Taxes Consolidation Act 1997

441 Surcharge on undistributed income of service companies. [CTA76 s162(1) to (6); FA90 s48; FA95 s55(1); FA96 s52(1); FA97 s146(1) and Sch9 PtI par10(9)]

441.—(1) In this section, “service company” means, subject to subsection (2)—

(a) a close company whose business consists of or includes the carrying on of a profession or the provision of professional services,

(b) a close company having or exercising an office or employment, or

(c) a close company whose business consists of or includes the provision of services or facilities of whatever nature to or for—

(i) a company within either of the categories referred to in paragraphs (a) and (b),

(ii) an individual who carries on a profession,

(iii) a partnership which carries on a profession,

(iv) a person who has or exercises an office or employment, or

(v) a person or partnership connected with any person or partnership referred to in subparagraphs (i) to (iv);

but the provision by a close company of services or facilities to or for a person or partnership not connected with the company shall be disregarded for the purposes of this paragraph.

(2) Where the principal part of a company's income which is chargeable to corporation tax under Cases I and II of Schedule D and Schedule E is not derived from—

(a) carrying on a profession,

(b) providing professional services,

(c) having or exercising an office or employment,

(d) providing services or facilities (other than providing services or facilities to or for a person or partnership not connected with the company) to or for any person or partnership referred to in subparagraphs (i) to (v) of subsection (1)(c), or

(e) any 2 or more of the activities specified in paragraphs (a) to (d),

the company shall be deemed not to be a service company.

(3) For the purposes of this section—

(a) a partnership shall be treated as connected with a company or individual (and a company or individual shall be treated as connected with a partnership) if any one of the partners in the partnership is connected with the company or individual, and

(b) a partnership shall be treated as connected with another partnership if any one of the partners in the partnership is connected with any one of the partners in the other partnership.

(4) (a) Where for an accounting period of a service company the aggregate of—

(i) 50 per cent of the distributable income, and

(ii) 50 per cent of the aggregate of the distributable investment income and the distributable estate income,

exceeds the distributions of the company for the accounting period, there shall be charged on the company an additional duty of corporation tax (in this section referred to as a “surcharge”) amounting to 15 per cent of the excess.

(b) Notwithstanding paragraph (a)—

(i) a surcharge shall not be made on a company where the excess is equal to or less than the lesser of the following amounts—

(I) £500 or, if the accounting period is less than 12 months, £500 proportionately reduced, and

(II) where the company has one or more associated companies, £500 divided by one plus the number of those associated companies or, if the accounting period is less than 12 months, £500 proportionately reduced divided by one plus the number of those associated companies;

(ii) where the excess is greater than the lesser amount on which by virtue of subparagraph (i) a surcharge would not be made, the amount of the surcharge shall not be greater than a sum equal to 80 per cent of the amount by which the excess is greater than that lesser amount;

(iii) the surcharge shall apply to so much of the excess calculated under this subsection in respect of an accounting period of a company as is not greater than the excess of the aggregate of the distributable investment income and the distributable estate income of the accounting period over the distributions of the company for the accounting period as if the reference in this subsection apart from this subparagraph to 15 per cent were a reference to 20 per cent.

(5) Section 440(1) shall not apply in relation to a service company, but subsections (2) to (7) of section 440 shall apply in relation to a surcharge made under this section as they apply in relation to a surcharge made under section 440 with the substitution in subsections (2) and (3) of section 440 of a reference to subsection (4) of this section for the reference to subsection (1) of that section.

(6) (a) Subsections (2), (3), (6) and (7) of section 434 shall apply for the purposes of this section as they apply for the purposes of section 434 or 440, as the case may be.

(b) For the purposes of this section—

(i) the income of a company for an accounting period shall be its income computed for that period in accordance with section 434(4);

(ii) “distributable income”, “distributable investment income” and “distributable estate income” of a company for an accounting period have the same meanings respectively as in subsections (1) and (5) of section 434 with the substitution for the reference to a trading company in each place where it occurs in subsection (5) of that section of a reference to a service company.

PART 14 Taxation of Companies Engaged in Manufacturing Trades, Certain Trading Operations Carried on in Shannon Airport and Certain Trading Operations Carried on in the Custom House Docks Area

CHAPTER 1 Interpretation and general

442 Interpretation (Part 14). [FA80 s38 and s40; FA90 s40 and s41(6); FA91 s35]

442.—(1) In this Part—

“merchandise” means goods other than goods within the meaning of section 443;

“relevant accounting period” means an accounting period or part of an accounting period of a company ending on or before—

(a) where subsection (11) or (12) of section 443 applies, the 31st day of December, 2000, or

(b) in any other case, the 31st day of December, 2010;

“relief under this Part” means the reduction of corporation tax pro vided for in section 448(2).

(2) For the purposes of this Part, where a part only of an accounting period of a company is a relevant accounting period, all amounts referable to the accounting period shall be apportioned, on the basis of the proportion which the length of the relevant accounting period bears to the length of the accounting period of the company, for the purpose of ascertaining any amount required to be taken into account in respect of the relevant accounting period.

443 Meaning of “goods”. [FA80 s39; FA81 s17(a); FA84 s45(b); FA87 s28(3), s29 and s31; S.I. No. 61 of 1988; FA90 s41(1); FA91 s32(1); FA92 s47; FA93 s44(1) and s47(3); FA94 s48(1); FA97 s146(1) and Sch9 PtI par11(1)]

443.—(1) (a) In this Part, “goods” means, subject to this section, goods manufactured in the State in the course of a trade by the company which, in relation to the relevant accounting period, is the company claiming relief under this Part in relation to the trade.

(b) Where—

(i) there are 2 companies one of which manufactures goods and the other of which sells the goods in the course of its trade, and

(ii) one of the companies is a 90 per cent subsidiary of the other company or both companies are 90 per cent subsidiaries of a third company,

any goods manufactured in the State by one of the companies shall, when sold in the course of its trade by the other company, be deemed to have been manufactured in the State by that other company.

(c) Sections 412 to 417 shall apply for the purposes of paragraph (b)(ii) as they apply for the purposes of Chapter 5 of Part 12.

(2) The definition of “goods” shall include fish produced in the State on a fish farm in the course of a trade by the company which, in relation to the relevant accounting period, is the company claiming relief under this Part in relation to the trade, and references in this Part to manufactured shall be construed, in relation to fish, as including references to produced and cognate words shall be construed accordingly.

(3) The definition of “goods” shall include plants cultivated in the State, by the process of plant biotechnology known as “micro-propagation” or “plant cloning”, in the course of a trade by the company which, in relation to the relevant accounting period, is the company claiming relief under this Part in relation to the trade, and references in this Part to manufactured shall be construed, in relation to such plants, as including references to cultivated and cognate words shall be construed accordingly.

(4) The definition of “goods” shall include—

(a) meat processed in the State in an establishment approved and inspected in accordance with the European Communities (Fresh Meat) Regulations, 1987 (S.I. No. 284 of 1987), and

(b) subject to subsections (5) and (6)(a)(iii), fish which has been subjected to a process of manufacture in the State,

in the course of a trade by the company which, in the relevant accounting period, is the company claiming relief under this Part in relation to the trade, and references in this Part to manufactured and cognate words shall be construed accordingly.

(5) (a) The definition of “goods” shall not include goods sold by retail by the company claiming relief under this Part.

(b) For the purposes of paragraph (a), goods shall be deemed not to be sold by retail if they are sold—

(i) to a person who carries on a trade of selling goods of the class to which the goods so sold to such person belong,

(ii) to a person who uses goods of that class for the purposes of a trade carried on by such person, or

(iii) to a person, other than an individual, who uses goods of that class for the purposes of an undertaking carried on by such person.

(6) Without prejudice to the generality of subsection (1) and subject to subsections (2) to (4) and (8) to (15), goods shall not for the purposes of this section be regarded as manufactured if they are goods which result from a process—

(a) which consists primarily of any one of the following—

(i) dividing (including cutting), purifying, drying, mixing, sorting, packaging, branding, testing or applying any other similar process to a product, produce or material that is acquired in bulk so as to prepare that product, produce or material for sale or distribution, or any combination of such processes,

(ii) applying methods of preservation, pasteurisation or maturation or other similar treatment to any foodstuffs, or any combination of such processes,

(iii) cooking, baking or otherwise preparing food or drink for human consumption which is intended to be consumed, at or about the time it is prepared, whether or not in the building or structure in which it is prepared or whether or not in the building to which it is delivered after being prepared,

(iv) improving or altering any articles or materials without imposing on them a change in their character, or

(v) repairing, refurbishing, reconditioning, restoring or other similar processing of any articles or materials, or any combination of such processes,

or

(b) which, subject to subsection (1)(b), is not carried out by the company claiming relief under this Part.

(7) (a) In this subsection, “the intervention agency” means the Minister for Agriculture and Food, when exercising or performing any power or function conferred on that Minister by regulation 3 of the European Communities (Common Agricultural Policy) (Market Intervention) Regulations, 1973 (S.I. No. 24 of 1973), and any other person when exercising or performing any corresponding power or function in any Member State of the European Communities.

(b) Notwithstanding any other provision of the Tax Acts, the definition of “goods” shall not include goods sold to the intervention agency.

(c) For the purposes of paragraph (b), the sale of goods to a person other than the intervention agency shall be deemed to be a sale to the intervention agency if and to the extent that those goods are ultimately sold to the intervention agency; but the rendering to the intervention agency of services consisting of the subjecting of meat belonging to the agency to a process of manufacture carried out in an establishment specified in subsection (4)(a) shall not be regarded as a sale of goods to the agency.

(8) For the purpose of relief under this Part, in relation to a company that carries on a trade which consists of or includes the repairing of ships—

(a) repairs carried out in the State to a ship shall be regarded as the manufacture in the State of goods, and

(b) any amount receivable in payment for such repairs so carried out shall be regarded as an amount receivable from the sale of goods.

(9) (a) In this subsection, “engineering services” means design and planning services the work on the rendering of which is carried out in the State in connection with chemical, civil, electrical or mechanical engineering works executed outside the territories of the Member States of the European Communities.

(b) For the purpose of relief under this Part, in relation to a company which carries on a trade which consists of or includes the rendering of engineering services—

(i) the rendering in the State of such services shall be regarded as the manufacture in the State of goods, and

(ii) any amount receivable in payment for such services so rendered shall be regarded as an amount receivable from the sale of goods.

(10) (a) In this subsection, “computer services” means one or more of the following—

(i) data processing services,

(ii) software development services, and

(iii) technical or consultancy services relating to either or both services specified in subparagraphs (i) and (ii),

the work on the rendering of which is carried out in the State in the course of a service undertaking in respect of which—

(I) (A) an employment grant was made by the Industrial Development Authority under section 25 of the Industrial Development Act, 1986, or

(B) an employment grant was made by the Industrial Development Agency (Ireland) or Forbairt, as may be appropriate, under section 12(2) of the Industrial Development Act, 1993,

(II) a grant under section 3, or financial assistance under section 4, of the Shannon Free Airport Development Company Limited (Amendment) Act, 1970, was made available by the Shannon Free Airport Development Company Limited, or

(III) financial assistance was made available by Údarás na Gaeltachta under section 10 of the Údarás na Gaeltachta Act, 1979.

(b) For the purposes of relief under this Part, in relation to a company carrying on a trade which consists of or includes the rendering of computer services—

(i) the rendering of the computer services shall be regarded as the manufacture in the State of goods, and

(ii) any amount receivable in payment for the rendering of the computer services shall be regarded as an amount receivable from the sale of goods.

(11) (a) In this subsection, “qualifying shipping activities” and “qualifying shipping trade” have the same meanings respectively as in section 407.

(b) For the purposes of relief under this Part, in relation to a company carrying on a qualifying shipping trade—

(i) qualifying shipping activities carried on in the course of the qualifying shipping trade shall be regarded as the manufacture in the State of goods, and

(ii) any amount receivable from the carrying on of qualifying shipping activities shall be regarded as an amount receivable from the sale of goods.

(12) (a) In this subsection—

“export goods” means goods which, in relation to the manufacturer of those goods, are goods for the purposes of this Part and which are exported by a Special Trading House which is not the manufacturer of the goods but which, in relation to the relevant accounting period, is the company claiming relief from tax by virtue of this subsection, where the selling by the Special Trading House of the goods so exported is selling by wholesale;

“selling by wholesale” means selling goods of any class to a person who carries on a business of selling goods of that class or who uses goods of that class for the purposes of a trade or undertaking carried on by such person;

“Special Trading House” means a company which exists solely for the purpose of carrying on a trade consisting solely of the selling of export goods manufactured by a firm which employs less than 200 persons.

(b) For the purposes of this subsection, goods shall be deemed to be exported when they are transported out of the State in the course of the selling by wholesale of those goods and are not subsequently transported into the State in the course of the selling by wholesale of those goods.

(c) For the purposes of relief under this Part, in relation to a Special Trading House—

(i) export goods when exported in the course of its trade by a Special Trading House shall be deemed to have been manufactured by the Special Trading House, notwithstanding that the manufacturer has claimed, or is entitled to claim, relief under this Part in respect of the sale by it of those goods, and

(ii) any amount receivable by the Special Trading House in payment for the sale of export goods shall be regarded as an amount receivable from the sale of goods.

(d) This subsection shall apply subject to the Export Promotion (Amendment) Act, 1987.

(13) For the purposes of relief under this Part, in relation to a company which carries on a trade, not being a relevant trading operation within the meaning of section 445(7)(a), which consists of or includes the repair or maintenance of aircraft, aircraft engines or components—

(a) such repair or maintenance carried out in the State shall be regarded as the manufacture in the State of goods, and

(b) any amount receivable in payment for such repair or maintenance so carried out shall be regarded as an amount receivable from the sale of goods.

(14) (a) In this subsection, “film” means a film which is produced—

(i) on a commercial basis with a view to the realisation of profit, and

(ii) wholly or principally for exhibition to the public in cinemas or by means of television broadcasting or for training or documentary purposes,

and in respect of which not less than 75 per cent of the work on the production is carried out in the State.

(b) For the purposes of relief under this Part, in relation to a company carrying on a trade which consists of or includes the production of a film—

(i) the production of the film by the company claiming the relief shall be regarded as the manufacture in the State of goods, and

(ii) any amount receivable for that production shall be regarded as an amount receivable from the sale of goods.

(15) For the purposes of relief under this Part, in relation to a company which carries on a trade which consists of or includes the remanufacture and repair of computer equipment or of subassemblies where such equipment or subassemblies were originally manufactured by that company or a connected company—

(a) such remanufacture or repair carried out in the State shall be regarded as the manufacture in the State of goods, and

(b) any amount receivable in payment for such remanufacture or repair so carried out shall be regarded as an amount receivable from the sale of goods.

(16) (a) In this subsection—

“agricultural society” means a society—

(i) in relation to which both the following conditions are satisfied:

(I) the number of the society's members is not less than 50, and

(II) all or a majority of the society's members are persons who are mainly engaged in and derive the principal part of their income from husbandry,

or

(ii) to which a certificate under paragraph (b) relates;

“fishery society” means a society—

(i) in relation to which both the following conditions are satisfied:

(I) the number of the society's members is not less than 20, and

(II) all or a majority of the society's members are persons who are mainly engaged in and derive the principal part of their income from fishing,

or

(ii) to which a certificate under paragraph (c) relates;

“qualifying goods” means goods purchased by a society from its members where such goods, in relation to those members, are or would but for subsection (7) be goods for the purposes of this Part;

“qualifying society” means an agricultural society or a fishery society—

(i) which carries on a trade which consists wholly or mainly of the selling by wholesale of qualifying goods, and

(ii) all or a majority of the members of which are agricultural societies or fishery societies;

“selling by wholesale” means selling goods of any class to a person who carries on a business of selling goods of that class or who uses goods of that class for the purposes of a trade or undertaking carried on by such person;

“society” means a society registered under the Industrial and Provident Societies Acts, 1893 to 1978.

(b) The Minister for Finance may, on the recommendation of the Minister for Agriculture and Food, give a certificate entitling a society to be treated for the purposes of this subsection as an agricultural society notwithstanding that one or both of the conditions in paragraph (i) of the definition of “agricultural society” is or are not complied with in relation to the society.

(c) The Minister for Finance may, on the recommendation of the Minister for the Marine and Natural Resources, give a certificate entitling a society to be treated for the purposes of this subsection as a fishery society notwithstanding that one or both of the conditions in paragraph (i) of the definition of “fishery society” is or are not complied with in relation to the society.

(d) A certificate given under—

(i) paragraph (a) or (b) of section 70(2) of the Finance Act, 1963,

(ii) paragraph (a) or (b) of section 220(2) of the Income Tax Act, 1967, or

(iii) paragraph (a) or (b) of section 18(2) of the Finance Act, 1978,

shall, unless it has been revoked, be deemed to be a certificate given under paragraph (b) or (c), as the case may be.

(e) A certificate given under paragraph (b) or (c)—

(i) shall have effect as from such date, whether before or after the date on which it is given, as may be stated in the certificate, and

(ii) shall be published in Iris Oifigiúil as soon as may be after the certificate is given.

(f) A certificate given under paragraph (b) or (c) may be revoked by the Minister for Finance at any time and notice of any such revocation shall be published as soon as may be in Iris Oifigiúil.

(g) For the purposes of relief under this Part, in relation to a qualifying society—

(i) qualifying goods sold by wholesale in the course of its trade by the qualifying society shall be deemed to have been manufactured by the qualifying society, notwithstanding that the society which manufactured those goods has claimed, or is entitled to claim, relief under this Part in respect of the sale by it of those goods, and

(ii) any amount receivable from the sale of qualifying goods by the qualifying society shall be regarded as an amount receivable from the sale of goods.

(17) (a) In this subsection—

“agricultural society” and “society” have the same meanings respectively as in subsection (16);

“milk product” means butter, whey-butter, cream, cheese, condensed milk, dried or powdered milk, dried or powdered skim-milk, dried or powdered whey, chocolate crumb, casein, butter-oil, lactose, and any other product made wholly or mainly from milk or from a by-product of milk and approved for the purposes of this section by the Minister for Finance after consultation with the Minister for Agriculture and Food;

“qualifying company” means a company to which a certificate under paragraph (c) relates;

“qualifying trade” means a trade carried on by a company which consists wholly or mainly of the manufacture of milk products;

“relevant product” means milk purchased by an agricultural society from its members, being milk sold by the agricultural society to a qualifying company.

(b) For the purposes of this subsection (other than this paragraph), where a trade consists partly of the manufacture of milk products, then, unless the trade consists mainly of the application of a process of pasteurisation to milk, the part of the trade which consists of the manufacture of milk products shall be treated as a separate trade.

(c) Where the Minister for Agriculture and Food is satisfied that a company—

(i) carried on a qualifying trade during the whole of the period of 3 years ending immediately before the day from which the certificate specified subsequently in this paragraph has effect,

(ii) is carrying on a qualifying trade and intends to continue to carry it on for a period which when added to the period for which it has been carrying it on will amount to not less than 3 years, or

(iii) intends to carry on a qualifying trade for a period of not less than 3 years,

that Minister may, after consultation with the Minister for Finance, give a certificate to the company stating that the company may be treated as a qualifying company for the purposes of this subsection, and, whenever such a certificate is given to a company, the company shall be so treated during the period for which the certificate has effect.

(d) A certificate given under paragraph (c)—

(i) shall have effect for the period beginning on such day, whether before or after the day on which it is given, as may be specified in the certificate and ending on the day which is 2 years after that day, and

(ii) may be revoked by the Minister for Agriculture and Food after consultation with the Minister for Finance.

(e) Notice of a revocation under paragraph (d) shall be published as soon as may be in Iris Oifigiúil and the revocation shall have effect as on and from the thirtieth day after the day on which it is so published.

(f) For the purposes of relief under this Part, in relation to the sale by an agricultural society of relevant products—

(i) relevant products shall be deemed to have been manufactured by the agricultural society, and

(ii) any amount receivable from the sale of relevant products by the agricultural society shall be regarded as an amount receivable from the sale of goods.

(18) For the purposes of relief under this Part, in relation to a company to which a profit or loss specified in section 80 arises, the amount of any profit which is deemed by that section to be a profit or gain of the trade carried on by the company shall be regarded as an amount receivable from the sale of goods.

(19) (a) In this subsection, “newspaper” means a newspaper—

(i) the contents of each issue of which consist wholly or mainly, as regards the quantity of printed matter contained in the newspaper, of information on the principal current events and topics of general public interest,

(ii) the format of which is commonly regarded as newspaper format, and

(iii) which is—

(I) printed on newsprint,

(II) intended to be sold to the public, and

(III) normally published at least fortnightly.

(b) For the purposes of relief under this Part, in relation to a company which carries on a trade which consists of or includes the production in the State of a newspaper—

(i) the production of the newspaper (including the rendering of advertising services in the course of the production of the newspaper) by the company shall be regarded as the manufacture in the State of goods, and

(ii) any amount receivable—

(I) from the sale of copies of the newspaper, or

(II) from the rendering by the company of advertising services in the course of the production of the newspaper,

shall be regarded as an amount receivable from the sale of goods.

(20) Subject to subsection (19), for the purposes of this Part, where in a relevant accounting period a company renders advertising services in the course of a trade carried on by it which consists wholly or partly of the production of a newspaper, magazine or other similar product, then—

(a) any amount receivable in payment for the rendering of such services shall not be regarded as an amount receivable from the sale of goods, and

(b) for the purposes of section 448, the company's income from the trade for a relevant accounting period shall be regarded as not derived solely from the sale of goods and merchandise.

(21) For the purpose of relief under this Part, in relation to a company which carries on a trade which consists of or includes the rendering to another person of services by means of subjecting commodities or materials belonging to that person to any process of manufacturing—

(a) the rendering in the State of such services shall be regarded as the manufacture in the State of goods, and

(b) any amount receivable in payment for services so rendered shall be regarded as an amount receivable from the sale of goods.

(22) The inspector may by notice in writing require a company, a Special Trading House (within the meaning of subsection (12)), a qualifying society (within the meaning of subsection (16)) or an agricultural society (within the meaning of subsection (17)), as the case may be, claiming relief from tax by virtue of subsection (8), (9), (10), (11), (12), (13), (14), (15), (16), (17), (18), (19) or (21), as the case may be, to furnish him or her with such information or particulars as may be necessary for the purpose of giving effect to that subsection, and subsection (2) of section 448 shall apply as if the matters of which proof is required by that subsection included the information or particulars specified in a notice under this subsection.

444 Exclusion of mining and construction operations. [FA80 s50]

444.—(1) For the purposes of relief under this Part, income from the sale of goods shall not include income from—

(a) any mining operations for the purpose of obtaining, whether by underground or surface working, any scheduled mineral, mineral compound or mineral substance (within the meaning of section 2 of the Minerals Development Act, 1940), or

(b) any construction operations (within the meaning of Chapter 2 of Part 18).

(2) Where a company carries on a trade which consists of or includes the manufacture of goods and—

(a) in the course of the trade, it carries on any mining operations (within the meaning of subsection (1)(a)) from which it obtains any scheduled mineral, mineral compound or mineral substance of the kind referred to in that subsection, and

(b) any such mineral, mineral compound or mineral substance is not sold by the company in the course of the trade but forms the whole or part of the materials used in the manufacture of such goods or is to any extent incorporated in the goods in the course of their manufacture,

then, part of the income which apart from this subsection would be income from the sale of goods for the purposes of section 448 shall be deemed for the purposes of subsection (1) to be income from such mining operations, and that part shall be such amount as appears to the inspector or on appeal to the Appeal Commissioners to be just and reasonable.

(3) Where the amount receivable from a sale of goods includes consideration for the carrying out in relation to those goods of any construction operations (within the meaning of Chapter 2 of Part 18), then, part of the income which apart from this subsection would be income from the sale of goods for the purposes of section 448 shall be deemed for the purposes of subsection (1) to be income from such construction operations, and that part shall be such amount as appears to the inspector or on appeal to the Appeal Commissioners to be just and reasonable.

445 Certain trading operations carried on in Shannon Airport. [FA80 s39A(1) to (7) and (10); FA81 s17(b); FA86 s56(2); FA88 s35; FA91 s33; FA92 s52; FA96 s53]

445.—(1) In this section—

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

“company” means any company carrying on a trade;

“the Minister” means the Minister for Finance;

“qualified company” means a company the whole or part of the trade of which is carried on in the airport;

“relevant trading operations” means trading operations specified in a certificate given by the Minister under subsection (2);

“trading operation” means any trading operation which apart from this section and section 443(13) is not the manufacture of goods for the purpose of this Part but is carried on by a qualified company.

(2) Subject to subsections (7) and (8), the Minister may give a certificate certifying that such trading operations of a qualified company as are specified in the certificate are, with effect from a date specified in the certificate, relevant trading operations for the purpose of this section, and any certificate so given shall, unless it is revoked under subsection (4), (5) or (6), remain in force until the 31st day of December, 2005.

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

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

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

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

the Minister may, by notice in writing served by registered post on the company, revoke the certificate with effect from such date as may be specified in the notice.

(5) Where, in the case of a company in relation to which a certificate under subsection (2) has been given, the Minister is of the opinion that any activity of the company has had, or may have, an adverse effect on the use or development of the airport or is otherwise inimical to the development of the airport, then—

(a) the Minister may, by notice in writing served by registered post on the company, require the company to desist from such activity with effect from such date as may be specified in the notice, and

(b) if the Minister is not satisfied that the company has complied with the requirements of that notice, the Minister may, by a further notice in writing served by registered post on the company, revoke the certificate with effect from such date as may be specified in the further notice.

(6) Where the Minister and a company in relation to which a certificate under subsection (2) has been given agree to the revocation of that certificate and its replacement by another certificate to be given to the company under subsection (2), the Minister may, by notice in writing served by registered post on the company, revoke the first-mentioned certificate with effect from such date as may be specified in the notice; but this subsection shall not affect the operation of subsection (4) or (5).

(7) The Minister shall not certify under subsection (2) that a trading operation is a relevant trading operation unless it is carried on in the airport and is within one or more of the following classes of trading operations—

(a) the repair or maintenance of aircraft,

(b) trading operations in relation to which the Minister is of the opinion, after consultation with the Minister for Public Enterprise, that they contribute to the use or development of the airport, or

(c) trading operations ancillary to any of those operations described in paragraph (a) or (b) or to any operations consisting apart from this section of the manufacture of goods.

(8) The Minister shall not certify under subsection (2) that any of the following trading operations is a relevant trading operation—

(a) the rendering of—

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

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

(b) the operation of a scheduled air transport service,

(c) selling by retail, otherwise than by mail order or other distance selling, which satisfies the requirement of subsection (7)(b),

(d) the sale of consumable commodities for the fuelling of aircraft or for shipment as aircraft stores.

(9) For the purposes of relief under this Part, in the case of a qualified company carrying on relevant trading operations—

(a) the relevant trading operations shall be regarded as the manufacture in the State of goods, and

(b) any amount receivable in payment for anything sold, or any services rendered, in the course of the relevant trading operations shall be regarded as an amount receivable from the sale of goods.

(10) The inspector may by notice in writing require a company claiming relief from tax by virtue of this section to furnish him or her with such information or particulars as may be necessary for the purpose of giving effect to this section, and subsection (2) of section 448 shall apply as if the matters of which proof is required by that subsection included the information or particulars specified in a notice under this section.

446 Certain trading operations carried on in Custom House Docks Area. [FA80 s39B(1) to (6), (7)(a) and (b), (8) and (9); FA87 s30; FA91 s34; FA92 s53; FA94 s53; FA95 s65; FA97 s28]

446.—(1) In this section—

“the Area” means, subject to subsection (12), the Custom House Docks Area within the meaning of section 322;

“company” means any company carrying on a trade;

“the Minister” means the Minister for Finance;

“qualified company” means a company to which the Minister has given a certificate under subsection (2);

“relevant trading operations” means trading operations specified in a certificate given by the Minister under subsection (2);

“trading operation” means any trading operation which apart from this section is not the manufacture of goods for the purposes of this Part.

(2) Subject to subsections (7) and (9), the Minister may give a certificate certifying that such trading operations of a company as are specified in the certificate are, with effect from a date specified in the certificate, relevant trading operations for the purposes of this section, and any certificate so given shall, unless it is revoked under subsection (4), (5) or (6), remain in force until the 31st day of December, 2005.

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

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

(a) the trade of the company ceases or, except in the case of a company in relation to which the Minister has, in accordance with subsection (9), given a certificate under subsection (2) and which has not yet commenced to carry on in the Area the trading operation or trading operations specified in the certificate, becomes carried on wholly outside the Area, or

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

the Minister may, by notice in writing served by registered post on the company, revoke the certificate with effect from such date as may be specified in the notice.

(5) Where, in the case of a company in relation to which a certificate under subsection (2) has been given, the Minister is of the opinion that any activity of the company has had, or may have, an adverse effect on the use or development of the Area or is otherwise inimical to the development of the Area, then—

(a) the Minister may, by notice in writing served by registered post on the company, require the company to desist from such activity with effect from such date as may be specified in the notice, and

(b) if the Minister is not satisfied that the company has complied with the requirements of that notice, the Minister may, by a further notice in writing served by registered post on the company, revoke the certificate with effect from such date as may be specified in the further notice.

(6) Where the Minister and a company in relation to which a certificate under subsection (2) has been given agree to the revocation of that certificate and its replacement by another certificate to be given to the company under subsection (2), the Minister may, by notice in writing served by registered post on the company, revoke the first-mentioned certificate with effect from such date as may be specified in the notice; but this subsection shall not affect the operation of subsection (4) or (5).

(7) Subject to subsection (9), the Minister shall not certify under subsection (2) that a trading operation is a relevant trading operation unless—

(a) it is carried on in the Area,

(b) the Minister is satisfied that it will contribute to the development of the Area as an International Financial Services Centre, and

(c) it is within one or more of the following classes of trading operations—

(i) the provision for persons not ordinarily resident in the State of services, in relation to transactions in foreign currencies, which are of a type normally provided by a bank in the ordinary course of its trade,

(ii) the carrying on on behalf of persons not ordinarily resident in the State of international financial activities, including in particular—

(I) global money-management,

(II) international dealings in foreign currencies and in futures, options and similar financial assets which are denominated in foreign currencies,

(III) dealings in bonds, equities and similar instruments which are denominated in foreign currencies,

(IV) insurance and related activities, or

(V) the management of the whole or part of the investments and other activities of a specified collective investment undertaking (within the meaning of section 734),

(iii) the provision for persons not ordinarily resident in the State of services of, or facilities for, processing, control, accounting, communication, clearing, settlement or information storage in relation to financial activities,

(iv) dealing by a company in commodity futures or commodity options on behalf of persons not ordinarily resident in the State—

(I) other than on behalf of persons who—

(A) 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

(B) would be regarded as connected with a person who carries on such a trade,

or

(II) where dealing in futures and options, some or all of which are commodity futures or commodity options, as the case may be, is the principal relevant trading operation carried on by the company,

(v) the development or supply of computer software for use in the provision of services or facilities of a type referred to in subparagraph (iii) or for the reprocessing, analysing or similar treatment of information in relation to financial activities, or

(vi) trading operations similar to or ancillary to any of those operations described in the preceding provisions of this section in relation to which the Minister is of the opinion that they contribute to the use of the Area as an International Financial Services Centre.

(8) References in subsection (7) to any service or facility provided for, or any activity carried on on behalf of, a person not ordinarily resident in the State shall not include any such service or facility provided for, or any activity carried on on behalf of, the whole or any part of a trade carried on by that person in the State.

(9) Where the Minister would have certified a trading operation under subsection (2) but for the fact that the condition specified in subsection (7)(a) was not satisfied as respects the trading operation, the Minister may, notwithstanding that such condition is not satisfied, certify the trading operation under subsection (2) if the Minister is satisfied that—

(a) the trading operation is not carried on in the Area due to circumstances outside the control of the company carrying on the trading operation, and

(b) such company intends to carry on, and will commence to carry on, the trading operation in the Area within such period of time as the Minister may specify under subsection (3) as a condition subject to which the Minister gives the certificate under subsection (2) in respect of the trading operation.

(10) For the purpose of relief under this Part, in the case of a qualified company carrying on relevant trading operations—

(a) the relevant trading operations shall be regarded as the manufacture in the State of goods, and

(b) any amount receivable in payment for anything sold, or any services rendered, in the course of the relevant trading operations shall be regarded as an amount receivable from the sale of goods.

(11) The inspector may by notice in writing require a company claiming relief from tax by virtue of this section to furnish him or her with such information or particulars as may be necessary for the purpose of giving effect to this section, and subsection (2) of section 448 shall apply as if the matters of which proof is required by that subsection included the information or particulars specified in a notice under this section.

(12) (a) For the purposes of this section, the Minister for Finance, after consultation with the Minister for the Environment and Local Government, may, by order direct that the definition of “the Custom House Docks Area” in section 322 shall include such area or areas described in the order which but for the order would not be included in that definition and, where the Minister for Finance so orders, the definition of “the Custom House Docks Area” in that section shall for the purposes of this section be deemed to include that area or those areas.

(b) The Minister for Finance may, for the purposes of making an order under this section and an order under section 322, exercise the powers to make those orders by making one order for the purposes of both of those sections.

(c) The Minister for Finance may make orders for the purpose of this section and any order made under this section shall be laid before Dáil Éireann as soon as may be after it is made and, if a resolution annulling the order is passed by Dáil Éireann within the next 21 days on which Dáil Éireann has sat after the order is laid before it, the order shall be annulled accordingly, but without prejudice to the validity of anything previously done thereunder.

447 Appeals. [FA80 s51]

447.—An appeal to the Appeal Commissioners shall lie on any question arising under this Part in the like manner as an appeal would lie against an assessment to corporation tax, and the provisions of the Tax Acts relating to appeals shall apply accordingly.

CHAPTER 2 Principal provisions

448 Relief from corporation tax. [FA80 s41(1) to (5) and (8) to (9); FA92 s54; F(No.2)A92 s1; FA94 s54(b); FA95 s61; FA97 s59(2) and Sch6 PtII par1(1) and (2)]

448.—(1) (a) For the purposes of this section, “relevant corporation tax” means the corporation tax which, apart from this section, sections 157, 158, 239, 241, 440, 441, 442 and 827 and paragraphs 16 and 18 of Schedule 32, would be chargeable for the relevant accounting period exclusive of the corporation tax chargeable on the part of the company's profits attributable to chargeable gains for that period.

(b) For the purposes of paragraph (a), the part of the company's profits attributable to chargeable gains for the relevant accounting period 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.

(2) (a) Subject to paragraph (b), where a company which carries on a trade which consists of or includes the manufacture of goods claims and proves as respects a relevant accounting period that during that period any amount was receivable in respect of the sale in the course of the trade of goods, corporation tax payable by the company for that period, in so far as it is referable to the income from the sale of those goods, shall be reduced by twenty-six thirty-sixths, and the corporation tax referable to the income from the sale of those goods shall be such an amount as bears to the relevant corporation tax the same proportion as the income from the sale of those goods bears to the total income brought into charge to corporation tax for the relevant accounting period.

(b) Where a company which carries on a trade which consists of or includes the manufacture of goods claims and proves as respects a relevant accounting period (being an accounting period beginning before the 1st day of April, 1997, and ending on or after that date) that during that period any amount was receivable in respect of the sale in the course of the trade of goods, corporation tax payable by the company for that period, in so far as it is referable to the income from the sale of those goods, shall be reduced—

(i) by twenty-eight thirty-eighths, in so far as it is corporation tax charged on profits which under section 26(3) are apportioned to the period beginning on the 1st day of January, 1996, and ending on the 31st day of March, 1997, and

(ii) by twenty-six thirty-sixths, in so far as it is corporation tax charged on profits which under section 26(3) are apportioned to the period beginning on the 1st day of April, 1997, and ending on the 31st day of December, 1998,

and the corporation tax referable to the income from the sale of those goods—

(I) shall, for the purposes of subparagraph (i), be such an amount as bears to the part of the relevant corporation tax charged on profits which under section 26(3) are apportioned to the period beginning on the 1st day of January, 1996, and ending on the 31st day of March, 1997, the same proportion as the income from the sale of those goods bears to the total income brought into charge to corporation tax for the relevant accounting period, and

(II) shall, for the purposes of subparagraph (ii), be such an amount as bears to the part of the relevant corporation tax charged on profits which under section 26(3) are apportioned to the period beginning on the 1st day of April, 1997, and ending on the 31st day of December, 1998, the same proportion as the income from the sale of those goods bears to the total income brought into charge to corporation tax for the relevant accounting period.

(3) For the purposes of subsection (2), “the income from the sale of those goods” shall be taken to be such sum as bears to 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 the same proportion as the amount receivable by the company in the relevant accounting period from the sale in the course of the trade of goods bears to the total amount receivable by the company in the relevant accounting period from the sale in the course of the trade of goods and merchandise.

(4) For the purposes of subsection (3), “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—

(a) in any case where the income from the trade is derived solely from sales of goods and merchandise, the amount of the company's income from the trade, and

(b) in any other case, such amount of the income from the trade as appears to the inspector or on appeal to the Appeal Commissioners to be just and reasonable.

(5) (a) For the purposes of this Part, the amount receivable by a company in a relevant accounting period from the sale of goods or merchandise—

(i) shall be deemed to be reduced by the amount of any duty paid or payable by the company in respect of the goods or merchandise or in respect of the materials used in their manufacture, and

(ii) shall not include any amount in respect of value-added tax chargeable on the sale of the goods or merchandise.

(b) The inspector may by notice in writing require a company making a claim for relief under this Part to furnish him or her with such information or particulars as may be necessary for the purposes of giving effect to this subsection, and subsection (2) shall apply as if the matters of which proof is required by that subsection included the information or particulars specified in a notice under this subsection.

(6) A company shall not be entitled to relief under this Part in relation to a trade as respects a relevant accounting period unless it makes a claim for the relief under subsection (2) before the date on which the assessment for the accounting period which coincides with or includes that relevant accounting period becomes final and conclusive.

(7) (a) In this subsection—

“the airport” and “the Area” have the same meanings respectively as in sections 445 and 446;

“the Minister” means the Minister for Finance;

“qualified company” includes, subject to paragraph (i), a company which has not carried on trading operations in the Area or the airport and which intends to carry on trading operations which will be relevant trading operations;

“relevant subsection” means subsection (2) of section 445 or subsection (2) of section 446, as the case may be;

“relevant taxation”, in relation to an investor or a qualified company, means any tax imposed under the laws of any state by reason of the relief.

(b) Notwithstanding any other provision of this section but subject to paragraph (c), where the Minister is satisfied that the conditions specified in paragraph (d) are met, the Minister may by notice in writing given to a qualified company reduce the fraction (in this subsection referred to as “the relief”) by which corporation tax payable, in so far as it is referable to income from relevant trading operations, is to be, or but for this subsection would be, reduced under subsection (2) by specifying in the notice such lower fraction (in this subsection referred to as “the revised relief”) as the Minister deems appropriate by which that corporation tax is to be reduced.

(c) The reduction of the relief so as to determine the revised relief shall be no greater than is necessary to secure the result specified in paragraph (d)(iv).

(d) The conditions referred to in paragraph (b) are that—

(i) some or all of the shares in the qualified company are owned directly or indirectly (within the meaning of section 9) by a company or companies (in this subsection referred to as “the investors”) resident outside the State, or the qualified company is resident outside the State and is trading in the State through a branch or agency,

(ii) the qualified company (in this subparagraph referred to as the “first-mentioned qualified company”) is carrying on, or is about to carry on, a trade in the State which includes or consists of relevant trading operations and with levels of activity and employment in the State in relation to those operations either in the first-mentioned qualified company, or in another qualified company with which the first-mentioned qualified company has entered into an agreement in order to carry on such operations, which, having regard to the certificate issued or to be issued to the first-mentioned qualified company or the other qualified company, as the case may be, under the relevant subsection, are substantial and contribute, or will contribute, to the development of the Area as an International Financial Services Centre, or to the development of the airport, as the case may be,

(iii) the manner in which the investors or the qualified company, as the case may be, would but for this subsection be subject to relevant taxation in respect of income from relevant trading operations would result in the qualified company ceasing to carry on relevant trading operations carried on by it, or not carrying on relevant trading operations, as the case may be, in the State, and

(iv) the revised relief would ensure that all or a substantial part of the relevant trading operations of the qualified company will continue to be carried on, or will be carried on, as the case may be, in the State to an extent that they will continue to contribute, or will contribute, to the development of the Area as an International Financial Services Centre, or to the development of the airport, as the case may be.

(e) Where the Minister has given a notice pursuant to paragraph (b), subsection (2) shall apply as if the revised relief were substituted for the relief.

(f) Notwithstanding any other provision of this section, the Minister may, subject to paragraph (c), by notice given in writing to the qualified company—

(i) increase or decrease the revised relief specified in a preceding notice given to the qualified company under this subsection, or

(ii) reinstate the relief,

and, where the Minister has given such notice, paragraph (e) shall apply as if the revised relief specified in the notice given under paragraph (b) were the revised relief specified under this paragraph or the relief shall be reinstated, as the case may be.

(g) A notice given by the Minister under this subsection specifying a revised relief or an increase or decrease in such revised relief or a reinstatement of the relief shall have effect from the date specified in the notice which may be a date preceding the date on which the notice is given.

(h) Subject to paragraph (i), this subsection shall be construed together with sections 445 and 446.

(i) In so far as this subsection is to be construed together with section 445, it shall be so construed only in so far as the relevant trading operations carried on by a qualified company within the meaning of that section are trading operations which could be certified by the Minister as relevant trading operations for the purposes of section 446 if they were carried on in the Area rather than the airport.

449 Credit for foreign tax not otherwise credited. [FA80 s39C; FA94 s54(a); FA95 s63]

449.—(1) In this section—

“an amount receivable from the sale of goods” means an amount which—

(a) being an amount receivable from the sale of computer software, or

(b) by virtue of section 443(10)(b)(ii), 445(9)(b) or 446(10)(b),

is regarded as receivable from the sale of goods for the purposes of relief under this Part;

“relevant foreign tax”, where borne by a company in respect of an amount receivable from the sale of goods, means tax—

(a) which under the laws of any foreign territory has been deducted from that amount,

(b) which corresponds to income tax or corporation tax,

(c) which has not been repaid to the company, and

(d) for which credit is not allowable under arrangements within the meaning of Schedule 24;

“the total amount receivable from the sale of goods”, in relation to a company in the course of a trade in a relevant accounting period, means the aggregate of amounts, receivable by the company in the course of the trade in the relevant accounting period, which are regarded by virtue of this Part as receivable from the sale of goods for the purposes of relief under this Part.

(2) For the purposes of this section—

(a) the amount of the corporation tax which apart from subsection (3) would be payable by a company and which is attributable to an amount receivable from the sale of goods shall be an amount equal to 10 per cent of the amount of the income of the company referable to the amount so receivable;

(b) the amount of any income of a company referable to an amount receivable from the sale of goods in the course of a trade in a relevant accounting period shall, subject to paragraph 4(5) of Schedule 24, be taken to be such sum as bears to the total amount of the income of the company from the sale of goods in the course of the trade for the relevant accounting period the same proportion as the amount receivable from the sale of goods bears to the total amount receivable by the company from the sale of goods in the course of the trade in the relevant accounting period;

(c) the total amount of income of a company from the sale of goods in the course of a trade in a relevant accounting period shall be taken to be the sum referred to in subsection (3) of section 448, which for the purposes of subsection (2) of that section is to be taken to be the income of the trade for the relevant accounting period referred to in the expression “the income from the sale of those goods” in subsection (2) of that section.

(3) The amount of corporation tax which apart from this subsection would be payable by a company for a relevant accounting period shall be reduced by so much of nine-tenths of any relevant foreign tax borne by the company in respect of an amount receivable from the sale of goods in that period in the course of a trade as does not exceed the corporation tax which would be so payable and which is attributable to the amount receivable from the sale of goods.

(4) Where as respects a relevant accounting period corporation tax payable by a company is by virtue of section 448(7) reduced by a fraction (referred to in that section as “the revised relief”), then, in computing the reduction, if any, under subsection (3) of corporation tax payable by the company for the relevant accounting period, being corporation tax attributable to an amount receivable from the sale of goods which is an amount receivable in the course of relevant trading operations (within the meaning of section 446), this section shall apply as if—

(a) the reference in subsection (2)(a) to 10 per cent were a reference to a rate per cent determined by the formula—

C(1D)

where—

C is the rate per cent of corporation tax specified in section 21(1) for the financial year in which the relevant accounting period ends, and

D is the fraction referred to in section 448(7) as “the revised relief”,

and

(b) the reference in subsection (3) to nine-tenths were a reference to a fraction determined by the formula—

100 [C (1 D)] ____ 100

where C and D have the same meanings as in paragraph (a).

450 Double taxation relief. [FA80 s39D; FA95 s62]

450.—(1) (a) In this section—

“appropriate inspector”, “chargeable period” and “specified return date for the chargeable period” have the same meanings respectively as in Part 41;

“arrangements” and “foreign tax” have the same meanings respectively as in paragraph 1(1) of Schedule 24;

“credit institution” means an undertaking whose business it is to receive deposits or other repayable funds from the public and to grant credit on its own account;

“group relevant payment” means a relevant payment made to a relevant company by a company related to the relevant company;

“qualified company” and “relevant trading operations” have, subject to paragraph (e), the same meanings respectively as in section 446;

“relevant company” means a qualified company, other than a credit institution or a 25 per cent subsidiary of a credit institution, the relevant trading operations of which—

(i) are wholly carried on by persons—

(I) who are employees of the qualified company or a company related to it and who are not employees of any employer other than the qualified company or the company related to it, as the case may be, and

(II) in respect of whom there does not exist any understanding or arrangement the purpose of which, or one of the purposes of which, is to provide for the engagement of the services of those persons, whether as employees or otherwise, should they cease to be employed by the qualified company or the company related to it, as the case may be,

and

(ii) are not managed or directed, whether directly or indirectly, by another qualified company other than a company related to the first-mentioned qualified company;

“relevant foreign tax” means so much of the amount of foreign tax as—

(i) has been deducted from relevant payments,

(ii) would have been so deducted if the laws of the territory under which the tax was deducted prohibited the deduction of tax from such payments at a rate in excess of 10 per cent, and

(iii) has not been repaid;

“relevant payment” means a payment of interest which—

(i) arises from a source within a territory in regard to which arrangements have the force of law, and

(ii) is regarded, subject to paragraph (e), by virtue of section 446(10)(b) as receivable by a relevant company from the sale of goods for the purposes of relief under this Part.

(b) For the purposes of this section, a company shall be treated as related to another company at any relevant time if at that time one of the 2 companies is a 25 per cent subsidiary of the other company, or both companies are 25 per cent subsidiaries of the same company.

(c) For the purposes of paragraph (b), a company (in this paragraph referred to as “the subsidiary company”) shall not be deemed to be a 25 per cent subsidiary of another company (in this paragraph referred to as “the parent company”) at any time if the percentage—

(i) of any profits, which are available for distribution to equity holders, of the subsidiary company at such time to which the parent company is beneficially entitled at such time, or

(ii) of any assets, which are available for distribution to equity holders on a winding up, of the subsidiary company at such time to which the parent company would be beneficially entitled at such time on a winding up of the subsidiary company,

is less than 25 per cent of such profits or assets, as the case may be, of the subsidiary company at such time, and sections 413, 414, 415 and 418 shall, with any necessary modifications but without regard to section 411(1)(c) in so far as it relates to those sections, apply to the determination of the percentage of those profits or assets, as the case may be, to which a company is beneficially entitled as they apply to the determination for the purposes of Chapter 5 of Part 12 of the percentage of any such profits or assets to which a company is so entitled.

(d) For the purposes of this section, a company shall be deemed to be a 25 per cent subsidiary of another company if and so long as not less than 25 per cent of its ordinary share capital would be treated as owned directly or indirectly by that other company if section 9 (other than subsection (1) of that section) were to apply for the purposes of this paragraph, and, where a company (in this paragraph referred to as “that company”) would be treated for the purposes of this section as a 25 per cent subsidiary of a credit institution which is not a company, if the credit institution were a company, that company shall be so treated for those purposes.

(e) For the purpose of this section apart from this paragraph—

(i) a payment made to a company in the course of relevant trading operations (within the meaning of section 445), being a payment which is regarded by virtue of section 445 (9)(b) as receivable from the sale of goods for the purposes of relief under this Part, shall be treated as so regarded by virtue of section 446(10)(b), and

(ii) if the company is a qualified company carrying on relevant trading operations (within the meaning of section 445), it shall be treated as being a qualified company carrying on relevant trading operations (within the meaning of section 446),

so long as the relevant trading operations (within the meaning of section 445) could be certified by the Minister for Finance as relevant trading operations for the purposes of section 446 if they were carried on in the Area (within the meaning of section 446) rather than in the airport (within the meaning of section 445).

(2) Notwithstanding paragraph 4 of Schedule 24 but subject to subsection (3), where a relevant company elects to have the amount of the credit, which is to be allowed to the company in respect of foreign tax deducted from group relevant payments made to the company in a relevant accounting period, computed as if, for the purposes of paragraph 4 of Schedule 24, the amount of the corporation tax attributable to the income attributable to those group relevant payments were deemed to be increased by an amount which—

(a) shall be allocated by the company in such amounts and to such part of that income as the company thinks fit, and

(b) shall not exceed 35 per cent of the amount of corporation tax which—

(i) apart from this section would be payable by the company, and

(ii) is attributable to all relevant payments made to the company in the course of the trade in the accounting period,

the amount of that credit shall be so computed for those purposes.

(3) Where an election is made by a company under subsection (2) in respect of a relevant accounting period—

(a) any credit for foreign tax deducted from group relevant payments made to the company in the accounting period shall be computed as if the amount of foreign tax deducted from those group relevant payments were the amount of relevant foreign tax comprised in that amount, and

(b) so much of that credit as would not have been allowed to the company apart from this section shall be disregarded for the purposes of paragraph 7(3)(c) of Schedule 24.

(4) (a) For the purposes of subsection (2), the amount of corporation tax which apart from this section would be payable by a company and which is attributable to relevant payments made to the company shall be an amount determined by the formula—

AB

where—

A is an amount equal to 10 per cent of the amount of the income of the company attributable to relevant payments, and

B is the credit which apart from this section would be allowed to the company in respect of foreign tax deducted from those payments.

(b) For the purposes of paragraph (a)—

(i) the amount of the income of a company attributable to relevant payments made to the company in the course of a trade in a relevant accounting period shall, subject to paragraph 4(5) of Schedule 24, be taken to be such sum as bears to the total amount of the income of the company from the sale of goods in the course of the trade in the relevant accounting period the same proportion as those relevant payments bear to the total amount receivable by the company from the sale of goods in the course of the trade in the accounting period, and

(ii) the total amount of income of a company from the sale of goods in the course of a trade in a relevant accounting period shall be taken to be the sum referred to in subsection (3) of section 448 which, for the purposes of subsection (2) of that section, is to be taken to be the income of the trade for the relevant accounting period referred to in the expression “the income from the sale of those goods” in subsection (2) of that section.

(5) Where as respects a relevant accounting period corporation tax payable by a company is by virtue of section 448(7) reduced by a fraction (referred to in that section as “the revised relief”), this section shall apply to the company as if the references to 10 per cent in the definition of “relevant foreign tax” in subsection (1) and in the definition of “A” in subsection (4)(a) were references to a rate per cent determined by the formula—

C(1D)

where—

C is the rate per cent of corporation tax specified in section 21(1) for the financial year in which the relevant accounting period ends, and

D is the fraction referred to in section 448(7) as “the revised relief”.

(6) An election referred to in subsection (2) shall be made in writing to the appropriate inspector in relation to the company making the election on or before that company's specified return date for the chargeable period in respect of which it is making the election.

451 Treatment of income and gains of certain trading operations carried on in Custom House Docks Area from investments held outside the State. [FA88 s36(4); FA97 s66(1)]

451.—(1) In this section—

“the Area” has the same meaning as it has for the purposes of section 446;

“foreign life assurance business” means relevant trading operations within the meaning of section 446 consisting of life assurance business with policy holders and annuitants who at the time such business is contracted reside outside the State and, as regards any policy issued or contract made, as the case may be, with such policy holders or annuitants in the course of such business, such policy or contract does not provide for—

(a) the granting of any additional contractual rights, or

(b) an option to have another policy or contract substituted for it,

at a time when the policy holder or annuitant, as the case may be, resides in the State;

“foreign unit trust business” means relevant trading operations within the meaning of section 446 consisting of the management of the investments of one or more qualifying unit trusts;

“qualifying unit trust” means a unit trust scheme—

(a) which 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.

(2) 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.

452 Application of section 130 to certain interest. [FA88 s37; FA94 s49]

452.—(1) (a) In this section—

“qualified company” and “relevant trading operations” have the same meanings as they have for the purposes of sections 445 and 446, but trading operations shall not be treated as relevant trading operations (within the meaning of section 445) if they are not trading operations which could be certified by the Minister for Finance as relevant trading operations for the purposes of section 446 if they were carried on in the Area (within the meaning of section 446) rather than in the airport (within the meaning of section 445);

“resident of the United States of America” has the meaning assigned to it by the Convention set out in Schedule 25.

(b) For the purposes of this section, 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 826.

(2) This section shall apply to so much of any interest as—

(a) is a distribution by virtue only of section 130(2)(d)(iv),

(b) is payable by a qualified company in the course of carrying on relevant trading operations and would but for section 130(2)(d)(iv) be deductible as a trading expense in computing the amount of the company's income from the relevant trading operations, and

(c) 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 826 have been made.

(3) 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 130(2)(d)(iv), then, section 130(2)(d)(iv) shall not apply to that interest.

(4) 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 furnished together with the company's return of its profits for the period.

453 Transactions between associated persons. [FA80 s44]

453.—(1) In this section, “control” has the same meaning as in section 11.

(2) Where a company making a claim for relief under this Part (in this subsection referred to as “the buyer”) buys from another person (in this subsection referred to as “the seller”), and—

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

(b) the price in the transaction is less than that which might have been expected to obtain if the parties to the transaction had been independent parties dealing at arm's length,

then, the income or losses of the buyer and the seller shall be computed for any purpose of the Tax Acts as if the price in the transaction had been that which would have obtained if the transaction had been a transaction between independent persons dealing at arm's length.

(3) Where a company making a claim for relief under this Part (in this subsection referred to as “the seller”) sells goods to another person (in this subsection referred to as “the buyer”) and—

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

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

then, the income or losses of the buyer and the seller shall be computed for any purpose of the Tax Acts as if the goods had been sold by the seller to the buyer for the price which the goods would have fetched if the transaction had been a transaction between independent persons dealing at arm's length.

(4) For the purposes of subsection (3), a company shall be deemed to sell goods where and to the extent that for the purposes of this Part any amount receivable by it in payment for any trading activity is regarded as an amount receivable from the sale of goods, and “seller” and “buyer” shall be construed accordingly.

(5) The inspector may by notice in writing require a company making a claim for relief under this Part to furnish him or her with such information or particulars as may be necessary for the purposes of this section, and subsection (2) of section 448 shall apply as if the matters of which proof is required by that subsection included the information or particulars specified in a notice under this section.

454 Restriction of certain charges on income. [CTA76 s10A(1)(a) and (b)(ii), (2) and (3); FA92 s46(1)(a); FA93 s50]

454.—(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, if the company had sufficient profits in that period and made a claim for relief in respect of the trade under this Part for that period, would be regarded for the purposes of this Part 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 422 as applied for the purposes of relief under section 456, 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 448(2), if—

(i) no group relief under section 456 or loss relief under section 455(3) 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 this Part;

“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 448(4), “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 section 448(3) 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;

“the sale of goods and merchandise” in the course of a trade carried on by a company means the sale of such goods and merchandise as would respectively be treated as goods and merchandise for the purposes of a claim under this Part, if the company had a sufficiency of profits and had made such a claim.

(b) For the purposes of this section, where an accounting period begins before the 1st day of January, 2011, 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, 2010, and another part beginning on the 1st day of January, 2011, and ending on the day the accounting period ends, and both parts shall be treated as if they were separate accounting periods.

(2) Notwithstanding section 243, so much of the total amount of charges on income paid for the purpose of the sale of goods by a company in an accounting period ending on or before the 31st day of December, 2010, in the course of a trade or trades, as the case may be, shall not be allowed as a deduction against the total profits of the company for the period as exceeds the total amount, reduced by any loss relief under section 455(3), of the company's income from the sale of goods in the course of the trade or trades, as the case may be, in the period.

(3) (a) Notwithstanding section 448(3), the income of a company, referred to in the expression “the income from the sale of those goods”, for any accounting period for the purposes of section 448(2) shall be the sum determined by section 448(3) for that period reduced by any charges on income paid for the purpose of the sale of goods which are allowed as a deduction against the total profits of the company for that period.

(b) Notwithstanding section 4(4)(b), the income of a company, referred to in the expression “total income brought into charge to corporation tax”, for any accounting period for the purposes of section 448(2) shall be the sum determined by section 4(4)(b) for that period reduced by any charges on income paid for the purposes of the sale of goods which are allowed as a deduction against the total profits of the company for that period.

(c) Where for any accounting period of a company—

(i) the corporation tax referable to the income of the company from the sale of goods is to be reduced under section 448, and

(ii) charges on income paid for the purpose of the sale of goods have been allowed as a deduction against total profits,

then, notwithstanding section 148, the charges on income paid for the purpose of the sale of goods shall be deducted from the amount of the relevant deduction in relation to the period for charges on income in section 148(1).

455 Restriction of certain losses. [CTA76 s16A; FA92 s46(1)(c)]

455.—(1) (a) In this section—

“trade”, “income from the sale of goods” and “the sale of goods and merchandise” have the same meanings respectively as in section 454;

“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 448(4), “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 section 448(3) were the amount of so much of the loss, computed as for the purposes of section 396(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, but a loss such as is mentioned in section 407(4)(b) shall not be a loss from the sale of goods.

(b) Section 454(1)(b) shall apply for the purposes of this section as it applies for the purposes of section 454.

(2) Notwithstanding section 396(2) but subject to subsections (6) and (7), for the purposes of that section the amount of a loss in a trade incurred by a company in an accounting period shall be deemed to be reduced by the amount of a loss from the sale of goods, if any, incurred in the trade by the company in the accounting period.

(3) Subject to subsections (6) and (7), where in an accounting period a company carrying on a trade incurs a loss from the sale of goods, the company may make a claim requiring that the loss be set off for the purposes of corporation tax against its income from the sale of goods—

(a) of that accounting period, and

(b) if it was then carrying on the trade and if the claim so requires, of preceding accounting periods ending within the time specified in subsection (4),

and, subject to any relief for an earlier loss, to the extent that the trading income of any of those accounting periods consists of or includes income from the sale of goods, that trading income shall then be reduced by so much of the loss as cannot be relieved against trading income of a later accounting period.

(4) For the purposes of subsection (3), the time referred to in paragraph (b) of that subsection shall be the time immediately preceding the accounting period first-mentioned in subsection (3) equal in length to that accounting period; but the amount of the reduction which may be made under subsection (3) in the trading income of an accounting period falling partly before that time shall not exceed such part of the income from the sale of goods included in that trading income as bears to the income from the sale of goods the same proportion as the part of the accounting period falling within that time bears to the whole of that accounting period.

(5) (a) In section 448(3) and for the purposes of determining “the amount” in the expression “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”, it shall be determined in accordance with section 448(4) as if no relief for a loss in a trade had been claimed under this section.

(b) Notwithstanding section 448(3), for the purposes of determining “the income” in the expression “the income from the sale of those goods” in an accounting period for the purposes of section 448(2), it shall be the sum determined by section 448(3) for that period reduced by any relief for a loss in a trade allowed under this section against income of the trade mentioned in section 448(2) in that period.

(6) This section shall not apply to so much of a company's 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 Part 9 or Chapter 1 of Part 29 which are to be made for the accounting period in taxing the trade, and for the purposes of this subsection no account shall be taken of capital allowances other than capital allowances in respect of machinery or plant or an industrial building or structure—

(a) provided for the purposes of a project approved within the period of 2 years ending on the 31st day of December, 1988, by the Industrial Development Authority,

(b) the expenditure on the provision of which was incurred on or before the 31st day of March, 1995, and

(c) more than 50 per cent of the expenditure on the provision of which was incurred, or was the subject of a binding contract entered into, before the 1st day of April, 1992.

(7) This section shall not apply to so much of a company's 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 323(2) deducted by the company in computing the loss which the company has incurred in that period in carrying on trading operations specified in a certificate given to it, and not subsequently revoked, by the Minister for Finance under section 446.

456 Restriction of group relief. [CTA76 s116A(1)(a) and (b)(ii), (2) and (3), (4)(b) and (5); FA88 s34; FA92 s46(2)]

456.—(1) (a) In this section—

“trade”, “income from the sale of goods”, “charges on income paid for the purposes of the sale of goods” and “the sale of goods and merchandise” have the same meanings respectively as in section 454;

“a loss from the sale of goods” has the same meaning as in section 455;

“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 420(6) as computed for the company for that period.