expenditure (within the meaning of subsection (1) (a) of section 21 of the Finance Act, 1985) incurred in the period commencing on the 27th day of January, 1988, and ending on the 31st day of March, 1991, the said section 21 shall have effect as if—

• (a) in subsection (2) (a) (iii) for the definition of “qualifying period” there were substituted the following definition—

“‘qualifying period’ means the period commencing on the 27th day of January, 1988, and ending on the 31st day of March, 1991;”, and

• (b) the proviso to section 29 (2) of the Finance Act, 1983, were deleted.

29 Application of section 22 (extension of application of relief for conversion of certain buildings) of Finance Act, 1985, etc.

29.—With respect to expenditure incurred in the period commencing on the 27th day of January, 1988, and ending on the 31st day of March, 1991, section 22 of the Finance Act, 1985, shall have effect as if—

• (a) (i) in subsections (1) and (2) of the said section 22, for “commencing on the 1st day of April, 1985, and ending on the 31st day of March, 1987,” and

• (ii) in section 30 (2) of the Finance Act, 1983, for “commencing on the 1st day of April, 1984, and ending on the 31st day of March, 1987,”

there were substituted “commencing on the 27th day of January, 1988, and ending on the 31st day of March, 1991,”,

• (b) in subsection (4) of the said section 22 for the definition of “qualifying period” there were substituted the following definition—

“‘qualifying period’ means the period commencing on the 27th day of January, 1988, and ending on the 31st day of March, 1991;”,

and

• (c) the proviso to section 29 (2) of the said Finance Act, 1983, were deleted.

30 Pension funds: extension of tax exemptions to dealings in financial futures and traded options.

30.—(1) In this section—

“financial futures” and “traded options” mean, respectively, financial futures and traded options which are for the time being dealt in or quoted on a futures exchange or a stock exchange in the State.

• (2) For the purposes of—

• (a) section 16 (2) of the Finance Act, 1972,

• (b) section 21 (1) of the Capital Gains Tax Act, 1975, and

• (c) section 41 (1) of the Corporation Tax Act, 1976,

a contract entered into in the course of dealing in financial futures or traded options shall be regarded as an investment.

31 Tax credits in respect of distributions.

31.—(1) The provisions of the Corporation Tax Act, 1976, specified in paragraph 1 of Part I of the Second Schedule shall have effect—

• (a) in relation to distributions made in the year 1988-89, as if the standard rate for that year of assessment were 32 per cent., and

• (b) in relation to distributions made on or after the 6th day of April, 1989, as if the standard rate for the year 1989-90 and subsequent years of assessment were 28 per cent.

• (2) Part I of the Second Schedule shall have effect for the purpose of supplementing subsection (1).

32 Amendment of section 45 (distributions) of Finance Act, 1980.

32.—(1) Section 45 of the Finance Act, 1980, is hereby amended as respects distributions made by a company on or after the 6th day of April, 1989, by the substitution for subsections (1), (2) and (3) of the following subsections:

• “(1)

  • (a) There shall be treated as a specified distribution for the purposes of subsection (2) so much of a distribution (hereafter in this paragraph referred to as ‘the first-mentioned distribution’) treated under subsection (1A) as made by a company for an accounting period as is equal to the amount, which may be nil, determined by the formula

  Y	×	(A−B) + E−U __ (R−S) + T−U

  where, subject to sections 46 to 49—

  A is the amount of the company's income, the corporation tax referable to which is reduced under section 41, for the relevant accounting period which coincides with or is included in the accounting period,

  B is the amount of the corporation tax, as reduced under section 41, referable to the amount mentioned in the definition of A,

  E is the amount of the relevant distributions, whether made before the 6th day of April, 1989, or on or after that day, received by the company in the accounting period, which is included in its franked investment income of the accounting period, other than franked investment income against which relief is given under section 15 (4), 25 or 26 of the Corporation Tax Act, 1976, and which relief was not subsequently withdrawn under the provisions of those sections,

  R is the amount of the income of the company charged to corporation tax for the accounting period as defined in section 28 (8) of the Corporation Tax Act, 1976, with the addition of any amount of income of the company which would be charged to corporation tax for the accounting period but for the provisions of section 18 of the Finance Act, 1969, section 34 of the Finance Act, 1973, or section 71 of the Corporation Tax Act, 1976,

  S is the amount of the corporation tax which, before any set-off of, or credit for, tax, including foreign tax, and after any relief under section 58, 182 or 184 of the Corporation Tax Act, 1976, or section 41 of the Finance Act, 1980, is chargeable for the accounting period, exclusive of the corporation tax, before any credit for foreign tax, chargeable on the part of the company's profits attributable to chargeable gains for that period: and that part shall be taken to be the amount brought into the company's profits for that period for the purposes of corporation tax in respect of chargeable gains before any deduction for charges on income, expenses of management or other amounts which can be deducted from or set against or treated as reducing profits of more than one description,

  T is the amount of the distributions received by the company in the accounting period which is included in its franked investment income of the accounting period, other than franked investment income against which relief is given under section 15 (4), 25 or 26 of the Corporation Tax Act, 1976, and which relief was not subsequently withdrawn under the provisions of those sections, with the addition of any amount received by the company in the accounting period to which the provisions of section 76 (2) (a) (ii), section 81 (4), section 93 (3) or section 170 (3) of the Corporation Tax Act, 1976, applies,

  U is—

  - (i) the amount (hereafter in this definition referred to as the ‘first-mentioned amount’) of the distributable manufacturing income of the company for the accounting period reduced by the amount (hereafter in this definition referred to as the ‘second-mentioned amount’), if any, by which the total amount of the distributable manufacturing income of the company for that period and for any preceding accounting periods of the company exceeds the total amount of the relevant distributions made by the company before the 6th day of April, 1989, or
  
  - (ii) nil, if the second-mentioned amount is not less than the first-mentioned amount, and
  
    Y is the amount of the first-mentioned distribution.
  

  • (b) Any reference in this section to a relevant distribution made by a company before the 6th day of April, 1989, shall be construed as a reference to a relevant distribution within the meaning of this section before it was amended by the Finance Act, 1988.

• (1A) For the purposes of this subsection and subsections (1) and (2) and irrespective of the period of account for which a distribution is made by a company, a distribution or distributions, as the case may be, made by the company on a day (hereafter in this subsection referred to as the ‘first-mentioned day’) which is a day falling on or after the 6th day of April, 1989, shall be treated as having been made for the most recent accounting period of the company ending before the first-mentioned day:

Provided that a distribution that is—

- (*a*) an interim dividend paid by the directors in respect of the profits of the accounting period in which it is paid, pursuant to powers conferred on them by the articles of association of the company, or

- (*b*) a distribution by virtue only of subparagraph (ii), (iii) (I) or (v) of section 84 (2) (*d*) of the Corporation Tax Act, 1976,

  shall be treated as having been made for the accounting period in which the first-mentioned day falls:

  Provided also that—

- (*a*) (i) where the first-mentioned day falls in an accounting period of the company which begins on the day on which the company commenced to be within the charge to corporation tax, the distribution or distributions, as the case may be, shall be treated as made for that accounting period and, where the total amount of distributions made by the company on or after the 6th day of April, 1989, which are treated as having been made for that accounting period would otherwise exceed the amount of the distributable income of the company for that accounting period, the excess shall be treated as a distribution or distributions, as the case may be, which has not or have not been made for any accounting period, and

    - (ii) where the first-mentioned day falls on or after the first day of an accounting period of the company which ends on a day on which the company ceases to be within the charge to corporation tax, the distribution or distributions, as the case may be, shall be treated as made for that accounting period;

- (*b*) (i) where the total amount of distributions made by the company on or after the 6th day of April, 1989, which are treated as having been made for an accounting period, would otherwise exceed the amount of the distributable income of the company for that accounting period, the excess shall be treated as a distribution or distributions, as the case may be, made for the immediately preceding accounting period of the company, and

    - (ii) where the total amount of distributions made by the company on or after the 6th day of April, 1989, which are treated as having been made for the immediately preceding accounting period referred to in subparagraph (i), would otherwise exceed the amount of the distributable income of the company for that accounting period, the excess shall be treated as a distribution or distributions, as the case may be, made for the next immediately preceding accounting period of the company and so on,

      and

- (*c*) where by virtue of the application of the provisions of this subsection to the distribution or distributions, as the case may be, made by the company on the first-mentioned day there is an excess such as is mentioned in this proviso, that excess—

    - (i) where there is only one distribution made by the company on the first-mentioned day, shall be wholly attributed to that distribution, or

    - (ii) where there is more than one distribution so made on the first-mentioned day, shall be partly attributed to each of those distributions in the same respective proportion as the amount of each such distribution bears to the total amount of the distributions made by the company on that day,

      so that any distribution made by the company on the first-mentioned day shall be treated as consisting of two or, if there is more than one such excess, more distributions each of which is made by the company for a different accounting period (if any).

• (1B) For the purposes of this section—

  • (a) the amount of the distributable income of a company for an accounting period shall be the amount determined by the formula

  (R−S) + T−U

  where R, S, T and U have the same meanings as in subsection (1), and

  • (b) the amount of the distributable manufacturing income of a company for an accounting period shall be the amount determined by the formula

  (A−B) + E

  where A, B and E have the same meanings as in subsection (1).

• (2) Where, by virtue of subsections (1) and (1A), a distribution made by a company on or after the 6th day of April, 1989 (hereafter in this subsection referred to as the first-mentioned distribution) is treated, as the case may be, as—

  • (i) consisting of, or including, a specified distribution, or

  • (ii) consisting of two or more distributions, one or more of which is treated as consisting of, or including, a specified distribution,

  the first-mentioned distribution shall, notwithstanding any other provision of the Corporation Tax Acts, be treated for the purposes of those Acts as if it consisted of two distributions, either, but not both, of which may be nil, being respectively—

  • (a) a distribution which shall be a relevant distribution for the purposes of this section of an amount equal to the amount of the specified distribution mentioned in paragraph (i) or equal to the total amount of the specified distributions mentioned in paragraph (ii), as the case may be, and

  • (b) a distribution which is not a relevant distribution and which consists of the balance of the first-mentioned distribution.

• (3) The tax credit to which a recipient of a relevant distribution is entitled in respect of it shall, notwithstanding any provision of the Corporation Tax Acts other than this section, be an amount equal to one-eighteenth of the amount of the relevant distribution.”.

• (2)
• (a) In this subsection “the specified day” means the day, being a day not earlier than the 6th day of April, 1988, specified in a notice under paragraph (b).

• (b) Where a company so elects by notice in writing given to the inspector, this section and section 45 of the Finance Act, 1980 (as amended by this section), shall have effect as respects any distributions made by the company on or after the specified day as if the date on which the specified day falls were substituted for “the 6th day of April, 1989” in each place where it occurs in this section, the said section 45 and Part II of the Second Schedule.

• (3) Part II of the Second Schedule shall have effect for the purpose of supplementing subsection (1).

Chapter IV Corporation Tax

33 Rates of corporation tax.

33.—(1) As respects any accounting period ending on or after the 1st day of April, 1988, section 1 of the Corporation Tax Act, 1976, is hereby amended by the substitution of the following subsection for subsection (1):

• “(1) For the financial year 1974 and each subsequent financial year there shall be charged on profits of companies a tax, to be called corporation tax, at the rate of—

  • (a) 50 per cent. for—

    • (i) each financial year until and including the year 1987, and

    • (ii) that part of the financial year 1988 beginning on the 1st day of January, 1988, and ending on the 31st day of March, 1988;

  • (b) 47 per cent. for—

    • (i) that part of the financial year 1988 beginning on the 1st day of April, 1988, and ending on the 31st day of December, 1988, and

    • (ii) that part of the financial year 1989 beginning on the 1st day of January, 1989, and ending on the 31st day of March, 1989;

    and

  • (c) 43 per cent. for—

    • (i) that part of the financial year 1989 beginning on the 1st day of April, 1989, and ending on the 31st day of December, 1989, and

    • (ii) each subsequent financial year.”.

• (2) Sections 28 and 79 of the Corporation Tax Act, 1976, shall not have effect for any accounting period ending on or after the 1st day of April, 1989.

• (3) The Third Schedule shall have effect for the purpose of supplementing this section.

34 Amendment of Part XI (group relief) of Corporation Tax Act, 1976.

34.—Part XI of the Corporation Tax Act, 1976, is hereby amended by the insertion after section 116 of the following section:

“116A—(1) (a) In this section—

‘trade’ means a trade carried on by a company which consists of or includes the manufacture of goods (including activities carried on in an accounting period which would, if the company had sufficient profits in that period and made a claim for relief in respect of the trade under Chapter VI of Part I of the Finance Act, 1980, for that period, fall to be regarded for the purposes of that Chapter as the manufacture of goods);

‘income from the sale of goods’ in an accounting period in the course of a trade carried on by a company shall, subject to section 118 as applied for the purposes of relief under this section, be such income as would be ‘the income from the sale of those goods’ in that period in the course of the trade for the purposes of a claim under section 41 (2) of the Finance Act, 1980, if—

• (i) no group relief under this section were allowed against income from the trade in that period,

• (ii) the company had sufficient profits, and

• (iii) the company made a claim for relief under Chapter VI of Part I of the Finance Act, 1980;

‘a loss from the sale of goods’ in the course of a trade in an accounting period shall be such amount as would be the amount of the income from the sale of goods in that period if, notwithstanding section 41 (4) of the Finance Act, 1980, ‘the company's income for the relevant accounting period from the sale in the course of the trade mentioned in that subsection of goods and merchandise’ for the purposes of subsection (3) of the said section were the amount of so much of the loss, computed as for the purposes of section 16 (2), from the trade in the period as appears to the inspector, or on appeal, to the Appeal Commissioners to be referable to a loss incurred in the sale of goods and merchandise:

Provided that a loss such as is mentioned in section 28 (4) (b) of the Finance Act, 1987, shall not be a loss from the sale of goods;

‘charges on income paid for the purpose of the sale of goods’ in the course of a trade in an accounting period shall be such amount as would be the amount of the income from the sale of goods in that period if, notwithstanding section 41 (4) of the Finance Act, 1980, ‘the company's income for the relevant accounting period from the sale in the course of the trade mentioned in that subsection of goods and merchandise’ for the purposes of subsection (3) of the said section were the amount of so much of the charges on income paid wholly and exclusively for the purposes of the trade in that period as appears to the inspector, or on appeal, to the Appeal Commissioners to be referable to charges on income paid for the purpose of the sale of goods and merchandise;

‘an excess of charges on income paid for the purpose of the sale of goods’ in the course of the trade in an accounting period shall be so much of an amount, being the amount by which the charges on income paid by a company for the purpose of the sale of goods in the course of the trade in that period exceed the income from the sale of goods in the course of the trade in that period, as does not exceed the excess referred to in section 116 (6) as computed for the company for that period;

‘the sale of goods and merchandise’ in the course of a trade carried on by a company shall mean the sale of such goods and merchandise as would respectively be treated as goods and merchandise for the purposes of a claim under Chapter VI of the Finance Act, 1980, if the company had a sufficiency of profits and had made such a claim.

• (b) For the purposes of this section—

  • (i) where an accounting period begins before the 1st day of January, 1989, and ends on or after that date it shall be divided into one part, beginning on the date on which the accounting period begins and ending on the 31st day of December, 1988, and another part, beginning on the 1st day of January, 1989, and ending on the day on which the accounting period ends, and both parts of the accounting period shall be treated as if they were separate accounting periods, and

  • (ii) where an accounting period begins before the 1st day of January, 2001, and ends on or after that date it shall be divided into one part beginning on the day on which the accounting period begins and ending on the 31st day of December, 2000, and another part, beginning on the 1st day of January, 2001, and ending on the day the accounting period ends, and both parts shall be treated as if they were separate accounting periods.

• (2)

  • (a) Notwithstanding subsections (1) and (6) of section 116 and section 117, if, in any accounting period falling within the period from the 1st day of January, 1989, to the 31st day of December, 2000, the surrendering company incurs a loss from the sale of goods or an excess of charges on income paid for the purpose of the sale of goods, that loss or excess may be set off for the purposes of corporation tax against income from a trade of the claimant company for its corresponding accounting period to the extent of that income or, if it is less, to the extent of the income from the sale of goods in the course of the trade, but no other relief shall be given in respect of that loss or excess to a company other than the surrendering company.

  • (b) Group relief allowed under paragraph (a) shall reduce the income from a trade of the claimant company for an accounting period—

    • (i) before relief granted under section 18 (terminal loss in trade) in respect of a loss incurred in a succeeding accounting period or periods, and

    • (ii) after relief granted under section 16 (relief for trading losses other than terminal loss) in respect of a loss incurred in a preceding accounting period or periods.

• (3)

  • (a) For the purposes of subsection (3) of section 41 of the Finance Act, 1980, ‘the amount of the company's income for the relevant accounting period from the sale in the course of the trade mentioned in that subsection of goods and merchandise’ shall be determined in accordance with subsection (4) of the said section 41 as if no group relief had been allowed under this section.

  • (b) Notwithstanding the provisions of subsection (3) of the said section 41, ‘the income from the sale of those goods’ in an accounting period for the purposes of subsection (2) of the said section 41 shall be the sum determined by subsection (3) of the said section 41 for that period reduced by any group relief allowed under this section against income of the trade mentioned in subsection (2) of the said section 41 in that period.

• (4) This section shall not apply to—

  • (a) (i) a loss from the sale of goods in the course of a trade, or

    • (ii) an excess of charges on income paid for the purpose of the sale of goods in the course of a trade, in an accounting period or part of an accounting period falling before the 6th day of April, 1990, if, in the latest preceding accounting period in which there was income from the trade in respect of which corporation tax was payable, the amount thereof was reduced under Part IV, or

  • (b) so much of a loss from the sale of goods in the course of a trade in an accounting period as does not exceed the amount of the capital allowances under section 42 (2) of the Finance Act, 1986, deducted by the surrendering company in computing the loss which it has incurred in that period in carrying on trading operations specified in a certificate given to it and not revoked by the Minister for Finance under section 39B (2) of the Finance Act, 1980.

• (5) For the purposes of this section—

  • (a) in the case of a claim made by a company as a member of a consortium, only a fraction of a loss from the sale of goods or an excess of charges on income paid for the purpose of the sale of goods may be set off, and that fraction shall be equal to that member's share in the consortium, subject to any further reduction under section 118 (2), and

  • (b) section 118 shall have effect as if—

    • (i) for ‘total profits’ in paragraph (a) of subsection (2) there were substituted ‘income from a trade’, and

    • (ii) for ‘the said profits’ in paragraph (b) there were substituted ‘the income from the sale of goods in the course of a trade of the claimant company’.”.

35 Amendment of section 39A (relief in relation to income from certain trading operations carried on in Shannon Airport) of Finance Act, 1980.

35.—Section 39A of the Finance Act, 1980, is hereby amended by the deletion of the proviso to subsection (2).

36 Amendment of section 39B (relief in relation to income from certain trading operations carried on in Custom House Docks Area) of Finance Act, 1980.

36.—(1) Subsection (7) (c) of section 39B (inserted by the Finance Act, 1987) of the Finance Act, 1980, is hereby repealed and shall be deemed never to have been enacted.

• (2) Subject to the provisions of subsections (6) and (7) of the said section 39B, the Minister for Finance may give to a company a certificate, within the meaning of subsection (2) of that section, having effect from the date on which it would have had effect but for the said subsection (7) (c).

• (3) Subsection (6) of the said section 39B is hereby amended by the insertion after paragraph (iii) of the following paragraph—

“(iiia) dealing in commodity futures or commodity options on behalf of persons not ordinarily resident in the State, other than on behalf of persons who—

• (I) carry on a trade in which commodities of a type which are the subject of the futures or options, as the case may be, are used in the course of the carrying on of the trade, or

• (II) would be regarded for the purposes of the Corporation Tax Acts as connected with a person who carries on such a trade,”.

• (4)
• (a) In this subsection—

“the Area” has the same meaning as it has for the purposes of the said section 39B;

“foreign life assurance business” means relevant trading operations within the meaning of the said section 39B consisting of life assurance business with policy holders and annuitants who reside outside the State;

“foreign unit trust business” means relevant trading operations within the meaning of the said section 39B consisting of the management of the investments of one or more qualifying unit trusts;

“qualifying unit trust” means a unit trust scheme—

• (a) that is a registered unit trust scheme within the meaning of the Unit Trusts Act, 1972,

• (b) the business of which—

• (i) is carried on in the Area, or

• (ii) is not so carried on but is carried on in the State and would be carried on in the Area but for circumstances outside the control of the person or persons carrying on the business,

and

• (c) as respects which all holders of units in the scheme are persons resident outside the State;

“tax” means income tax, corporation tax or capital gains tax, as may be appropriate.

• (b) Notwithstanding any other provision of the Tax Acts, the rate at which any tax is chargeable (before any credit is allowed for foreign tax) in respect of income arising or chargeable gains accruing from securities or possessions in any place outside the State that are investments of a foreign life assurance business or investments managed by a foreign unit trust business shall not exceed 10 per cent.

37 Application of section 84 (matters to be treated as distributions) of Corporation Tax Act, 1976, to certain interest.

37.—(1) (a) This section applies to so much of any interest as—

• (i) is a distribution by virtue only of section 84 (2) (d) (iv) of the Corporation Tax Act, 1976,

• (ii) is payable by a qualified company in the course of carrying on relevant trading operations and would, but for the said section 84 (2) (d) (iv), be deductible as a trading expense in computing the amount of the company's income from the relevant trading operations, and

• (iii) is interest payable to a company which is a resident of the United States of America or of a territory with the government of which arrangements having the force of law by virtue of section 361 of the Income Tax Act, 1967, have been made.

• (b) In paragraph (a)—

“qualified company” and “relevant trading operations” have the same meaning as they have for the purposes of section 39B (inserted by the Finance Act, 1987) of the Finance Act, 1980;

“resident of the United States of America” has the meaning assigned to it by the Convention set out in Schedule 8 to the Income Tax Act, 1967.

• (c) For the purposes of paragraph (a), a company shall be regarded as being a resident of a territory other than the United States of America if it is so regarded under arrangements made with the government of that territory and having the force of law by virtue of section 361 of the Income Tax Act, 1967.

• (2) Where a company proves that this section applies to any interest payable by it for an accounting period and elects to have that interest treated as not being a distribution for the purposes of section 84 (2) (d) (iv) of the Corporation Tax Act, 1976, the said section 84 (2) (d) (iv) shall not apply to that interest.

• (3) An election under this section in relation to interest payable by a company for an accounting period shall be made in writing to the inspector and submitted together with the company's return of its profits for the period.

38 Amendment of section 31 (interest payments by companies and to non-residents) of Finance Act, 1974.

38.—Section 31 of the Finance Act, 1974, is hereby amended by the insertion in subsection (3), after paragraph (c), of the following paragraph—

• “(cc) interest paid to a person whose usual place of abode is outside the State by a company in the course of carrying on relevant trading operations within the meaning of section 39A (inserted by the Finance Act, 1981) or section 39B (inserted by the Finance Act, 1987) of the Finance Act, 1980, or”.

39 Exemption of certain income of Nítrigin Éireann Teoranta.

39.—Notwithstanding any provision of the Corporation Tax Acts, income—

• (a) arising to Nítrigin Éireann Teoranta in any accounting period ending in the period commencing on the 1st day of January, 1987, and ending on the 31st day of December, 1992, from the business of supplying gas, purchased from Bord Gáis Éireann, to Irish Fertilizer Industries Limited under a contract between Nítrigin Éireann Teoranta and Irish Fertilizer Industries Limited, and

• (b) which, but for this section, would have been chargeable to corporation tax under Case I of Schedule D, shall be exempt from corporation tax.

40 Amendment of section 28 (relief in relation to income from qualifying shipping trade) of Finance Act, 1987.

40.—(1) Subsection (1) of section 28 of the Finance Act, 1987, is hereby amended—

• (a) by the insertion after “vessel” in paragraph (i) of the definition of “qualifying ship” of “other than a vessel normally used for the purposes of an activity mentioned in paragraph (d) of the definition of qualifying shipping activities in this subsection”, and

• (b) in the definition of “qualifying shipping activities”—

• (i) by the deletion of “and” in paragraph (c), and

• (ii) by the substitution for paragraph (d) of the following paragraphs—

• “(d) the subjecting of fish to a manufacturing process on board a qualifying ship, and

• (e) the letting on charter of a qualifying ship for use for the said purposes where the operation of the ship, and the crew of the ship, remain under the direction and control of the company;”,

and the said definitions as so amended are set out in the Table to this section.

• (2) For the purposes of Chapter III (Income Tax: Relief for Investment in Corporate Trades) of the Finance Act, 1984, any reference to section 28 (1) of the Finance Act, 1987, shall be construed as if subsection (1) had not been enacted.

• (3) Subsection (4) of the said section 28 is hereby amended by the substitution in paragraph (c) of “paragraph (c)” for “paragraph (b)” and the said paragraph, as so amended, is set out in the Table to this section.

TABLE

“qualifying ship” means a sea-going vessel which—

• (a) is owned to the extent of not less than 51 per cent. by a person or persons ordinarily resident in the State,

• (b) is registered in the State under Part II of the Mercantile Marine Act, 1955,

• (c) is of not less than 100 tons gross tonnage, and

• (d) is self-propelled,

but notwithstanding anything in paragraphs (a), (b), (c) or (d) of this definition does not include—

• (i) a fishing vessel other than a vessel normally used for the purposes of an activity mentioned in paragraph (d) of the definition of qualifying shipping activities in this subsection,

• (ii) a tug,

• (iii) a vessel (including a dredger) used primarily as a floating platform for working machinery or as a diving platform,

• (iv) a vessel used for the purposes of transporting supplies or personnel to, or providing services in respect of, a mobile or fixed rig, platform, vessel or installation of any kind at sea, and

• (v) any other vessel of a type which is not normally used for the purposes of qualifying shipping activities;

“qualifying shipping activities” means activities carried on by a company in the course of a trade and which consist of—

• (a) the use of a qualifying ship for the purpose of carrying by sea passengers or cargo for reward,

• (b) the provision, on board the qualifying ship, of services ancillary to the said use of the qualifying ship,

• (c) the granting of rights by virtue of which another person provides, or will provide, the said services, on board the said qualifying ship,

• (d) the subjecting of fish to a manufacturing process on board a qualifying ship, and

• (e) the letting on charter of a qualifying ship for use for the said purposes where the operation of the ship, and the crew of the ship, remain under the direction and control of the company;

• (c) the letting on charter of a ship referred to at paragraph (a) (ii), in the course of a trade, shall be deemed notwithstanding paragraph (c) of subsection (1) of section 40 of the Finance Act, 1984, to be a trade of leasing for the purposes of that section and to be a separate trade as provided for in subsection (2) of that section.

41 Relief from corporation tax in respect of certain dividends from a non-resident subsidiary.

41.—(1) (a) In this section—

“approved investment plan” means an investment plan in respect of which the Minister has given a certificate in accordance with subsection (2) to the company concerned;

“investment plan” means a plan of a company resident in the State which is directed towards the creation or maintenance of employment in the State in trading operations carried on, or to be carried on, in the State and which has, prior to its implementation, been submitted to the Minister by the company for the purpose of enabling it to claim relief under this section;

“Minister” means the Minister for Finance;

“relevant dividends” means dividends received on or after the 6th day of April, 1988, by a company resident in the State (being the company claiming the relief under this section) from a foreign subsidiary of the company and which are—

• (i) applied, not earlier than the 6th day of April, 1988, and within a period which commences one year before the day on which the dividends are received in the State and ends two years after that day, for the purposes of an approved investment plan, and

• (ii) specified in a certificate given by the Minister under subsection (2);

“relief under this section” means, in relation to a company for an accounting period, the amount by which any corporation tax payable by the company is reduced by virtue of subsection (3).

• (b) (i) The reference in paragraph (a) to “a foreign subsidiary” means a 51 per cent. subsidiary of a company where the company is resident in the State and the subsidiary is a resident of the United States of America or of a territory with the government of which arrangements having the force of law by virtue of section 361 of the Income Tax Act, 1967, have been made.

• (ii) For the purposes of subparagraph (i)—

“resident of the United States of America” has the meaning assigned to it by the Convention set out in Schedule 8 to the Income Tax Act, 1967;

a company shall be regarded as being a resident of a territory other than the United States of America if it is so regarded under the provisions of arrangements made with the government of that territory and having the force of law by virtue of section 361 of the said Act.

• (2) Where an investment plan has been duly submitted by a company and the Minister—

• (a) is satisfied that the plan is directed towards the creation or maintenance of employment in the State in trading operations carried on, or to be carried on, in the State, and

• (b) has been informed in writing by the company of the amount of dividends concerned,

the Minister may give a certificate to the company certifying that an amount of dividends specified in the certificate shall be an amount of relevant dividends.

• (3) Subject to subsection (4), where a company claims and proves that it has received in an accounting period any amount of relevant dividends, the amount of its income for the period represented by those dividends shall not be taken into account in computing the income of the company for that accounting period for the purposes of corporation tax.

• (4) Where, in relation to a certificate given to a company under subsection (2), the Minister considers that, as regards the approved investment plan concerned, all or part of the relevant dividends have not been applied within the period provided for in the definition of “relevant dividends” in subsection (1) (a), he may, by notice in writing to the company, reduce the amount of the relevant dividends specified in the certificate by so much as has not been so applied and, accordingly, where the amount of the relevant dividends specified in a certificate is so reduced—

• (a) in a case where relief under this section has been granted in respect of the amount of the relevant dividends specified in the certificate before such a reduction of that amount, the inspector shall make such assessments or additional assessments as are necessary to recover the relief given in respect of the amount of the reduction, and

• (b) in a case where a claim for relief has not yet been made, relief shall not be due under this section in respect of the amount of the reduction.

• (5) A claim for relief under this section shall be made in writing to the inspector and shall be submitted together with the company's return of profits for the period in which the relevant dividends are received in the State.

42 Exemption from corporation tax of profits of Custom House Docks Development Authority.

42.—Notwithstanding any provision of the Corporation Tax Acts, profits arising to the Custom House Docks Development Authority in any accounting period ending after the 17th day of November, 1986, shall be exempt from corporation tax.

Chapter V Capital Allowances

43 Amendment of section 251 (initial allowances for machinery and plant) of Income Tax Act, 1967.

43.—Section 251 (as amended by section 20 of the Finance Act, 1985) of the Income Tax Act, 1967, is hereby amended—

• (a) by the insertion in subsection (4), after paragraph (b), of the following paragraph:

• “(bb) (i) in relation to capital expenditure incurred on or after the 1st day of April, 1988, and before the 1st day of April, 1989, as if ‘three-fourths’ were substituted for ‘one-fifth’ in subsection (1), and

  • (ii) in relation to capital expenditure incurred on or after the 1st day of April, 1989, and before the 1st day of April, 1991, as if ‘one-half’ were substituted for ‘one-fifth’ in subsection (1).”,

and

• (b) by the insertion after subsection (6) of the following subsection:

• “(7) Where an allowance in respect of capital expenditure incurred on or after the 1st day of April, 1988, on the provision of new machinery or plant is made under this section, section 11 of the Finance Act, 1967, and section 26 of the Finance Act, 1971, shall not have effect in relation to an allowance which falls to be made under section 241 of the Income Tax Act, 1967, for wear and tear of the said machinery or plant.”.

44 Amendment of section 254 (industrial building allowance) of Income Tax Act, 1967.

44.—Section 254 (as amended by section 20 of the Finance Act, 1985) of the Income Tax Act, 1967, is hereby amended by the insertion after subsection (6) of the following subsection:

• “(7) Where an allowance in respect of capital expenditure incurred on or after the 1st day of April, 1988, on the construction of a building or structure is made under this section, no increase in any allowance under section 264 of the Income Tax Act, 1967, by virtue of the provisions of section 25 of the Finance Act, 1978, shall be made in relation to that capital expenditure.”.

45 Amendment of section 265 (balancing allowances and balancing charges) of Income Tax Act, 1967.

45.—Section 265 (as amended by section 20 of the Finance Act, 1985) of the Income Tax Act, 1967, is hereby amended—

• (a) by the insertion in subsection (1) after paragraph (c) of the following paragraph:

• “(d) where consideration (other than rent or an amount treated as rent under section 83 of the Income Tax Act, 1967) is received by the person entitled to the relevant interest in respect of an interest which is subject to that relevant interest,”,

• (b) by the substitution for subsection (2) of the following subsection:

• “(2) Where there are no sale, insurance, salvage or compensation moneys, or consideration of the type referred to in paragraph (d) of subsection (1), or where the residue of the expenditure immediately before the event exceeds those moneys or that consideration, a balancing allowance shall be made and the amount thereof shall be the amount of the said residue or, as the case may be, of the excess thereof over the said moneys or the said consideration.”,

and

• (c) by the substitution for subsection (3) of the following subsection:

• “(3) If the sale, insurance, salvage or compensation moneys, or consideration of the type referred to in paragraph (d) of subsection (1), exceed the residue, if any, of the expenditure immediately before the event, a balancing charge shall be made and the amount on which it is made shall be an amount equal to the excess, or, where the residue is nil, to the said moneys or the said consideration.”.

46 Amendment of section 11 (wear and tear allowances for certain machinery and plant in undeveloped areas) of Finance Act, 1967.

46.—Section 11 (inserted by the Corporation Tax Act, 1976) of the Finance Act, 1967, is hereby amended by the substitution for subsection (2) of the following subsection:

• “(2)

  • (a) Subject to the provisions of this section, where for any chargeable period an allowance falls to be made under section 241 of the Income Tax Act, 1967, for wear and tear of any qualifying machinery or plant, the allowance shall, subject to subsection (6) of that section, be increased by such amount as is specified by the person to whom the allowance is to be made; and, in relation to a case in which this subsection has had effect, any reference in the Income Tax Acts to an allowance made under the said section 241 shall be construed as a reference to that allowance as increased under this subsection.

  • (b) As respects any machinery or plant provided for use on or after the 1st day of April, 1988, any allowance made under section 241 of the Income Tax Act, 1967, and increased under paragraph (a) of this subsection, in respect of that machinery or plant, whether claimed in one chargeable period or more than one such period, shall not, in the aggregate, exceed—

    • (i) if the machinery or plant is provided for use before the 1st day of April, 1989, 75 per cent., or

    • (ii) if the machinery or plant is provided for use on or after the 1st day of April, 1989, 50 per cent.,

    of the capital expenditure incurred on the provision of that machinery or plant.”.

47 Amendment of section 26 (increase of wear and tear allowances for certain machinery and plant) of Finance Act, 1971.

47.—Section 26 (inserted by the Corporation Tax Act, 1976) of the Finance Act, 1971, is hereby amended by the substitution for subsection (2) of the following subsection:

• “(2)

  • (a) Subject to the provisions of this section, where for any chargeable period an allowance falls to be made under section 241 of the Income Tax Act, 1967, for wear and tear of any qualifying machinery or plant, the allowance shall, subject to subsection (6) of that section, be increased by such amount as is specified by the person to whom the allowance is to be made; and, in relation to a case in which this subsection has had effect, any reference in the Income Tax Acts to an allowance made under the said section 241 shall be construed as a reference to that allowance as increased under this subsection.

  • (b) As respects any machinery or plant provided for use on or after the 1st day of April, 1988, any allowance made under section 241 of the Income Tax Act, 1967, and increased under paragraph (a) of this subsection, in respect of that machinery or plant, whether claimed in one chargeable period or more than one such period, shall not, in the aggregate, exceed—

    • (i) if the machinery or plant is provided for use before the 1st day of April, 1989, 75 per cent., or

    • (ii) if the machinery or plant is provided for use on or after the 1st day of April, 1989, 50 per cent.,

    of the capital expenditure incurred on the provision of that machinery or plant.”.

48 Amendment of section 25 (increase of writing-down allowances for certain industrial buildings) of Finance Act, 1978.

48.—Section 25 (as amended by section 25 of the Finance Act, 1979) of the Finance Act, 1978, is hereby amended by the substitution for subsection (2) of the following subsection:

• “(2)

  • (a) Where for any chargeable period an allowance falls to be made under the said section 264 in respect of qualifying expenditure, the allowance shall, subject to subsection (4) of that section, be increased by such amount as is specified by the person to whom the allowance is to be made and, in relation to a case in which this subsection has had effect, any reference in the Income Tax Acts to an allowance made under the said section 264 shall be construed as a reference to that allowance as increased under this section.

  • (b) As respects any qualifying expenditure incurred on or after the 1st day of April, 1988, any allowance made under section 264 of the Income Tax Act, 1967, and increased under paragraph (a) of this subsection, in respect of that expenditure, whether claimed in one chargeable period or more than one such period, shall not, in the aggregate, exceed—

    • (i) if the qualifying expenditure is incurred before the 1st day of April, 1989, 75 per cent., or

    • (ii) if the qualifying expenditure is incurred on or after the 1st day of April, 1989, 50 per cent.,

    of the amount of that qualifying expenditure.”.

49 Amendment of section 25 (allowance for expenditure on multi-storey car-parks) of Finance Act, 1981.

49.—Section 25 (as amended by section 51 of the Finance Act, 1986) of the Finance Act, 1981, is hereby amended by the substitution in subsection (1) of “1991” for “1988”.

50 Continuation of certain allowances.

50.—The provisions (inserted by the Corporation Tax Act, 1976, and amended by section 20 of the Finance Act, 1985) of the Income Tax Act, 1967, specified in the Table to this section shall have effect as if the references to the 1st day of April, 1988 (as provided for in section 20 of the Finance Act, 1985) were references to the 1st day of April, 1991.

TABLE

Subsection (2A) (a) of section 254 (industrial building allowance),

Paragraph (ii) of the proviso to subsection (1) and paragraph (ii) of the proviso to subsection (3) of section 264 (annual allowances),

Paragraph (iii) of the proviso to subsection (1) of section 265 (balancing allowances and balancing charges).

51 Application of certain allowances in relation to certain areas and certain expenditure.

51.—(1) This section applies to—

• (a) machinery or plant or an industrial building provided for use for the purposes of trading operations which are relevant trading operations within the meaning of section 39A (inserted by the Finance Act, 1981) or section 39B (inserted by the Finance Act, 1987) of the Finance Act, 1980;

• (b) a premises which is a qualifying premises, within the meaning of section 42 of the Finance Act, 1986;

• (c) machinery or plant or an industrial building—

• (i) the expenditure on the provision of which was incurred under a binding contract entered into on or before the 27th day of January, 1988, or

• (ii) which is provided for the purposes of a project approved by an industrial development agency on or before the 31st day of December, 1988;

and

• (d) machinery or plant provided before the 1st day of April, 1991, for the purposes of a trade or part of a trade of hotel-keeping carried on in a building or structure or part thereof (including machinery or plant provided by a lessor to a lessee for use in such a trade or part thereof) where a binding contract for the provision of the said building or structure was entered into after the 27th day of January, 1988, and before the 1st day of June, 1988.

• (2) Section 251 (as amended by the Finance Act, 1988) of the Income Tax Act, 1967, shall have effect in relation to capital expenditure incurred on the provision of machinery or plant to which this section applies as if paragraph (bb) of subsection (4) and subsection (7) were deleted and as if “1991” were substituted for “1988” in subsection (4) (d).

• (3) Section 11 (as amended by the Finance Act, 1988) of the Finance Act, 1967, and section 26 (as amended by the Finance Act, 1988) of the Finance Act, 1971, shall have effect in relation to an allowance which falls to be made under section 241 of the Income Tax Act, 1967, for wear and tear of any machinery or plant to which this section applies as if—

• (a) paragraph (b) of subsection (2) of the said section 11, and

• (b) paragraph (b) of subsection (2) of the said section 26,

were deleted.

• (4) Section 254 (as amended by the Finance Act, 1988) of the Income Tax Act, 1967, and section 25 (as amended by the Finance Act, 1988) of the Finance Act, 1978, shall have effect in relation to capital expenditure on the construction of an industrial building or a premises to which this section applies as if—

• (a) subsection (7) of the said section 254, and

• (b) paragraph (b) of subsection (2) of the said section 25,

were deleted.

• (5) Section 265 of the Income Tax Act, 1967, shall have effect as respects the relevant interest in a building or structure to which subsection (1) (d) applies as if section 45 had not been enacted.

• (6) In this section “industrial development agency” means the Industrial Development Authority, Shannon Free Airport Development Company Limited or Údarás na Gaeltachta.

52 Farming.

52.—(1) Section 22 (as amended by section 15 of the Finance Act, 1983) of the Finance Act, 1974, is hereby amended—

• (a) as respects expenditure incurred on or after the 1st day of April, 1989, by the insertion in subsection (2) after “fences” of “roadways, holding yards, drains or land reclamation”, and the said subsection (2) (apart from the proviso) as so amended, is set out in the Table to this subsection,

and

• (b) by the substitution for paragraph (b) in the proviso to subsection (2) of the following paragraph:

• “(b) the maximum farm buildings allowance to be made under this section for any chargeable period—

  • (i) in relation to capital expenditure incurred before the 1st day of April, 1989, shall not exceed three-tenths of that capital expenditure, and

  • (ii) in relation to capital expenditure incurred on or after the 1st day of April, 1989, shall not exceed one-half of that capital expenditure.”.

TABLE

• (2) Where a person to whom this section applies incurs, for the purpose of a trade of farming land occupied by him, any capital expenditure on the construction of farm buildings (excluding a building or part of a building used as a dwelling), fences, roadways, holding yards, drains or land reclamation, or other works, there shall be made to him during a writing-down period of ten years beginning with the chargeable period related to that expenditure, writing-down allowances (in this section referred to as “farm building allowances”) in respect of that expenditure and such allowances shall be made in taxing the trade:

• (2) Section 14 of the Finance Act, 1977, is hereby amended by the insertion in subsection (1) after “the 6th day of April, 1977,” of “and before the 1st day of April, 1989,”.

• (3) Section 26 of the Finance Act, 1980, shall not have effect for any chargeable period commencing after the 5th day of April, 1989.

Chapter VI Pension Fund Levy

53 Pension fund levy.

53.—(1) In this section—

“assets” means, in relation to a scheme, investments, deposits and any other property (including any debt and any contract of assurance) held for the purposes of the scheme, other than excluded assets;

“administrator” means, in relation to a scheme, the trustees or other persons having the management of the assets of the scheme;

“chargeable person” means, in relation to the assets of a scheme—

• (a) where the assets are not contracts of assurance, the administrator in relation to the scheme, and

• (b) where the assets are contracts of assurance, the insurer in relation to such a contract;

“contract of assurance” means any contract of a type described in section 50 (4) of the Corporation Tax Act, 1976;

“excluded assets” means, in relation to a scheme, assets representing—

• (a) the liabilities of a scheme which are attributable to the provision of relevant benefits (within the meaning of section 13 of the Finance Act, 1972) in respect of employees whose employment is exercised wholly outside the State, or

• (b) liabilities under any contract other than a contract in respect of business in class VII of the Annex to Council Directive 79/267/EEC of 5 March 1979⁽¹⁾;

“insurer” means a person who is the holder of an authorisation within the meaning of the Regulations or is the holder of an assurance licence that is deemed by those Regulations to be an authorisation;

“pension fund”, in relation to an insurer, has the same meaning as it has in section 50 (3) of the Corporation Tax Act, 1976;

“the Regulations” means the European Communities (Life Assurance) Regulations, 1984 (S.I. No. 57 of 1984);

“scheme” means a retirement benefits scheme within the meaning of

section 14 of the Finance Act, 1972, or a retirement annuity contract or a trust scheme to which section 235 or section 235A of the Income Tax Act, 1967, applies.

• (2) For the purposes of this section, “the chargeable amount” in relation to any assets shall be an amount determined by the formula

(A × 9) ______ 100	− P

where—

A is the aggregate market value on the 1st day of January, 1988, of the assets, and

P is the total amount of any pensions (including annuities) paid in the year 1988 in respect of liabilities of the scheme represented by any asset included in determining the amount of A:

Provided that, in the case of a chargeable person other than an insurer, the chargeable amount shall be the amount determined by the above formula less—

• (a) the amount of any interest received in the year 1988 (being relevant interest within the meaning of section 31 (1) of the Finance Act, 1986) in respect of any deposit included in determining the amount of A, and

• (b) if it would have the effect of reducing the chargeable amount to nil, £5,000 or such lesser amount as would have that effect.

• (3) For the year 1988, there shall be charged, in accordance with the provisions of this section, on the chargeable person in relation to any assets of a scheme, a levy (hereafter in this section referred to as “the levy”) at the rate of 6 per cent. on the chargeable amount in respect of the assets.

• (4) The chargeable person shall make on or before the 30th day of June, 1989, a return to the Collector-General showing—

• (a) the chargeable amount for the year 1988,

• (b) the amount of the levy chargeable under this section in respect of that amount, and

• (c) any amount paid in accordance with subsection (6) on account of the amount referred to in paragraph (b).

• (5) The amount of the levy required to be included in a return under this section shall be due and payable on the 30th day of June, 1989, and shall be paid by the chargeable person to the Collector-General and the amount of the levy so due shall be payable without the making of an assessment; but the amount of the levy which has become so due and payable may be assessed on the chargeable person if that amount or any part of it is not paid on or before that day.

• (6) Notwithstanding subsection (5), the chargeable person shall pay to the Collector-General on or before the 30th day of November, 1988, an amount on account of the amount of the levy payable for the year 1988 and the amount so payable on account shall be not less than 90 per cent. of the amount of the levy due in accordance with subsection (5) and the amount so paid on account shall be treated as a payment of an equal amount of the levy due in accordance with subsection (5).

• (7) Any amount on account of the levy payable by a chargeable person under subsection (6) shall be so payable without the making of an assessment and the provisions of this section relating to the collection and recovery of the levy shall apply, with any necessary modifications, to the collection and recovery of an amount on account of the levy.

• (8) If it appears to the inspector that there is any amount of the levy payable which ought to have been and has not been included in a return under subsection (4), or if the inspector is dissatisfied with any such return, he may make an assessment on the chargeable person to the best of his judgment to recover any unpaid amount; and any amount of the levy due under an assessment made by virtue of this subsection shall be treated for the purposes of interest on the unpaid levy as having been payable at the time when it would have been payable if a return had been made.

• (9)
• (a) Any amount of the levy assessed on a chargeable person under this section shall be due within one month after the issue of the notice of assessment (unless that amount or any amount treated as an amount on account of it is due earlier under subsection (5) or (6)), subject to any appeal against the assessment, but no such appeal shall affect the date when any amount is due under subsection (5) or (6).

• (b) On the determination of an appeal against an assessment under this section, any amount of the levy overpaid shall be repaid.

• (10)
• (a) All the provisions of the Income Tax Acts relating to—

• (i) assessments to income tax,

• (ii) appeals against such assessments (including the rehearing of appeals and the statement of a case for the opinion of the High Court), and

• (iii) the collection and recovery of income tax,

shall, so far as they are applicable, apply to the assessment, collection and recovery of any amount of the levy.

• (b) Any amount of the levy or amount on account of the levy payable in accordance with this section without the making of an assessment shall carry interest at the rate of 1.25 per cent. for each month or part of a month from the date when the amount becomes due and payable until payment.

• (c) The provisions of subsections (3) to (5) of section 550 of the Income Tax Act, 1967, shall apply in relation to interest payable under paragraph (b) as they apply in relation to interest payable under the said section 550.

• (d) In its application to any amount of the levy charged by any assessment made in accordance with this Chapter, section 550 of the Income Tax Act, 1967, shall have effect with the omission of the proviso to subsection (1) and of subsections (2) and (2A).

• (e) Notwithstanding anything in the Income Tax Acts, the provisions of section 30 of the Finance Act, 1976, shall not apply in relation to any amount of the levy which is charged by an assessment made in accordance with this Chapter.

• (11) Every return for the purposes of this section shall be in a form prescribed by the Revenue Commissioners and shall include a declaration to the effect that it is complete.

• (12) Schedule 15 to the Income Tax Act, 1967, is hereby amended by the insertion in column 2 of “Finance Act, 1988, section 53 (4)”.

• (13) The levy charged by this section shall not be allowed as a deduction or as a credit for the purpose of the computation or charge of any tax or duty under the care and management of the Revenue Commissioners.

• (14) If under this section—

• (a) a chargeable person who is an insurer pays an amount in respect of the levy in relation to a contract of assurance, the amount shall be deemed to be a necessary disbursement from the pension fund of the insurer and the insurer may adjust accordingly any benefits under the contract, and

• (b) a chargeable person who is an administrator pays an amount in respect of the levy in relation to the assets of a scheme, the amount shall be deemed to be a necessary disbursement from those assets and any benefits payable under the scheme may be adjusted accordingly.

PART II Customs and Excise

54 Interpretation (Part II).

54.—In this Part “the Order of 1987” means the Imposition of Duties (No. 285) (Excise Duties) Order, 1987 (S.I. No. 19 of 1987).

55 Tobacco products.

55.—(1) (a) In this section “the Act of 1977” means the Finance (Excise Duty on Tobacco Products) Act, 1977.

• (b) In this section and in the Fourth Schedule “cigarettes”, “cigars”, “hard pressed tobacco”, “other pipe tobacco”, “smoking tobacco”, “chewing tobacco” and “tobacco products” have the same meanings as they have in the Act of 1977, as amended by the Imposition of Duties (No. 243) (Excise Duty on Tobacco Products) Order, 1979 (S.I. No. 296 of 1979), and by this section.

• (2) The Act of 1977 is hereby amended—

• (a) in section 1 (1)—

• (i) by the deletion of the definition of “cavendish or negrohead”, and

• (ii) by the substitution of “sweetened pipe tobacco” for “cavendish or negrohead” in the definitions of “hard pressed tobacco” and “other pipe tobacco”,

and

• (b) in the First Schedule, by the substitution of “Sweetened pipe tobacco” for “Cavendish or negrohead”.

• (3) The duty of excise on tobacco products imposed by section 2 of the Act of 1977 shall, in lieu of the several rates specified in the Schedule to the Order of 1987, be charged, levied and paid, as on and from the 28th day of January, 1988, at the several rates specified in the Fourth Schedule.

56 Hydrocarbons.

56.—(1) In this section “the Order of 1975” means the Imposition of Duties (No. 221) (Excise Duties) Order, 1975 (S.I. No. 307 of 1975).

• (2) The duty of excise on mineral hydrocarbon light oil imposed by paragraph 11 (1) of the Order of 1975 shall, in lieu of the rate specified in paragraph 5 (1) of the Order of 1987, be charged, levied and paid, as on and from the 28th day of January, 1988, at the rate of £29.47 per hectolitre.

• (3)
• (a) For the purposes of this subsection—

• (i) mineral hydrocarbon light oil shall be deemed to be unleaded if it contains not more than 0.013 grammes of lead per litre or, where such oil is delivered for home use before the 1st day of April, 1990, if it contains not more than 0.020 grammes of lead per litre, and

• (ii) the lead content of mineral hydrocarbon light oil shall be established in accordance with the provisions of Council Directive No. 85/210/EEC of 20th March, 1985⁽¹⁾.

• (b) Subject to compliance with such conditions as the Revenue Commissioners may think fit to impose, a rebate of the duty of excise imposed by paragraph 11 (1) of the Order of 1975 on mineral hydrocarbon light oil shall be allowed at the rate of £0.80 per hectolitre in respect of such oil (not being aviation gasoline within the meaning of section 73 of the Finance Act, 1984) which is deemed to be unleaded by virtue of paragraph (a) and on which the said duty is paid on or after the 28th day of January, 1988.

• (4) The duty of excise on hydrocarbon oil imposed by paragraph 12 (1) of the Order of 1975 shall, in lieu of the rate specified in paragraph 5 (2) of the Order of 1987, be charged, levied and paid, as on and from the 28th day of January, 1988, at the rate of £22.31 per hectolitre.

57 Removal of substances mixed with goods liable to excise duty.

57.—(1) This section applies to any goods liable to a duty of excise which are mixed with some other substance or substances for purposes connected with a rebate of excise duty on the said goods or the exemption of the said goods from excise duty.

• (2) Any person who, without the consent in writing of the Revenue Commissioners, removes or attempts to remove or is knowingly concerned in removing or attempting to remove a substance or substances mentioned in subsection (1) from goods to which this section applies, or knowingly deals in any manner with such goods from which a substance or substances mentioned in subsection (1) has or have, without the consent aforesaid, been removed, shall be guilty of an offence.

• (3) A person guilty of an offence under subsection (2) shall be liable—

• (a) on summary conviction, to an excise penalty not exceeding £1,000 or, at the discretion of the court, to imprisonment for a term not exceeding 12 months or to both, or

• (b) on conviction on indictment, to an excise penalty not exceeding £10,000 or, at the discretion of the court, to imprisonment for a term not exceeding 5 years or to both.

• (4) Section 13 of the Criminal Procedure Act, 1967, as amended by section 17 of the Criminal Justice Act, 1984, shall apply in relation to an offence under subsection (2) as if the references in subsection (3) (a) of the said section 13 to a fine were references to an excise penalty.

• (5) Where an offence under subsection (2) is committed by a body corporate and the offence is shown to have been committed with the consent or connivance of any person who, when the offence was committed, was a director, manager, secretary or other officer of the body corporate, or a member of the committee of management or other controlling authority of the body corporate, that person shall also be deemed to be guilty of the offence and may be proceeded against and punished accordingly.

58 Confirmation of an Order.

58.—The Imposition of Duties (No. 287) (Excise Duty on Table Waters) Order, 1987 (S.I. No. 338 of 1987), is hereby confirmed.

PART III Value-Added Tax

59 Interpretation (Part III).

59.—In this Part “the Principal Act” means the Value-Added Tax Act, 1972.

60 Amendment of section 1 (interpretation) of Principal Act.

60.—Section 1 (2) of the Principal Act is hereby amended by the insertion after paragraph (b) of the following:

• “(bb) money due to the person which, in accordance with the provisions of section 73 of the Finance Act, 1988, is paid to the Revenue Commissioners by another person and has thereby ceased to be due to the person by that other person, and”.

61 Amendment of section 11 (rates of tax) of Principal Act.

61.—Section 11 (1) (inserted by the Finance Act, 1985) of the Principal Act is hereby amended—

• (a) by the insertion in paragraph (a) after “in paragraphs (b)” of “, (bb)”,

• (b) by the insertion of the following paragraph after paragraph (b):

• “(bb) 5 per cent. of the amount on which tax is chargeable in relation to the supply of electricity,”, and

• (c) by the substitution in paragraph (d) of “1.4 per cent.” for “1.7 per cent.” (inserted by the Finance Act, 1987).