Finance Act 2005

“Computation of profits or gains of a company - accounting standards.	76A.—(1) For the purposes of Case I or II of Schedule D the profits or gains of a trade or profession carried on by a company shall be computed in accordance with generally accepted accounting practice subject to any adjustment required or authorised by law in computing such profits or gains for those purposes. (2) Schedule 17A shall apply to a company where— (a) for an accounting period profits or gains of a trade or profession carried on by the company are computed in accordance with relevant accounting standards (within the meaning of that Schedule), and (b) for preceding accounting periods profits or gains of a trade or profession carried on by the company are computed in accordance with standards other than relevant accounting standards (within the meaning of that Schedule).
Treatment of unrealised gains and losses in certain cases.	76B.—(1) (a) In this section and paragraph 4 of Schedule 17A, ‘fair value’, ‘financial asset’ and ‘financial liability’ have the meanings assigned to them by international accounting standards. (b) For the purposes of this section, section 76A and paragraph 4 of Schedule 17A— (i) references to profits or gains include references to losses, and (ii) the amount of a loss incurred in a trade or profession in an accounting period shall be computed in like manner as profits or gains from the trade or profession in the accounting period would have been computed. (2) A profit or gain from a financial asset or a financial liability of a company that, in accordance with relevant accounting standards (within the meaning of Schedule 17A) is— (a) calculated on the basis of fair values of the asset or the liability in an accounting period, and (b) included in the profit or loss of the company for the accounting period, shall be taken into account on that basis in computing profits or gains of the company for that accounting period for the purposes of Case I or II of Schedule D.
Use of different accounting policies within a group of companies.	76C.—(1)(a) In this section ‘tax advantage’ means— (i) a reduction, avoidance or deferral of any charge or assessment to tax, including any potential or prospective charge or assessment, or (ii) a refund of or a payment of an amount of tax, or an increase in an amount of tax refundable or otherwise payable to a person, including any potential or prospective amount so refundable or payable. (b) For the purposes of this section, a series of transactions is not prevented from being a series of transactions in relation to companies by reason only of the fact that one or more of the following is the case— (i) there is no transaction in the series to which both those companies are parties; (ii) that parties to any arrangement in pursuance of which the transactions in the series are entered into do not include one or both of those companies; (iii) there are one or more transactions in the series to which neither of those companies is a party. (2) Where— (a) a company within the charge to tax under Case I or II of Schedule D prepares accounts in accordance with international accounting standards, (b) another company within the charge to tax under Case I or II of Schedule D, being a company which is an associated company (within the meaning of section 432) of the company referred to in paragraph (a), prepares accounts in accordance with Irish generally accepted accounting practice, (c) there is a transaction between, or a series of transactions involving, those companies, and (d) a tax advantage would, apart from this section, accrue to the company which prepares its accounts in accordance with international accounting standards compared with its position if it had prepared its accounts in accordance with Irish generally accepted accounting practice in relation to the transaction or series of transactions, then the Corporation Tax Acts shall apply for the purposes of computing profits or gains of that company from that transaction or series of transactions as if that company prepared its accounts in accordance with Irish generally accepted accounting practice.”,

• (c) in section 81—

• (i) in subsection (2) by substituting “patent;” for “patent.” in paragraph (m) and by inserting the following after that paragraph:

• “(n) without prejudice to the preceding paragraphs any consideration given for goods or services, or to an employee or director of a company, which consists, directly or indirectly, of shares in the company, or a connected company (within the meaning of section 10), or a right to receive such shares, except to the extent—

  • (i) of expenditure incurred by the company on the acquisition of the shares at a price which does not exceed the price which would have been payable, if the shares were acquired by way of a bargain made at arm's length, or

  • (ii) where the shares are shares in a connected company, of any payment by the company to the connected company for the issue or transfer by that company of the shares, being a payment which does not exceed the amount which would have been payable in a transaction between independent persons acting at arm's length.”,

and

• (ii) by inserting the following after subsection (2):

“(3)(a) In respect of a company—

• (i) interest payable by the company, and

• (ii) expenditure on research and development incurred by the company,

shall not be prevented from being regarded for tax purposes as deductible in computing profits or gains of the company for the purposes of Case I or II of Schedule D by virtue only of the fact that for accounting purposes they are brought into account in determining the value of an asset.

• (b) Any amount shall not be regarded by virtue of paragraph (a) as deductible in computing profits or gains of a company for the purposes of Case I or II of Schedule D for an accounting period to the extent that—

  • (i) a deduction has been made in respect of that amount in computing such profits or gains for a previous accounting period, or

  • (ii) the company has benefited from a tax relief under any provision in respect of that amount for a previous accounting period.”,

• (d) in section 110, by adding the following after subsection (5):

• “(6)

  • (a) Subject to paragraph (b), section 76A shall have effect in relation to a qualifying company as it would if, in section 4, the following were substituted for the definition of generally accepted accounting practice:

  ‘ “generally accepted accounting practice” means Irish generally accepted accounting practice as it applied for a period of account ending on 31 December 2004.’.

  • (b) A qualifying company may, as respect any accounting period, by notice in writing given to the inspector by the specified return date (within the meaning of section 950) for the accounting period, elect that this subsection shall not apply as respects that or any subsequent accounting period; and any election under this paragraph shall be irrevocable.

  • (c) Schedule 17A shall apply with any necessary modifications to a company which makes an election under paragraph (b).”,

• (e) in section 321 by inserting the following after subsection (2):

• “(2A) Subject to section 316, references to expenditure in relation to an asset—

  • (a) include expenditure on labour costs including emoluments paid to employees of the company, and

  • (b) do not include interest payable,

  which for accounting purposes is taken into account by the company in determining the value of the asset.”,

• (f) in section 766(1)(a) in the definition of “expenditure on research and development”—

• (i) by substituting the following for subparagraph (i):

• “(i) which—

  • (I) is allowable for the purposes of tax in the State as a deduction in computing income from a trade (otherwise than by virtue of section 307), or would be so allowable but for the fact that for accounting purposes it is brought into account in determining the value of an intangible asset, or

  • (II) is relieved under Part 8,”,

and

• (ii) by deleting “and” where it last occurs in clause (I) and by inserting the following after that clause:

• “(IA) expenditure by a company on research and development shall not include any amount of interest notwithstanding that such interest is brought into account by the company in determining the value of an asset, and”,

and

• (g) by inserting the following after Schedule 17:

“Section 76A.

SCHEDULE 17A Accounting Standards Interpretation 1. In this Schedule ‘relevant accounting standards’ means— (a) international accounting standards, or (b) as regards the matters covered by those published standards, Irish generally accepted accounting practice which is based on published standards— (i) which are stated so as to embody, in whole or in part, international accounting standards, and (ii) the application of which would produce results which are substantially the same as results produced by the application of international accounting standards. Transitional Measures (amounts receivable and deductible) 2. (1) In this paragraph— ‘deductible amount’, in relation to a company, means the aggregate of the amounts of— (a) so much of any amounts receivable by the company which falls to be taken into account as a trading receipt in computing the profits or gains for the purposes of Case I or II of Schedule D of the company for an accounting period computed in accordance with relevant accounting standards as was also taken into account as a trading receipt in computing such profits or gains of the company for any accounting period ending before the first accounting period in respect of which such profits or gains of the company were so computed, and (b) so much of an expense incurred by the company, being an expense which would have been deductible in computing profits or gains for the purposes of Case I or II of Schedule D of the company if the expense had been incurred in an accounting period for which such profits or gains were computed in accordance with relevant accounting standards, as— (i) was not deducted in computing the profits or gains for the purposes of Case I or II of Schedule D of the company for an accounting period ending before the first accounting period in respect of which such profits or gains of the company are computed in accordance with relevant accounting standards, and (ii) is not deductible in computing the profits or gains for the purposes of Case I or II of Schedule D of the company for any accounting period for which such profits or gains of the company are so computed; ‘taxable amount’, in relation to a company, means the aggregate of the amounts of— (a) so much of an amount receivable by the company, being an amount receivable which would have been taken into account as a trading receipt in computing the profits or gains for the purposes of Case I or II of Schedule D of the company if the amount had accrued in an accounting period for which such profits or gains were computed in accordance with relevant accounting standards, as is not so taken into account— (i) for an accounting period for which such profits or gains of the company are computed in accordance with relevant accounting standards, or (ii) for an accounting period ending before the first accounting period in respect of which such profits or gains are so computed, and (b) so much of an expense incurred by the company which is deductible in computing the profits or gains for the purposes of Case I or II of Schedule D of the company for an accounting period for which such profits or gains of the company are computed in accordance with relevant accounting standards as was deducted in computing such profits or gains of the company for any accounting period ending before the first accounting period of the company in respect of which such profits or gains were so computed. (2) (a) An amount equal to the excess of the taxable amount in relation to a company over the deductible amount in relation to the company shall, subject to subparagraph (4), be treated as a trading receipt of the company for the first accounting period of the company in respect of which profits or gains for the purposes of Case I or II of Schedule D of the company are computed in accordance with relevant accounting standards. (b) Notwithstanding clause (a), an amount which is treated under clause (a) as a trading receipt for an accounting period shall not be taken into account in computing the profits or gains for the purposes of Case I or II of Schedule D of the company for that accounting period but instead, subject to clause (c)— (i) one-fifth of the amount shall be so taken into account for that accounting period, and (ii) a further one-fifth shall be so taken into account for each succeeding accounting period until the whole amount has been accounted for. (c) Where any accounting period referred to in subclause (i) or (ii) of clause (b) is the last accounting period in which a company carried on a trade or profession then such fraction, of the amount referred to in those subclauses, shall be taken into account for that accounting period as is required to ensure that the whole of that amount is accounted for. (3) (a) An amount equal to the excess of the deductible amount in relation to a company over the taxable amount in relation to the company shall, subject to subparagraph (4), be treated as a deductible trading expense of the trade carried on by the company for the first accounting period of the company in respect of which profits or gains for the purposes of Case I or II of Schedule D of the company are computed in accordance with relevant accounting standards. (b) Notwithstanding clause (a), an amount which is treated under clause (a) as a deductible trading expense for an accounting period shall not be taken into account in computing the profits or gains for the purposes of Case I or II of Schedule D of the company for that accounting period but instead, subject to clause (c)— (i) one-fifth of the amount shall be so taken into account for that accounting period, and (ii) a further one-fifth shall be so taken into account for each succeeding accounting period until the whole amount has been accounted for. (c) Where any accounting period referred to in subclause (i) or (ii) of clause (b) is the last accounting period in which a company carried on a trade or profession then such fraction, of the amount referred to in those subclauses, shall be taken into account for that accounting period as is required to ensure that the whole of that amount is accounted for. (4) This paragraph does not apply as respects any amount taken into account under paragraph 4. Transitional Arrangements (bad debts) 3. (1) In this paragraph— ‘current bad debts provision’, in relation to a period of account of a company, means so much of the aggregate value of debts at the end of the period of account as represents the extent to which they are estimated to be impaired in accordance with relevant accounting standards; ‘first relevant period of account’, in relation to a company, means the first period of account in respect of which the company prepares its accounts in accordance with relevant accounting standards; ‘opening bad debts provision’, in relation to a company, means so much of the aggregate value of debts at the beginning of the first relevant period of account of the company as represents the extent to which they are estimated to be impaired in accordance with those standards; ‘specific bad debts provision’, in relation to a company, means the aggregate of the amounts of doubtful debts which were respectively estimated to be bad at the end of the period of account immediately preceding the first relevant period of account of the company. (2) This paragraph applies as respects a period of account in respect of which a company prepares its accounts in accordance with relevant accounting standards. (3) Where, as respects any period of account for which a company prepares its accounts in accordance with relevant accounting standards, the amount of the opening bad debts provision exceeds the higher of— (a) the current bad debts provision, or (b) the specific bad debts provision, the excess, reduced by any amount treated under this section as a trading expense for any earlier period of account or, if there is more than one such amount, by the aggregate of such amounts, shall be treated as a trading expense of the company's trade for the period of account. Transitional Measures (gains and losses in financial instruments) 4. (1) In this paragraph— ‘changeover day’, in relation to a company, means the last day of the accounting period immediately preceding the first accounting period of the company in respect of which profits or gains for the purposes of Case I or II of Schedule D of the company are computed in accordance with relevant accounting standards which are, or include, relevant accounting standards in relation to profits or gains or losses on financial assets and financial liabilities; ‘deductible amount’, in relation to a company, means the aggregate of— (a) so much of any amount of loss accruing on or before the changeover day on a financial asset or financial liability of the company, being a loss which had not been realised on or before that day and which would have been taken into account in computing profits or gains for the purposes of Case I or II of Schedule D of the company if it had accrued in an accounting period commencing after the changeover day, as, apart from this paragraph, would not be so taken into account for any accounting period of the company, and (b) so much of any amount of profits or gains, accruing and not realised in a period or periods (in this clause referred to as the “first-mentioned period or periods”) ending on or before the changeover day on a financial asset or financial liability of the company, which falls to be taken into account in computing the profits or gains for the purposes of Case I or II of Schedule D of the company for an accounting period or periods commencing before the changeover day as would, apart from this paragraph, be taken into account twice in computing profits or gains for the purposes of Case I or II of Schedule D of the company, by virtue of a profit, gain or loss, accruing in a period which includes the first-mentioned period or periods, being taken into account in computing profits or gains for the purposes of Case I or II of Schedule D of the company for an accounting period commencing after the changeover day; ‘taxable amount’, in relation to a company, means the aggregate of— (a) so much of any amount of profits or gains accruing on or before the changeover day on a financial asset or financial liability of the company, being profits or gains which had not been realised on or before that day and which would have been taken into account in computing the profits or gains for the purposes of Case I or II of Schedule D of the company if they had accrued in an accounting period commencing after the changeover day, as apart from this paragraph, would not be so taken into account for any accounting period of the company, and (b) so much of any amount of loss, accruing and not realised in a period or periods (in this clause referred to as the “first-mentioned period or periods”) ending on or before the changeover day on a financial asset or financial liability of the company, which falls to be taken into account in computing the profits or gains for the purposes of Case I or II of Schedule D of the company for an accounting period or periods commencing before the changeover day as would, apart from this paragraph, be taken into account twice in computing profits or gains for the purposes of Case I or II of Schedule D of the company, by virtue of a profit, gain or loss, accruing in a period which includes the first-mentioned period or periods, being taken into account in computing profits or gains for the purposes of Case I or II of Schedule D of the company for an accounting period commencing after the changeover day. (2) (a) An amount equal to the excess of the taxable amount in relation to a company over the deductible amount in relation to the company shall be treated as a trading receipt of the company for the first accounting period of the company commencing after the changeover day. (b) Notwithstanding clause (a), an amount which is treated under clause (a) as a trading receipt for an accounting period shall not be taken into account in computing the profits or gains for the purposes of Case I or II of Schedule D of the company for that accounting period but instead, subject to clause (c)— (i) one-fifth of the amount shall be so taken into account for that accounting period, and (ii) a further one-fifth shall be so taken into account for each succeeding accounting period until the whole amount has been accounted for. (c) Where any accounting period referred to in subclause (i) or (ii) of clause (b) is the last accounting period in which a company carried on a trade or profession then such fraction, of the amount referred to in those subclauses, shall be taken into account for that accounting period as is required to ensure that the whole of that amount is accounted for. (3) (a) An amount equal to the excess of the deductible amount in relation to a company over the taxable amount in relation to the company shall be treated as a deductible trading expense of the trade carried on by the company for the first accounting period of the company commencing after the changeover day. (b) Notwithstanding clause (a), an amount which is treated under clause (a) as a deductible trading expense for an accounting period shall not be taken into account in computing the profits or gains for the purposes of Case I or II of Schedule D of the company for that accounting period but instead, subject to clause (c)— (i) one-fifth of the amount shall be so taken into account for that accounting period, and (ii) a further one-fifth shall be so taken into account in each succeeding accounting period until the whole amount has been accounted for. (c) Where any accounting period referred to in subclause (i) or (ii) of clause (b) is the last accounting period in which a company carried on a trade or profession then such fraction, of the amount referred to in those subclauses, shall be taken into account for that accounting period as is required to ensure that the whole of that amount is accounted for. (4) (a) Subparagraph (5) applies to a loss incurred by a company on the disposal at any relevant time of any financial asset or financial liability where, within a period beginning 4 weeks before and ending 4 weeks after that disposal, the company acquired a financial asset or financial liability of the same class providing substantially the same access to economic benefits and exposure to risk as would have been provided by the reacquisition of the asset or liability disposed of. (b) In this paragraph ‘relevant time’ means a time after 1 January 2005 which is in a period of 6 months ending on the changeover day. (5) A loss to which this subparagraph applies, which would otherwise be taken into account in computing profits or gains or losses of a company for the purposes of Case I or II of Schedule D for an accounting period, shall not be so taken into account but instead— (a) one-fifth of the loss shall be so taken into account for that accounting period, (b) a further one-fifth shall be so taken into account for each succeeding accounting period until the whole amount has been accounted for, and (c) notwithstanding clauses (a) and (b), where any accounting period referred to in those clauses is the last accounting period in which a company carried on a trade or profession then such fraction, of the amount referred to in those clauses, shall be taken into account for that accounting period as is required to ensure that the whole of that amount is accounted for. (6) As respects the first accounting period of a company in respect of which profits or gains for the purposes of Case I or II of Schedule D of the company are computed in accordance with relevant accounting standards, which are, or include, relevant accounting standards in relation to profits or gains or losses on financial assets or liabilities, section 958 shall have effect as if— (a) in subsection (4D)(b) the following were substituted for ‘no amount were included in the chargeable person's profits for the chargeable period in respect of chargeable gains on the disposal by the person of assets in the part of the chargeable period which is after the date by which the first instalment for the chargeable period is payable in accordance with subsection (2A)’: ‘no amount were included in the chargeable person's profits for the chargeable period in respect of— (i) chargeable gains on the disposal by the person of assets in the part of the chargeable period which is after the date by which, or (ii) profits or gains or losses accruing, and not realised, in the chargeable period on financial assets or financial liabilities as are attributable to changes in value of those assets or liabilities in the part of the chargeable period which is after the end of the month immediately preceding the month in which, the first instalment for the chargeable period is payable in accordance with subsection (2A)’, and (b) in subsection (4E)(b) the following were substituted for ‘no amount were included in the chargeable person's profits for the chargeable period in respect of chargeable gains on the disposal by the person of assets in the part of the chargeable period which is after the date by which preliminary tax for the chargeable period is payable in accordance with subsection (2B)’: ‘no amount were included in the chargeable person's profits for the chargeable period in respect of— (i) chargeable gains on the disposal by the person of assets in the part of the chargeable period which is after the date by which, or (ii) profits or gains or losses accruing, and not realised, in the chargeable period on financial assets or financial liabilities as are attributable to changes in value of those assets or liabilities in the part of the chargeable period which is after the end of the month immediately preceding the month in which, preliminary tax for the chargeable period is payable in accordance with subsection (2B)’.”.

• (2) This section applies as respects any period of account beginning on or after 1 January 2005.

49 Amendment of section 243 (allowance of charges on income) of Principal Act.

49.—(1) Section 243 of the Principal Act is amended—

• (a) in subsection (1A) by inserting “has the meaning assigned to it by section 845A and” after “ ‘bank’ ”,

• (b) in subsection (2) by inserting “in accordance with section 420” after “group relief”,

• (c) in subsection (4)(b)—

• (i) by substituting “interest payable on an advance” for “interest payable in the State on an advance”, and

• (ii) in subparagraphs (i) and (ii) by substituting “in a Member State of the European Communities” for “in the State” in each place where it occurs,

and

• (d) in subsection (5)—

• (i) in paragraph (a) by substituting “as the case may be,” for “as the case may be, or”,

• (ii) in paragraph (b) by substituting “the State, or” for “the State.”, and

• (iii) by inserting the following after paragraph (b):

• “(c) to which section 238 or 246(2) do not apply by virtue of section 267I.”.

• (2) This section applies as respects accounting periods ending on or after 3 February 2005.

50 Amendment of Chapter 6 (Implementation of Council Directive 2003/49/EC of 3 June 2003 on a common system of taxation applicable to interest and royalty payments made between associated companies of different Member States) of Part 8 of Principal Act.

50.—(1) Chapter 6 of Part 8 of the Principal Act is amended by inserting the following section after section 267K:

“Application of this Chapter to certain payments made to companies in Switzerland.

267L.—(1) This section applies to a payment, being interest or royalties, made to or for the benefit of— (a) where paragraph (b) does not apply, a company which— (i) is the beneficial owner of the interest, or as the case may be the royalties, (ii) is, by virtue of the law of Switzerland, resident for the purposes of tax in Switzerland, and (iii) is not treated, by virtue of any arrangements made by the government of Switzerland with the government of any territory for the purposes of tax, as resident in any territory which is not— (I) a Member State of the European Communities, or (II) Switzerland, or (b) a permanent establishment situated in Switzerland through which a company carries on business in Switzerland, being a permanent establishment which would, in accordance with the Directive, be treated as the beneficial owner of the interest, or as the case may be the royalties. (2) Sections 267G to 267I shall have effect in relation to a payment to which this section applies as if— (a) a reference in those sections to a Member State of the European Communities included a reference to Switzerland, (b) a reference in those sections to a company of a Member State included a company (being a company which takes one of the forms specified in Article 15 of the Agreement attached to the Council Decision (2004/911/EC) of 2 June 2004 on the signing and conclusion of the Agreement between the European Community and the Swiss Confederation providing for measures equivalent to those laid down in Council Directive 2003/48/EC of 3 June 2003 on taxation of savings income in the form of interest payments and the accompanying Memorandum of Understanding1) resident for the purposes of tax in Switzerland, and (c) a reference in those sections to tax included any tax imposed in Switzerland which corresponds to income tax or corporation tax in the State. (3) Section 267K applies in relation to this section as it applies in relation to sections 267G to 267I.”.

• (2) This section applies as respects any payment made on or after 1 July 2005.

51 Amendment of Chapter 2 (Miscellaneous) of Part 35 of Principal Act.

51.—(1) Chapter 2 of Part 35 of the Principal Act is amended by inserting the following section after section 831:

“Treatment of distributions to certain parent companies.

831A.—(1) (a) In this section— ‘company’, in relation to a company that is resident for the purposes of tax in Switzerland, means a company which— (i) takes one of the forms specified in Article 15 of the Agreement attached to the Council Decision (2004/911/EC) of 2 June 2004 on the signing and conclusion of the Agreement between the European Community and the Swiss Confederation providing for measures equivalent to those laid down in Council Directive 2003/48/EC of 3 June 2003 on taxation of savings income in the form of interest payments and the accompanying Memorandum of Understanding1, and (ii) is subject to tax in Switzerland without being exempt; ‘parent company’ means a company which controls not less than 25 per cent of the voting power in another company; ‘tax’, in relation to Switzerland, means any tax imposed in Switzerland which corresponds to income tax or corporation tax in the State. (b) For the purposes of this section a company shall be a subsidiary of another company which holds voting rights in it where the other company's holding of those rights is sufficient for that other company to be a parent company. (2) Chapter 8A of Part 6, other than section 172K, shall not apply to a distribution made to a parent company which is, by virtue of the law of Switzerland, resident for the purposes of tax in Switzerland by its subsidiary which is a company resident in the State.”.

• (2) This section applies as respects a distribution made on or after 1 July 2005.

52 Amendment of section 410 (group payments) of Principal Act.

52.—(1) Section 410 of the Principal Act is amended—

• (a) in subsection (4) by substituting “a relevant Member State” for “the State”, and

• (b) by substituting the following for subsection (5):

• “(5) This section shall apply to any payments which—

  • (a) for the purposes of corporation tax, are charges on income of the company making them or would be so if they were not deductible in computing profits or any description of profits or if section 243(7) did not apply to them, and

  • (b) where the company receiving the payments is not resident in the State, are taken into account in computing income of that company chargeable to tax in a relevant Member State,

  but shall not apply to payments received by a company on any investments if a profit on the sale of those investments would be treated as a trading receipt of that company.”.

• (2) This section applies as respects accounting periods ending on or after 1 March 2005.

53 Amendment of section 448 (relief from corporation tax) of Principal Act.

53.—(1) Section 448 of the Principal Act is amended—

• (a) by substituting the following for subsection (1):

“(1)(a) For the purposes of this section, references to ‘charges on income paid for the purposes of the sale of goods’, where they are in the course of a trade in an accounting period, shall be taken to be such amount as would be the amount of the income from the sale of goods in that period if, notwithstanding subsection (4), the reference to ‘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), were to 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.

• (b) For the purposes of this section, references to a ‘loss from the sale of goods’, where they are 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 subsection (4), the reference to ‘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), were to 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.

• (c) For the purposes of this section references to an ‘excess of charges on income paid for the purpose of the sale of goods’, where they are 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.

• (d) (i) For the purposes of this section, ‘relevant corporation tax’ means the corporation tax which, apart from this section, sections 22A, 239, 241, 440, 441, 449, 644B 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.

  • (ii) For the purpose of subparagraph (i), 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.”,

• (b) in subsection (3), by substituting the following for paragraph (b):

• “(b) then, deducting from the relevant sum—

  • (i) the amount of any charges on income paid for the purposes of the sale of goods in the relevant accounting period,

  • (ii) the amount of any loss from the sale of goods incurred by the company in the relevant accounting period, and

  • (iii) the amount of any excess of charges on income paid for the purpose of the sale of goods or the amount of any loss from the sale of goods, incurred by a surrendering company and allowed under section 420A,

  allowed against income of the trade in the relevant accounting period.”,

• (c) in subsection (4)—

• (i) in paragraph (i) by deleting “or 454”,

• (ii) in paragraph (ii) by deleting “or 455”, and

• (iii) in paragraph (iii) by deleting “or 456”,

and

• (d) in subsection (5A)(b) by deleting subparagraph (i).

• (2) This section applies as respects accounting periods ending on or after 3 February 2005.

54 Amendment of section 626B (exemption from tax in the case of gains on certain disposals of shares) of Principal Act.

54.—(1) Section 626B of the Principal Act is amended—

• (a) in subsection (1)(a) by deleting the definition of “relevant time”,

• (b) in subsection (1)(b)(i) by substituting “5 per cent” for “10 per cent” in clauses (I), (II) and (III), and

• (c) in subsection (2) by substituting the following for paragraph (a):

• “(a) the disposal by the investor company is at a time—

  • (i) when the investor company is a parent company of the investee company, or

  • (ii) within the 2 year period beginning on the most recent day on which the investor company was a parent company of the investee company,”.

• (2) Subsection (1) applies as on and from 2 February 2004.

55 Cesser of section 686 (reduction of corporation tax) of Principal Act.

55.—Section 686 of the Principal Act shall cease to have effect as respects accounting periods ending on or after 3 February 2005.

Chapter 6 Capital Gains Tax

56 Amendment of section 980 (deduction from consideration on disposal of certain assets) of Principal Act.

56.—(1) Section 980 of the Principal Act is amended—

• (a) by inserting the following after subsection (3):

• “(3A) This section shall not apply to a disposal by a body specified in Schedule 15.”,

• (b) in subsection (4)(c) in the definition of “house” by substituting “section 372AK” for “section 329”, and

• (c) in subsection (9) by inserting the following after paragraph (d):

• “(e) Where a person acquiring an asset has paid to the Collector-General an amount of capital gains tax in accordance with paragraph (a)(II) and recovered a sum of that amount from the person disposing of the asset, then, on proof being given in that regard, appropriate relief shall be given to the person disposing of the asset, whether by discharge, repayment or otherwise.”.

• (2)
• (a) Paragraphs (a) and (c) of subsection (1) shall apply as on and from the date of the passing of this Act.

• (b) Paragraph (b) of subsection (1) is deemed to have applied as on and from 25 March 2002.

57 Amendment of Schedule 15 (list of bodies for purposes of section 610) to Principal Act.

57.—(1) Schedule 15 to the Principal Act is amended in Part 1—

• (a) by substituting “7. The Health Service Executive.” for “7. A health board.”, and

• (b) by substituting the following for paragraphs 12 to 17:

“12. Dublin Regional Tourism Authority Limited.

1. The South-East Regional Tourism Authority Limited.

2. South-West Regional Tourism Authority Limited.

3. The Western Regional Tourism Authority Limited.

4. The North-West Regional Tourism Authority Limited.

5. Midlands-East Regional Tourism Authority Limited.”.

• (2)
• (a) Paragraph (a) of subsection (1) is deemed to have applied as on and from 1 January 2005.

• (b) Paragraph (b) of subsection (1) applies as on and from the date of the passing of this Act.

58 Amendment of section 608 (superannuation funds) of Principal Act.

58.—Section 608 of the Principal Act is amended by inserting the following after subsection (2):

• “(2A) A gain shall not be a chargeable gain if accruing to a person who is exempt from income tax under section 790B.”.

PART 2 Excise

Chapter 1 Alcohol Products Tax

59 Amendment of section 134 (power to stop vehicles) of Finance Act 2001.

59.—Section 134 of the Finance Act 2001 is amended in subsection (1) by substituting the following for paragraph (a):

• “(a) that such officer, or any officer accompanying such officer, may exercise any power conferred on them by section 135 in relation to excisable products, any other products chargeable with a duty of excise, or any prohibited goods, where there are reasonable grounds to believe that such products or goods are being transported in or on such vehicle, or”.

60 Amendment of section 139 (power of arrest and detention of persons) of Finance Act 2001.

60.—Section 139 of the Finance Act 2001 is amended by substituting the following for subsection (1):

• “(1) Where an officer or a member of the Garda Síochána has reasonable grounds to suspect that a person is committing or has committed an offence under—

  • (a) section 119,

  • (b) section 102(3) of the Finance Act 1999, or

  • (c) section 79(5) (inserted by the Finance Act 2005) of the Finance Act 2003,

  then such officer or member may arrest such person without warrant.”.

61 Amendment of section 73 (interpretation) of Finance Act 2003.

61.—Section 73 of the Finance Act 2003 is amended in subsection (1)—

• (a) by inserting the following definition after the definition of “Commissioners”:

“ ‘counterfeit goods’ has the same meaning that it has in Article 2 of Council Regulation (EC) No. 1383/2003 of 22 July 2003¹;”,

• (b) by inserting the following definition after the definition of “Directive”:

“ ‘illicit alcohol product’ means any alcohol product—

• (a) which has been produced or processed in the State otherwise than in a tax warehouse, except where section 77(f), or subsection (2) or (3) of section 109 of the Finance Act 2001 applies, or

• (b) which is counterfeit goods;”,

• (c) by substituting the following for the definition of “prohibited goods”:

“ ‘prohibited goods’ means any machinery, apparatus, equipment, vessel, materials, substance or other thing which is being used, or was used, or is intended to be used, either in the production or processing of any illicit alcohol product or in the removal from any alcohol product of any denaturant;”.

62 Amendment of section 79 (offences and penalties) of Finance Act 2003.

62.—The Finance Act 2003 is amended, in Chapter 1 of Part 2, by substituting the following for section 79:

“79.—(1) Except where subsection (2), (3) or (5) applies, it is an offence under this subsection for any person to contravene or fail to comply with any provision of this Chapter or any regulation made under section 81 or any condition imposed under this Chapter or under such regulation in relation to such provision.

• (2) It is an offence under this subsection to invite an offer to treat for, offer for sale, keep for sale or delivery, sell or deliver, or to be in the process of delivering, any alcohol product on which the appropriate rate of alcohol products tax has not been paid.

• (3) It is an offence under this subsection for any person to record in any account, return or other record relating to alcohol products or materials which is required to be kept in accordance with any provision of this Chapter or any regulations made under section 81—

  • (a) a quantity, strength, or gravity for any alcohol product or materials which is found by an officer taking account to be greater or less than the actual quantity, strength or gravity of such alcohol product or materials,

  • (b) any other particular relevant to the liability of any alcohol product to alcohol products tax which is not true and accurate.

• (4) Subsection (3) does not apply where any discrepancy—

  • (a) is accounted for by a loss due to force majeure or by a loss inherent in the nature of the product, or

  • (b) is otherwise accounted for to the satisfaction of the Commissioners, and the alcohol products tax due on the product in question is paid.

• (5) It is an offence under this subsection—

  • (a) to produce or process any illicit alcohol product or to attempt such production or processing, or to be concerned with any such production, processing, attempted production or attempted processing,

  • (b) without the consent in writing of the Commissioners, to remove or to attempt to remove, or to be knowingly concerned in removing or attempting to remove, any denaturant from any alcohol product,

  • (c) to knowingly deal in any illicit alcohol product or any alcohol product from which any denaturant has been removed,

  • (d) to keep prohibited goods in any premises or on any land, or

  • (e) to deliver, or be in the process of delivering, any illicit alcohol product or prohibited goods.

• (6)

  • (a) Whenever a person, who is the owner or the occupier for the time being of premises or land in or on which prohibited goods are found, is charged in any legal proceedings with contravening subsection (5)(d), the prohibited goods shall, until the contrary is proved, be presumed to have been kept by such person in the said premises or on the said land (as the case may be), in contravention of that subsection.

  • (b) In the case of an offence under subsection (2), where it is shown that any alcohol product is counterfeit goods, it shall be presumed, until the contrary is proved, that the appropriate rate of alcohol products tax has not been paid on such product.

• (7) Without prejudice to any other penalty to which a person may be liable, a person guilty of an offence under subsection (1), (2) or (3) is liable on summary conviction to a fine of €1,900.

• (8) Without prejudice to any other penalty to which a person may be liable, a person convicted of an offence under subsection (5) is liable—

  • (a) on summary conviction to a fine of €3,000 or, at the discretion of the Court, to imprisonment for a term not exceeding 12 months, or to both, or

  • (b) on a conviction on an indictment, to a fine of €12,695 or, at the discretion of the Court, to imprisonment for a term not exceeding 5 years, or to both.

• (9) Where a person convicted of an offence under subsection (2) or (5) is either a licensee within the meaning of section 2 of the Intoxicating Liquor Act 2003, or the secretary of a club registered under the Registration of Clubs Acts 1904 to 2004, section 9 (which relates to the temporary closure of a licensed premises) of the first-mentioned Act shall, with the exception of subsection (4), apply in respect of a licensed premises or premises of such club, used in connection with such offence.

• (10) Any alcohol products, materials or prohibited goods in respect of which an offence has been committed under this section are liable to forfeiture and, where any such products, materials or goods are found in, on, or in any manner attached to any vehicle, such vehicle is also liable to forfeiture.

• (11) Where an offence under this section 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 an offence and may be proceeded against and punished as if guilty of the first-mentioned offence.”.

63 Amendment of Chapter 1 of Part 2 (alcohol products tax) of Finance Act 2003.

63.—Chapter 1 of Part 2 of the Finance Act 2003 is amended by inserting the following section after section 78:

“Relief for small breweries.

78A.—(1) A relief of half the amount of alcohol products tax paid on beer shall, subject to subsection (3) and to such conditions as the Commissioners may prescribe or otherwise impose, be granted on a quantity of beer, not exceeding 20,000 hectolitres in a calendar year, brewed in the European Community in a brewery— (a) in which the quantity of beer brewed in the previous year has not exceeded 20,000 hectolitres, (b) which is legally and economically independent of any other brewery, (c) the premises of which are situated physically apart from those of any other brewery, and (d) in which less than 50 per cent of the beer brewed in the previous calendar year has been brewed under a licence, franchise or contract arrangement for another brewery. (2) The relief under subsection (1) shall be granted by the Commissioners by means of repayment. (3) (a) Subject to paragraph (b), relief under subsection (1) does not apply to any beer brewed for another brewery under a licence, franchise or contract arrangement. (b) Notwithstanding paragraph (a), where beer is brewed in a brewery under a licence, franchise, contract or other cooperation arrangement with one or more other breweries, and where— (i) such brewery and each of the breweries with which it has such an arrangement satisfy the criteria set down in paragraphs (a), (b) and (c) of subsection (1), and (ii) the combined total quantity of the beer brewed in the previous calendar year, in such brewery and the breweries with which it has such an arrangement, has not exceeded 40,000 hectolitres, then subsection (1)(d) does not apply, and such beer qualifies for relief under subsection (1). (4) For the purposes of subsection (1)(b) a brewery is not considered to be legally and economically independent of another brewery where such breweries are directly or indirectly owned or partly owned— (a) by the same person, or (b) by associated companies within the meaning of section 432 of the Taxes Consolidation Act 1997 or by legal entities corresponding to such associated companies. (5) (a) Claims for repayment under subsection (2) shall be made in such form as the Commissioners may direct and shall be in respect of payments of alcohol products tax made within a period of 3 calendar months beginning on the first day of January, April, July or October. (b) A repayment may not be made under this section unless the claim is made within 6 months following the end of each such period or within such longer period as the Commissioners may, in any particular case, allow.”.

Chapter 2 Mineral Oil Tax

64 Rates of mineral oil tax.

64.—The Finance Act 1999 is amended—

• (a) with effect as on and from 1 April 2005, by substituting the following for Schedule 2 to that Act, as amended by section 48 of the Finance Act 2004:

	“SCHEDULE 2 Rates of Mineral Oil Tax (With effect as on and from 1 April 2005)	“SCHEDULE 2 Rates of Mineral Oil Tax (With effect as on and from 1 April 2005)
	Description of Mineral Oil	Rate of Tax
	Light Oil:
	Leaded petrol	€553.04 per 1,000 litres
	Unleaded petrol	€442.68 per 1,000 litres
	Super unleaded petrol	€547.79 per 1,000 litres
	Aviation gasoline	€276.52 per 1,000 litres
	Heavy Oil:
	Used as a propellant with a maximum sulphur content of 50 milligrammes per kilogramme	€368.05 per 1,000 litres
	Other heavy oil used as a propellant	€420.44 per 1,000 litres
	Kerosene used other than as a propellant	€31.74 per 1,000 litres
	Fuel oil	€14.78 per 1,000 litres
	Other heavy oil	€47.36 per 1,000 litres
	Liquefied Petroleum Gas:
	Used as a propellant	€63.59 per 1,000 litres
	Other liquefied petroleum gas	€20.86 per 1,000 litres
	Substitute Fuel:
	Used as a propellant	€368.05 per 1,000 litres
	Other substitute fuel	€47.36 per 1,000 litres

”.

and

• (b) with effect as on and from such day as the Minister may appoint by order under section 70, by substituting the following for Schedule 2 (inserted by subsection (a)) to that Act:

	Rates of Mineral Oil Tax	Rates of Mineral Oil Tax
	Description of Mineral Oil	Rate of Tax
	Light Oil:
	Leaded petrol	€553.04 per 1,000 litres
	Unleaded petrol with a maximum sulphur content of 10 milligrammes per kilogramme	€442.68 per 1,000 litres
	Other unleaded petrol	€484.00 per 1,000 litres
	Super unleaded petrol	€547.79 per 1,000 litres
	Aviation gasoline	€276.52 per 1,000 litres
	Heavy Oil:
	Used as a propellant with a maximum sulphur content of 10 milligrammes per kilogramme	€368.05 per 1,000 litres
	Other heavy oil used as a propellant	€420.44 per 1,000 litres
	Kerosene used other than as a propellant	€31.74 per 1,000 litres
	Fuel oil	€14.78 per 1,000 litres
	Other heavy oil	€47.36 per 1,000 litres
	Liquefied Petroleum Gas:
	Used as a propellant	€63.59 per 1,000 litres
	Other liquefied petroleum gas	€20.86 per 1,000 litres
	Substitute Fuel:
	Used as a propellant	€368.05 per 1,000 litres
	Other substitute fuel	€47.36 per 1,000 litres
	Coal:
	For business use	€4.18 per tonne
	For other use	€8.36 per tonne

”.

65 Amendment of section 94 (interpretation) of Finance Act 1999.

65.—Section 94 of the Finance Act 1999 is amended—

• (a) in subsection (1):

• (i) by substituting the following definition for the definition of “authorised warehousekeeper”:

“ ‘authorised warehousekeeper’ means a person authorised by the Commissioners under section 109 of the Finance Act 2001 to produce, process, hold, receive or dispatch mineral oil under a suspension arrangement;”,

• (ii) by inserting the following definitions after the definition of “biomass”:

“ ‘business use’, subject to Article 11 of the Directive, means use by a business entity which independently carries out, in any place, the supply of goods and services;

‘charitable organisation’ means any body of persons or trust established for charitable purposes;

‘coal’ includes lignite and solid fuels manufactured from coal or lignite;”,

• (iii) by substituting the following definition for the definition of “the Directive”:

“ ‘the Directive’ means Council Directive No. 2003/96/EC of 27 October 2003¹;”,

• (iv) by inserting the following definition after the definition of “the Directive”:

“ ‘dual use’ means use both as a heating fuel and for purposes other than as a motor fuel and heating fuel and includes use for chemical reduction and in electrolytic and metallurgical processes;”,

• (v) by inserting the following definition after the definition of “dumper”:

“ ‘energy intensive business’ means any business entity where either the purchases of energy products and electricity amount to at least 3 per cent of the production value, or the mineral oil tax payable amounts to at least 0.5 per cent of the added value;”,

• (vi) by inserting the following definition after the definition of “glasshouse”:

“ ‘greenhouse gas emissions permit’ has the meaning assigned to it by Article 2(1) of the European Communities (Greenhouse Gas Emissions Trading) Regulations 2004 (S.I. No. 437 of 2004);”,

• (vii) by inserting the following definition after the definition of “horticultural producer”:

“ ‘household’ means a premises used as a dwelling;”,

• (viii) by substituting the following definition for the definition of “mineral oil”:

“ ‘mineral oil’ means hydrocarbon oil, liquefied petroleum gas, substitute fuel, coal and additives;”,

• (ix) by inserting the following definition after the definition of “mineral oil”:

“ ‘mineralogical process’ means a process classified in the NACE nomenclature under code DI 26 ‘manufacture of other non-metallic mineral products’ in Council Regulation (EEC) No. 3037/90 of 9 October 1990² on the statistical classification of economic activities in the European Community;”,

and

• (x) by substituting the following definition for the definition of “tax warehouse”:

“ ‘tax warehouse’ means a premises or place approved by the Commissioners under section 109 of the Finance Act 2001 where mineral oil is produced, processed, held, received or dispatched under a suspension arrangement by an authorised warehousekeeper in the course of business;”,

• (b) by inserting the following subsections after subsection (2):

• “(3) A word or expression that is used in this Chapter and which is also used in Part 2 of the Finance Act 2001 has, unless a meaning is assigned to it by subsection (1) or (2) or the contrary intention otherwise appears, the same meaning in this Chapter as it has in that Part.

• (4) A word or expression that is used in this Chapter and which is also used in the Directive has, unless a meaning is assigned to it by subsection (1), (2) or (3) or the contrary intention otherwise appears, the same meaning in this Chapter as it has in the Directive.”.

66 Amendment of section 95 (charge of tax) of Finance Act 1999.

66.—Section 95 of the Finance Act 1999 is amended—

• (a) by substituting the following for subsection (2):

• “(2) For the purposes of charging mineral oil tax on mineral oil other than coal the volume of mineral oil shall be ascertained at a temperature of 15° Celsius and in the manner specified by the Commissioners.”,

and

• (b) by substituting the following for subsection (4):

• “(4) Notwithstanding the generality of subsection (1), only mineral oil coming within the definition of “energy products” in Article 2.1 of the Directive, substitute fuel and additives shall be subject to mineral oil tax.”.

67 Amendment of section 100 (reliefs from mineral oil tax for certain mineral oils) of Finance Act 1999.

67.—Section 100 of the Finance Act 1999 is amended—

• (a) in subsection (1) by substituting the following for paragraph (m) (inserted by the Finance Act 2004):

• “(m) heavy oil which is intended for use or which has been used in aircraft engines during testing and maintenance of such engines;

• (n) mineral oil present, at the time of importation into the State from another Member State, in the standard tank of a mechanically propelled vehicle, including a private pleasure craft, where such oil has not been released for use as a propellant but where such oil is permitted, under the laws in force in such Member State, to be used in such vehicle.”,

and

• (b) by substituting, from such day as the Minister may appoint by order under section 70, the following for subsections (2) and (3):

• “(2) Without prejudice to subsection (1), and subject to such conditions as the Commissioners may prescribe or otherwise impose, a relief from mineral oil tax shall be granted in respect of coal which is shown to the satisfaction of the Commissioners to be intended for use or to have been used—

  • (a) for the generation of electricity,

  • (b) for combined heat and power generation,

  • (c) for agricultural, horticultural or piscicultural works, and in forestry,

  • (d) for dual use,

  • (e) for mineralogical processes,

  • (f) for household use,

  • (g) by a charitable organisation,

  • (h) as fuel for trains,

  • (i) by an energy intensive business which holds a greenhouse gas emissions permit.

• (3) Without prejudice to subsections (1) and (2), and subject to such conditions as the Commissioners may prescribe or otherwise impose, a relief from mineral oil tax amounting to one-half of the chargeable rate shall be granted in respect of coal which is shown to the satisfaction of the Commissioners to be intended for use or to have been used by a business which is not an energy intensive business and which holds a greenhouse gas emissions permit.

• (4) Where mineral oil is eligible for relief from tax under the provisions of subsection (1), (2) or (3) the relief may be granted by the Commissioners by means of remission or repayment of mineral oil tax.

(5)(a) Claims for remission or repayment under subsection (4) shall be made in such form as the Commissioners may direct and shall be in respect of coal delivered or other mineral oil used within a period of not less than one and not more than 6 calendar months.

- (*b*) A repayment under subsection (4) may not be made unless the claim is made within 4 months following the end of each such period or within such longer period as the Commissioners may, in any particular case, allow.”.

68 Amendment of section 103 (presumptions in certain proceedings) of Finance Act 1999.

68.—Section 103 of the Finance Act 1999 is amended in subsection (4) (inserted by section 95 of the Finance Act 2003) by substituting “50 milligrammes” for “350 milligrammes”.

69 Amendment of Chapter 1 (mineral oil tax) of Part 2 of Finance Act 1999.

69.—Chapter 1 of Part 2 of the Finance Act 1999 is amended—

• (a) by inserting the following after section 95:

“Liability to mineral oil tax on coal.	95A.—Liability to mineral oil tax on coal shall arise at the time such coal is the subject of final delivery, and shall be paid by the person to whom it is delivered.”,

and

• (b) by inserting the following after section 101:

“Registration.	101A.—Every person who makes final delivery of coal, otherwise than to households or to charitable organisations, and every person who is liable to pay mineral oil tax on coal shall register for that purpose with the Commissioners in accordance with such procedures as the Commissioners may prescribe or otherwise impose.”.

70 Commencement.

70.—With the exception of sections 64(a), 67(a) and 68 this Chapter comes into operation on such day as the Minister for Finance may appoint by order, and different days may be so appointed for different provisions or for different purposes.

Chapter 3 Tobacco Products Tax

71 Interpretation (Chapter 3).

71.—(1) In this Chapter and in Schedule 2, except where the context otherwise requires—

“authorised warehousekeeper” means a person authorised by the Commissioners to produce, process, hold, receive or dispatch in the course of business, excisable products under a suspension arrangement;

“cigarettes” means—

• (a) rolls of tobacco capable of being smoked as they are and which are not cigars,

• (b) rolls of tobacco which, by simple non-industrial handling, are inserted into cigarette paper tubes or wrapped in cigarette paper,

• (c) products consisting in whole or in part of substances other than tobacco but otherwise conforming to the criteria set out in paragraph (a) or (b),

and to which Council Directive No. 95/59/EC of 27 November 1995¹ relates;

“cigars” means—

• (a) rolls of tobacco made entirely of natural tobacco,

• (b) rolls of tobacco with an outer wrapper of natural tobacco,

• (c) rolls of tobacco with—

• (i) a threshed blend filler, and

• (ii) an outer wrapper of the normal colour of a cigar covering the product in full, including where appropriate the filter but not, in the case of tipped cigars, the tip and a binder, both being of reconstituted tobacco,

where the unit weight, excluding the filter or mouth-piece, is not less than 1.2 grammes and where the wrapper is fitted in spiral form with an acute angle of at least 30 degrees to the longitudinal axis of the cigar,

• (d) rolls of tobacco with—

• (i) a threshed blend filler, and

• (ii) an outer wrapper of the normal colour of a cigar of reconstituted tobacco, covering the product in full, including where appropriate the filter but not, in the case of tipped cigars, the tip,

where the unit weight, excluding the filter or mouth-piece, is not less than 2.3 grammes and the circumference over at least one-third of the length is not less than 34 millimetres,

• (e) products consisting in part of substances other than tobacco but otherwise conforming to the criteria set out in paragraph (a), (b), (c) or (d) provided they have:

• (i) a wrapper of natural tobacco;

• (ii) a wrapper and binder both of reconstituted tobacco; or

• (iii) a wrapper of reconstituted tobacco,

and to which Council Directive No. 95/59/EC of 27 November 1995 relates;

“Commissioners” means the Revenue Commissioners;

“Community” has the meaning assigned to it by section 96 of the Finance Act 2001;

“fine-cut tobacco for the rolling of cigarettes” means smoking tobacco in which more than 25 per cent by weight of the tobacco particles have a cut width of less than 1 millimetre and to which Council Directive No. 95/59/EC of 27 November 1995 relates;

“materials” means tobacco in any form and any other substance to be used for incorporation in tobacco products;

“Member State” means a Member State of the Community;

“Minister” means the Minister for Finance;

“officer” means an officer of the Commissioners;

“prescribed” means specified in or determined in regulations made by the Commissioners under section 83;

“reconstituted tobacco” means tobacco (whether or not on a backing) that is made by agglomerating tobacco dust or finely divided tobacco derived from tobacco leaves or tobacco refuse and is generally put up in the form of rectangular sheets or strip;

“records” means any books, accounts, documents or other recorded information including information in a computer or in other nonlegible form;

“release for consumption” means—

• (a) any departure, including irregular departure, from a suspension arrangement,

• (b) any manufacture, including irregular manufacture, of tobacco products outside a suspension arrangement, or

• (c) any importation of tobacco products, including irregular importation, where such tobacco products have not been placed under a suspension arrangement;

“smoking tobacco” means—

• (a) tobacco which has been cut or otherwise split, twisted or pressed into blocks and which is capable of being smoked without further industrial processing,

• (b) tobacco refuse which is put up for retail sale and can be smoked and is not a cigar or cigarette,

• (c) products consisting in whole or in part of substances other than tobacco but otherwise conforming to the criteria set out in paragraph (a) or (b),

and to which Council Directive No. 95/59/EC of 27 November 1995 relates;

“specified tobacco products” means cigarettes and fine-cut tobacco for the rolling of cigarettes and any other tobacco products in respect of which an order under section 73 of this Chapter relates;

“suspension arrangement” means an arrangement under which excisable products are produced, processed, held or moved, excise duty being suspended;

“tax” means tobacco products tax imposed by section 72;

“tax representative” means a person, established in the State, who is authorised by the Commissioners to act in the State as an agent on behalf of persons delivering excisable products from another Member State;

“tax stamp” means a label issued by the Commissioners under section 73 of this Chapter for the purpose of collecting tobacco products tax;

“tax warehouse” means a premises or place approved by the Commissioners, where excisable products are produced, processed, held, received or dispatched under a suspension arrangement by an authorised warehousekeeper in the course of business;

“tobacco products” means cigarettes, cigars, fine-cut tobacco for the rolling of cigarettes or other smoking tobacco except where such products contain no tobacco and are either—

• (a) used exclusively for medical purposes, or

• (b) products commonly known as herbal cigarettes or herbal smoking mixtures.

• (2) A product shall be deemed, for the purposes of this Chapter to be manufactured when, in the opinion of the Commissioners, it has taken on the essential character of a tobacco product.

• (3) Any cigarette which is greater than 9 centimetres in length excluding any filter or mouthpiece shall, for the purposes of tobacco products tax, be treated as if each 9 centimetres or part thereof, of its length were a separate cigarette.

• (4) A product shall not be deemed to be a tobacco product unless it is a cigar or cigarette or smoking tobacco.

• (5) A word or expression that is used in this Chapter and which is also used in Part 2 of the Finance Act 2001 has, unless a meaning is provided by subsection (1) or the contrary intention otherwise appears, the same meaning in this Chapter as it has in that Part.

72 Charging and rates.

72.—In addition to any other duty that may be chargeable, and subject to the provisions of this Chapter and any regulations made under it, a duty of excise, to be known as tobacco products tax, shall be charged, levied and paid at the rates specified in Schedule 2 on all tobacco products—

• (a) produced in the State, or

• (b) imported into the State.