Finance Act 2007

(5) Where in any year of assessment section 485E applies to an individual, then for the purposes of section 485F the excess relief for the year shall be reduced by an amount equal to the amount of the relevant excess relief.

Miscellaneous (Chapter 4).

669K.— (1) For the purposes of determining the market value of a stallion to which this Chapter applies, the Revenue Commissioners may consult with such person or body of persons as, in their opinion, may be of assistance to them.

(2) Notwithstanding any other provisions of the Tax Acts, trading stock comprising stallions shall be disregarded for all purposes of section 666.

(3) In a case in which in any chargeable period the computation of the amount of income of a person to be charged to tax under Case IV of Schedule D under this Chapter results in a loss, then, notwithstanding section 383, the amount of the loss may not be deducted from or set off against other income charged to tax under Case IV of Schedule D arising in that chargeable period, and any loss, when carried forward to a subsequent chargeable period, may only be deducted from or set off against income to which section 669H(2)(b) applies arising in that subsequent chargeable period.”.

(2) Subsection (1) comes into operation on the making of an order to that effect by the Minister for Finance.

27. Amendment of Schedule 26A (donations to approved bodies, etc.) to Principal Act.

27.— (1) Schedule 26A to the Principal Act is amended—

(a) in Part 1—

(i) by deleting “in the State” in each place it occurs in paragraphs 3 to 7, and

(ii) by deleting paragraphs 8 to 16, and paragraph 18,

and

(b) in Part 2 by substituting the following for the definition of “approved body” in paragraph 1:

“ ‘ approved body ’ means any body or institution which may be approved of by the Minister for Finance and which—

(a) provides any course one of the conditions of entry to which is related to the results of the Leaving Certificate Examination, a matriculation examination of a recognised university in the State or an equivalent examination held outside the State, or

(b) (i) is established on a permanent basis solely for the advancement of one or more approved subjects,

(ii) contributes to the advancement of that subject or those subjects on a national or regional basis, and

(iii) is prohibited by its constitution from distributing to its members any of its assets or profits;”.

(2) Subsection (1) applies as on and from 1 February 2007.

28. Capital allowances for qualifying residential units associated with registered nursing homes.

28.— (1) Part 9 of the Principal Act is amended

(a) in section 268

(i) in subsection (3A)

(I) by substituting “Subject to subsections (3B) to (3E), in this section” for “In this section”, and

(II) by substituting the following for subparagraph (i) of paragraph (d):

“(i) is leased to a person and, as the case may be, the spouse of that person

(I) who is or, as the case may be, are not connected (within the meaning of section 10) with the lessor,

(II) who has or have been selected as the occupant or occupants of the house by the registered nursing home, and

(III) either the person or the spouse of that person has been certified by a person, who is registered in the General Register of Medical Practitioners, as requiring such accommodation by reason of old age or infirmity,

or”,

(ii) by substituting the following for subsection (3B):

“(3B) (a) For the purposes of this section ‘house’, in relation to a qualifying residential unit, has the same meaning as in section 372AK.

(b) For the purposes only of the making of allowances and charges under this Part but subject to subsection (3C) and sections 270 and 316 (as amended by the Finance Act 2007), as respects capital expenditure incurred in the period commencing on 25 March 2002 and ending on 30 April 2010, a house in use as a qualifying residential unit shall be deemed to be a building in use for the purposes of a trade referred to in subsection (1)(g).”,

and

(iii) by inserting the following after subsection (3C):

“(3D) Where the relevant interest in relation to capital expenditure incurred on the construction or refurbishment of all qualifying residential units in a development is held by a company (within the meaning of section 4(1)) then subsection (3A) shall apply as if subparagraphs (iv) and (v) of paragraph (c) of that subsection were deleted.

(3E) A house shall not be a qualifying residential unit for the purposes of this section unless

(a) the following information has been provided to the Health Service Executive, by the person who is entitled to the relevant interest in relation to the capital expenditure incurred on the construction or refurbishment of the house, for onward transmission to the Minister for Health and Children and the Minister for Finance:

(i) the amount of the capital expenditure actually incurred on the construction or refurbishment of the house;

(ii) the number and nature of the investors that are investing in the house;

(iii) the amount to be invested by each investor; and

(iv) the nature of the structures which are being put in place to facilitate the investment in the house,

together with such other information as may be specified by the Minister for Finance, in consultation with the Minister for Health and Children, as being of assistance in evaluating the costs, including but not limited to exchequer costs, and the benefits arising from the operation of tax relief under this Part for qualifying residential units,

(b) the Health Service Executive, in consultation with the Minister for Health and Children, gives a certificate in writing after the house is first leased or, where capital expenditure is incurred on the refurbishment of a house, first leased subsequent to the incurring of that expenditure stating that it is satisfied that

(i) the house and the development in which it is comprised complies with all the conditions mentioned in paragraphs (a), (b), (c) and (d) of subsection (3A), and

(ii) the information required in accordance with paragraph (a) of this subsection has been provided,

and

(c) an annual report in writing is provided, by the person who is entitled to the relevant interest in relation to the capital expenditure incurred on the construction or refurbishment of the house, to the Health Service Executive, for onward transmission to the Minister for Health and Children and the Minister for Finance, by the end of each year in the 20 year period referred to in section 272(4)(fa) (inserted by the Finance Act 2007), which

(i) confirms whether the house and the development in which it is comprised continue to comply with all the conditions mentioned in paragraphs (a), (b), (c) and (d) of subsection (3A), and

(ii) provides details of the level of occupation of the house for the previous year including the age of and, as the case may be, the nature of the infirmity of the occupants.”,

(b) in section 270 by inserting the following subsection after subsection (7):

“(8) Where capital expenditure is incurred on or after 1 May 2007 under a contract or agreement which is entered into on or after that date for the construction, refurbishment or development of a qualifying residential unit as is referred to in subsection (4)(i), then

(a) subsection (4) shall apply as if the reference to ‘31 July 2008’ were a reference to ‘30 April 2010’,

(b) subsection (5) shall apply as if

(i) the reference to ‘subject to subsections (6) and (7)’ were a reference to ‘subject to subsections (6) to (8)’, and

(ii) the following paragraphs were substituted for paragraphs (a) and (b):

‘(a) in the case of expenditure incurred by a company (within the meaning of section 4(1)) in the period from 1 May 2007 to 30 April 2010, to 75 per cent, and

(b) in the case of expenditure incurred by a person other than a company (within the meaning of section 4(1)) in the period from 1 May 2007 to 30 April 2010, to 50 per cent,’,”,

(c) in section 272(4)

(i) in paragraph (f), by inserting “subject to paragraph (fa),” before “in relation to”, and

(ii) by inserting the following paragraph after paragraph (f):

“(fa) where subsection (8) of section 270 applies in relation to a qualifying residential unit as is referred to in subsection (4)(i) of that section

(i) 20 years beginning with the time when the unit was first used, or

(ii) where capital expenditure on the refurbishment of the unit is incurred, 20 years beginning with the time when the unit was first used subsequent to the incurring of that expenditure,”,

(d) in section 274(1)(b)

(i) in subparagraph (iia), by inserting “subject to subparagraph (iib),” before “in relation to”, and

(ii) by inserting the following subparagraph after subparagraph (iia):

“(iib) where subsection (8) of section 270 applies in relation to a qualifying residential unit as is referred to in subsection (4)(i) of that section

(I) 20 years after the unit was first used, or

(II) where capital expenditure on the refurbishment of the unit is incurred, 20 years after the unit was first used subsequent to the incurring of that expenditure,”,

and

(e) in section 316(2B)

(i) by deleting “or” at the end of paragraph (b) and by substituting “31 July 2008, or” for “31 July 2008,” in paragraph (c), and

(ii) by inserting the following paragraph after paragraph (c):

“(d) where subsection (8) of section 270 applies in relation to a qualifying residential unit as is referred to in subsection (4)(i) of that section, the period from 1 May 2007 to 30 April 2010,”.

(2) Subsection (1) of this section applies as respects capital expenditure incurred on or after 1 May 2007 under a contract or agreement for the construction, refurbishment or development of a qualifying residential unit (within the meaning of section 268(3A) of the Principal Act) which is entered into on or after that date.

29. Mid-Shannon corridor tourism infrastructure investment scheme.

29.— (1) The Principal Act is amended—

(a) in Part 10, by inserting the following after Chapter 11:

Mid-Shannon Corridor Tourism Infrastructure Investment Scheme

Interpretation, applications for approval and certification.

372AW.— (1) In this Chapter—

‘ accommodation building ’, in relation to a project, means a building or structure or part of a building or structure which consists of accommodation facilities or which is to be used or is suitable for use for the provision of such facilities;

‘ market value ’, in relation to a building or structure, means the price which the unencumbered fee simple of the building or structure would fetch if sold in the open market in such manner and subject to such conditions as might reasonably be calculated to obtain for the vendor the best price for the building or structure, less the part of that price which would be attributable to the acquisition of, or of rights in or over, the land on which the building or structure is constructed;

‘ mid-Shannon corridor ’ means the corridor of land comprising all qualifying mid-Shannon areas;

‘ mid-Shannon Tourism Infrastructure Board ’ means a board consisting of not more than 5 persons selected for the purposes of this Chapter by the Minister in consultation with the Minister for Finance;

‘ Minister ’ means the Minister for Arts, Sport and Tourism;

‘ project ’ means the construction or refurbishment of buildings and structures comprising—

(a) a holiday camp of the type referred to in section 372AX(1)(b), or

(b) one or more qualifying tourism infrastructure facilities,

the site or sites of which is or are wholly within a qualifying mid-Shannon area;

‘ property developer ’ means a person carrying on a trade which consists wholly or mainly of the construction or refurbishment of buildings or structures with a view to their sale;

‘ qualifying mid-Shannon area ’ means any area described in Schedule 8B;

‘ qualifying period ’ means a period of 3 years commencing on the date on which this Chapter comes into effect;

‘ qualifying tourism infrastructure facilities ’ means such class or classes of facilities, comprising of buildings and structures only, as may be approved for the purposes of this Chapter by the Minister, in consultation with the Minister for Finance, and published in the relevant guidelines;

‘ refurbishment ’, in relation to a building or structure, means any work of construction, reconstruction, repair or renewal, including the provision or improvement of water, sewerage or heating facilities, carried out in the course of—

(a) the repair or restoration, or

(b) maintenance in the nature of repair or restoration,

of the building or structure;

‘ relevant guidelines ’ mean guidelines issued in accordance with subsection (3) of this section or any guidelines issued in accordance with that subsection which amend or replace those guidelines.

(2) (a) Notwithstanding sections 372AX and 372AY, but subject to the subsequent provisions of this section and to section 372AZ, no relief from income tax or corporation tax, as the case may be, may be granted by virtue of this Chapter in respect of capital expenditure incurred in the qualifying period on the construction or refurbishment of a building or structure unless the mid-Shannon Tourism Infrastructure Board has—

(i) prior to such expenditure being incurred, but subject to paragraph (b), granted approval in principle in relation to the construction or refurbishment of the building or structure, and

(ii) after the expenditure is incurred, certified in writing that the construction or refurbishment which was carried out is in accordance with the criteria specified in the relevant guidelines, having regard to any relevant conditions and requirements imposed by the Board in the approval granted under subparagraph (i).

(b) Approval in principle shall not be granted in accordance with paragraph (a)(i) unless an application for such approval, in which the information and details as may be required in accordance with subsection (3)(h) are included, is received by the mid-Shannon Tourism Infrastructure Board within a period of one year commencing on the date on which this Chapter comes into effect.

(3) Subject to subsection (4), for the purposes of approval and certification in accordance with subsection (2) and, as the case may be, certification in accordance with section 372AX(1)(d) or 372AY(1)(g) the Minister shall, in consultation with the Minister for Finance, issue guidelines to which the mid-Shannon Tourism Infrastructure Board shall have regard in deciding whether to grant approval in principle or to issue certification in relation to any building or structure and which guidelines may include criteria in relation to all or any one or more of the following:

(a) the nature and extent of the contribution which the project, in which the building or structure is comprised, makes to tourism development in the mid-Shannon corridor or the qualifying mid-Shannon area;

(b) coherence with national tourism strategy;

(c) environmental sensitivity, having particular regard to any area which is—

(i) a European site within the meaning of the European Communities (Natural Habitats) Regulations 1997 (S.I. No. 94 of 1997), or

(ii) a natural heritage area, a nature reserve or a refuge for fauna for the purposes of the Wildlife Acts 1976 and 2000;

(d) the amenities and facilities required to be provided in each type of project;

(e) the nature of and maximum extent to which accommodation buildings (if any) are allowable in each type of project;

(f) specific standards of design and construction in relation to buildings and structures which may qualify for relief under this Chapter;

(g) relevant planning matters, including the need for consistency with the requirements of a development plan or a local area plan within the meaning of those terms in the Planning and Development Act 2000;

(h) the details and information required to be provided in an application for approval or certification in accordance with section 372AW(2) and, as the case may be, an application for certification in accordance with section 372AX(1)(d) or 372AY(1)(g); and

(i) matters relating to the provision of information in accordance with sections 372AX(1)(c) and 372AY(1)(f),

together with such other matters as the Minister, in consultation with the Minister for Finance, may consider are required to be included.

(4) (a) Subject to paragraphs (b) and (c), approval and certification in accordance with subsection (2) shall not be granted or issued by the mid-Shannon Tourism Infrastructure Board in relation to capital expenditure incurred in the qualifying period on the construction or refurbishment of one or more than one accommodation building comprised in a project to the extent that such expenditure exceeds (or, where an application for approval is involved, is projected to exceed) an amount (referred to in this subsection as the ‘limit amount’) which is equal to the lesser of—

(i) 50 per cent, or such lower percentage as may be specified (in accordance with subsection (3)(e)) in the relevant guidelines for the type of project involved, of the total amount of the capital expenditure incurred in the qualifying period on the construction or refurbishment of all the buildings or structures comprised in the project, and

(ii) the amount of the capital expenditure incurred in the qualifying period on the construction or refurbishment of buildings and structures comprised in the project which are other than accommodation buildings.

(b) In any case where—

(i) there is more than one accommodation building comprised in a project, and

(ii) the aggregate of the amounts of capital expenditure incurred in the qualifying period on the construction or refurbishment of each accommodation building exceeds the limit amount,

then that aggregate shall, for the purposes of an application for approval or for certification in accordance with subsection (2), be reduced to an amount equivalent to the limit amount and that equivalent amount shall be apportioned on a just and reasonable basis between all the accommodation buildings comprised in the project.

(c) Subject to the criteria in the relevant guidelines being satisfied, the mid-Shannon Tourism Infrastructure Board may grant approval or issue certification in accordance with subsection (2) in relation to an accommodation building—

(i) where there is one accommodation building comprised in a project, only in relation to the amount of the capital expenditure incurred on the construction or refurbishment of the building in the qualifying period as does not exceed the limit amount, and

(ii) where paragraph (b) applies, provided that it is satisfied with the basis on which the apportionment has been made, only in relation to that part of the equivalent amount (as referred to in paragraph (b)) which is attributable to the buildingfollowing the apportionment made in accordance with that paragraph.

Accelerated capital allowances in relation to the construction or refurbishment of certain registered holiday camps.

372AX.— (1) In this section ‘ building or structure to which this section applies ’ means a building or structure—

(a) the site of which is wholly within a qualifying mid-Shannon area,

(b) which is in use as a holiday camp—

(i) registered in the register of holiday camps kept under the Tourist Traffic Acts 1939 to 2003, and

(ii) which meets the requirements of the relevant guidelines in relation to the types of amenities and facilities that need to be provided in a holiday camp for the purposes of this Chapter,

(c) in relation to which the following data has been provided to the mid-Shannon Tourism Infrastructure Board for onward transmission to the Minister and the Minister for Finance:

(i) (I) the amount of the capital expenditure actually incurred in the qualifying period on the construction or refurbishment of the building or structure, and

(II) where subsection (4) of section 372AW applies in relation to an accommodation building, the amount of such expenditure which is eligible for certification in accordance with that section;

(ii) the number and nature of the investors that are investing in the building or structure;

(iii) the amount to be invested by each investor; and

(iv) the nature of the structures which are being put in place to facilitate the investment in the building or structure;

together with such other information as may be specified in the relevant guidelines as being of assistance to the Minister for Finance in evaluating the costs, including but not limited to exchequer costs, and the benefits arising from the operation of tax relief for buildings and structures under this Chapter, and

(d) in respect of which the mid-Shannon Tourism Infrastructure Board gives a certificate in writing after the building or structure is first used or, where capital expenditure is incurred on the refurbishment of a building or structure, first used subsequent to the incurring of that expenditure—

(i) stating that it is satisfied that the conditions in paragraphs (a), (b) and (c) have been met,

(ii) confirming the date of first use or, as the case may be, first use after refurbishment, and

(iii) which includes certification in accordance with section 372AW(2)(a)(ii) or a copy of such certification (if previously issued).

(2) Subject to subsections (3) and (4) and to section 372AZ, Chapter 1 of Part 9 applies in relation to capital expenditure incurred in the qualifying period on the construction or refurbishment of a building or structure to which this section applies as if—

(a) in section 272—

(i) in subsection (3), the following were substituted for paragraph (c):

‘(c) in relation to a building or structure to which section 372AX applies, 15 per cent of the capital expenditure referred to in subsection (2) of that section,’,

and

(ii) in subsection (4), the following were substituted for paragraph (c):

‘(c) in relation to a building or structure to which section 372AX applies, 15 years beginning with the time when the building or structure was first used or, where capital expenditure on the refurbishment of the building or structure is incurred, 15 years beginning with the time when the building or structure was first used subsequent to the incurring of that expenditure,’,

and

(b) in section 274(1)(b), the following were substituted for subparagraph (iii):

‘(iii) in relation to a building or structure to which section 372AX applies, 15 years after the building or structure was first used or, where capital expenditure on the refurbishment of the building or structure is incurred, 15 years after the building or structure was first used subsequent to the incurring of that expenditure,’.

(3) In the case where capital expenditure is incurred in the qualifying period on the refurbishment of a building or structure to which this section applies, subsection (2) shall apply only if the total amount of the capital expenditure so incurred is not less than an amount equal to 20 per cent of the market value of the building or structure immediately before that expenditure was incurred.

(4) In determining for the purposes of this Chapter whether and to what extent capital expenditure incurred on the construction or refurbishment of a building or structure to which this section applies is incurred or not incurred in the qualifying period, such an amount of that capital expenditure as is properly attributable to work on the construction or, as the case may be, refurbishment of the building or structure actually carried out during the qualifying period shall (notwithstanding any other provision of the Tax Acts as to the time when any capital expenditure is or is to be treated as incurred) be treated as having been incurred in that period.

Capital allowances in relation to the construction or refurbishment of certain tourism infrastructure facilities.

372AY.— (1) In this section ‘ qualifying premises ’ means a building or structure—

(a) the site of which is wholly within a qualifying mid-Shannon area,

(b) which apart from this section is not an industrial building or structure within the meaning of section 268 or deemed to be such a building or structure,

(c) which is in use for the purposes of the operation of one or more qualifying tourism infrastructure facilities,

(d) (i) subject to subparagraph (ii), which does not include a building or structure or part of a building or structure which is a licensed premises (as defined in section 2 of the Intoxicating Liquor Act 1988), but

(ii) which may include a building or structure or part of a building or structure which is a restaurant (as defined in section 6 of the Intoxicating Liquor Act 1988) in relation to which—

(I) a wine retailer’s on-licence, within the meaning of the Finance (1909-10) Act 1910, is currently in force, or

(II) a special restaurant licence, within the meaning of the Intoxicating Liquor Act 1988, has been granted under section 9 of that Act,

(e) which does not include a building or structure or part of a building or structure in use as a facility in which gambling, gaming or wagering of any sort is carried on for valuable consideration or which supports the carrying on of such activities,

(f) in relation to which the following data has been provided to the mid-Shannon Tourism Infrastructure Board for onward transmission to the Minister and the Minister for Finance:

(i) (I) the amount of the capital expenditure actually incurred in the qualifying period on the construction or refurbishment of the building or structure; and

(II) where subsection (4) of section 372AW applies in relation to an accommodation building, the amount of such expenditure which is eligible for certification in accordance with that section;

(ii) the number and nature of the investors that are investing in the building or structure;

(iii) the amount to be invested by each investor; and

(iv) the nature of the structures which are being put in place to facilitate the investment in the building or structure;

together with such other information as may be specified in the relevant guidelines as being of assistance to the Minister for Finance in evaluating the costs, including but not limited to exchequer costs, and the benefits arising from the operation of tax relief for buildings and structures under this Chapter, and

(g) in respect of which the mid-Shannon Tourism Infrastructure Board gives a certificate in writing after the building or structure is first used or, where capital expenditure is incurred on the refurbishment of the building or structure, first used subsequent to the incurring of that expenditure—

(i) stating that it is satisfied that the conditions in paragraphs (a), (b), (c), (d), (e) and (f) have been met,

(ii) confirming the date of first use or, as the case may be, first use after refurbishment, and

(iii) which includes certification in accordance with section 372AW(2)(a)(ii) or a copy of such certification (if previously issued).

(2) (a) Subject to paragraph (b), subsections (3) to (5) and section 372AZ, the provisions of the Tax Acts relating to the making of allowances and charges in respect of capital expenditure incurred on the construction or refurbishment of an industrial building or structure shall, notwithstanding anything to the contrary in those provisions, apply—

(i) as if the qualifying premises were, at all times at which it is a qualifying premises, a building or structure in respect of which an allowance is to be made for the purposes of income tax or corporation tax, as the case may be, under Chapter 1 of Part 9 by reason of its use for a purpose specified in section 268(1)(a), and

(ii) where any activity carried on in the qualifying premises is not a trade, as if (for the purposes only of the making of allowances and charges by virtue of subparagraph (i)), it were a trade.

(b) An allowance shall be given by virtue of this subsection in respect of any capital expenditure incurred on the construction or refurbishment of a qualifying premises only in so far as that expenditure is incurred in the qualifying period.

(3) In the case where capital expenditure is incurred in the qualifying period on the refurbishment of a qualifying premises, subsection (2) shall apply only if the total amount of the capital expenditure so incurred is not less than an amount equal to 20 per cent of the market value of the building or structure immediately before that expenditure was incurred.

(4) For the purposes of the application, by subsection (2), of Chapter 1 of Part 9 in relation to capital expenditure incurred in the qualifying period on the construction or refurbishment of a qualifying premises—

(a) section 272 shall apply as if—

(i) in subsection (3), the following were substituted for paragraph (a):

‘(a) in relation to a building or structure to which section 372AY applies, 15 per cent of the capital expenditure referred to in subsection (2)(b) of that section,’,

and

(ii) in subsection (4), the following were substituted for paragraph (a):

‘(a) in relation to a building or structure to which section 372AY applies, 15 years beginning with the time when the building or structure was first used or, where capital expenditure on the refurbishment of the building or structure is incurred, 15 years beginning with the time when the building or structure was first used subsequent to the incurring of that expenditure,’,

and

(b) section 274(1)(b) shall apply as if the following were substituted for subparagraph (i):

‘(i) in relation to a building or structure to which section 372AY applies, 15 years after the building or structure was first used or, where capital expenditure on the refurbishment of the building or structure is incurred, 15 years after the building or structure was first used subsequent to the incurring of that expenditure,’.

(5) In determining for the purposes of this Chapter whether and to what extent capital expenditure incurred on the construction or refurbishment of a qualifying premises is incurred or not incurred in the qualifying period, such an amount of that capital expenditure as is properly attributable to work on the construction or, as the case may be, refurbishment of the premises actually carried out during the qualifying period shall (notwithstanding any other provision of the Tax Acts as to the time when any capital expenditure is or is to be treated as incurred) be treated as having been incurred in that period.

Restrictions on relief, non-application of relief in certain cases and provision against double relief.

372AZ.— (1) Notwithstanding any other provision of this Chapter, sections 372AX and 372AY shall not apply in respect of expenditure incurred on the construction or refurbishment of a building or structure—

(a) (i) where a property developer is entitled to the relevant interest, within the meaning of section 269, in relation to that expenditure, and

(ii) either the person referred to in subparagraph (i) or a person connected (within the meaning of section 10) with that person incurred the expenditure on the construction or refurbishment of the building or structure concerned,

(b) where any part of such expenditure has been or is to be met, directly or indirectly, by grant assistance or any other assistance which is granted by or through the State, any board established by statute, any public or local authority or any other agency of the State,

(c) unless the potential capital allowances in relation to the building or structure concerned and the project in which it is comprised comply with the requirements of Commission Regulation (EC) No 1628/2006 of 24 October 2006 on the application of Articles 87 and 88 of the European Communities Treaty to national regional investment aid [^5].

(2) Where relief is given by virtue of section 372AX or 372AY in relation to capital expenditure incurred on the construction or refurbishment of a building or structure, relief shall not be given in respect of that expenditure under any other provision of the Tax Acts.

(3) Where—

(a) capital expenditure is incurred in the qualifying period on the construction or refurbishment of an accommodation building, and

(b) subsection (4) of section 372AW applies so as to reduce the amount of such expenditure which is eligible for certification in accordance with that section by the mid-Shannon Tourism Infrastructure Board,

then the amount of the capital expenditure actually incurred in the qualifying period on the construction or refurbishment of the accommodation building which is to be treated as incurred—

(i) for the purposes of the making of allowances and charges under Chapter 1 of Part 9, by virtue of section 372AX or 372AY, (including the making of balancing allowances and charges under section 274 and the calculation of the residue of expenditure under section 277), but

(ii) prior to the operation of subsection (4),

shall be reduced to the amount of the capital expenditure which was eligible for certification by the mid-Shannon Tourism Infrastructure Board in relation to that building.

(4) Where relief under Chapter 1 of Part 9 is, by virtue of section 372AX or 372AY, to apply in relation to capital expenditure incurred in the qualifying period on the construction or refurbishment of a building or structure the site of which is wholly within a qualifying mid-Shannon area described in either Part 1 or Part 5 of Schedule 8B (as inserted by the Finance Act 2007), then the amount of that capital expenditure which is to be treated as incurred for the purposes of the making of allowances and charges under that Chapter (including the making of balancing allowances and charges under section 274 and the calculation of the residue of expenditure under section 277) shall be reduced to 80 per cent of the amount which, apart from this subsection, would otherwise be so treated.

(5) (a) For the purposes of the making of allowances and charges under Chapter 1 of Part 9 as is referred to in subsections (3) and (4), references in the Tax Acts, other than those in section 279 as applied by paragraph (b), to expenditure incurred on the construction or, as the case may be, refurbishment of a building or structure shall be construed as a reference to such expenditure as reduced in accordance with either or both of those subsections.

(b) Section 279 shall apply in relation to a building or structure to which either or both subsections (3) and (4) apply as if—

(i) in subsection (1) of that section, the following were substituted for the definition of ‘the net price paid’:

‘ “ the net price paid ” means the amount represented by A in the equation—

A = B x DCD

D + E

where—

B is the amount paid by a person on the purchase of the relevant interest in the building or structure,

C is the amount of the expenditure actually incurred on the construction of the building or structure as reduced in accordance with either or both subsections (3) and (4) of section 372AZ,

D is the amount of the expenditure actually incurred on the construction of the building or structure, and

E is the amount of any expenditure actually incurred which is expenditure for the purposes of paragraph (a), (b) or (c) of section 270(2).’,

(ii) in subsection (2) of that section, the following were substituted for paragraph (b):

‘(b) the person who buys that interest shall be deemed for those purposes to have incurred, on the date when the purchase price becomes payable, expenditure on the construction of the building or structure equal to that expenditure as reduced in accordance with either or both subsections (3) and (4) of section 372AZ or to the net price paid (within the meaning of that term as applied by section 372AZ(5)) by such person for that interest, whichever is the less;’,

and

(iii) in subsection (3) of that section, the reference to ‘that expenditure or to’ were a reference to ‘that expenditure as reduced in accordance with either or both subsections (3) and (4) of section 372AZ or to’.”,

(b) by inserting the following after Schedule 8A:

“Section 372AW.

SCHEDULE 8B

PART 1

Description of qualifying mid-Shannon areas of Clare

The District Electoral Divisions of Ayle, Ballynahinch, Boherglass, Caherhurley, Cappaghabaun, Carrowbaun, Cloonusker, Coolreagh, Corlea, Derrynagittagh, Drummaan, Fahymore, Feakle, Inishcaltra North, Inishcaltra South, Killaloe, Killokennedy, Killuran, Kilseily, Lackareagh, Loughea, Mountshannon, O’Briensbridge, Ogonnelloe and Scarriff.

PART 2

Description of qualifying mid-Shannon areas of Galway

The District Electoral Divisions of Abbeygormacan, Abbeyville, Balinasloe Rural, Ballinasloe Urban, Ballyglass, Ballynagar, Bracklagh, Clonfert, Clontuskert, Coos, Derrew, Drumkeary, Drummin, Eyrecourt, Kellysgrove, Killimor (Portumna rural area), Kilmacshane, Kilmalinoge, Kilquain, Kiltormer, Kylemore, Laurencetown, Leitrim, Lismanny, Loughatorick, Marblehill, Meelick, Moat, Pallas, Portumna, Tiranascragh, Tynagh and Woodford.

PART 3

Description of qualifying mid-Shannon areas of Offaly

The District Electoral Divisions of Ballycumber, Banagher, Birr Rural, Birr Urban, Broughal, Cloghan, Clonmacnoise, Derryad, Doon, Drumcullen, Eglish, Ferbane, Gallen, Hinds, Hunston, Killyon, Lumcloon, Lusmagh, Mounterin, Moyclare, Shannonbridge, Shannonharbour, Srah and Tinamuck.

PART 4

Description of qualifying mid-Shannon areas of Roscommon

The District Electoral Divisions of Athleague East, Athleague West, Athlone West Rural, Ballydangan, Ballynamona, Castlesampson, Caltragh, Cams, Carnagh, Carrowreagh, Cloonburren, Cloonown, Crannagh, Creagh, Culliagh, Drumlosh, Dysart, Fuerty, Kilcar, Kiltoom, Lackan, Lecarrow, Lismaha, Moore, Mote, Rockhill, Roscommon Rural, Roscommon Urban, Scregg, Taghmaconnell, Thomastown and Turrock.

PART 5

Description of qualifying mid-Shannon areas of Tipperary

The District Electoral Divisions of Aglishcloghane, Ardcrony, Ballina, Ballingarry (in Borrisokane rural area), Ballygibbon, Ballylusky, Ballymackey, Ballynaclogh, Birdhill, Borrisokane, Burgesbeg, Carrig, Carrigatogher, Castletown, Cloghprior, Clohaskin, Cloghjordan, Derrycastle, Finnoe, Graigue (in Borrisokane rural area), Greenhall, Kilbarron, Kilcomenty, Killoscully, Kilkeary, Kilmore, Kilnarath, Knigh, Lackagh, Lorrha East, Lorrha West, Mertonhall, Monsea, Nenagh East Urban, Nenagh Rural, Nenagh West Urban, Newport, Rathcabban, Redwood, Riverstown, Terryglass, Uskane and Youghalarra.

PART 6

Description of qualifying mid-Shannon areas of Westmeath

The District Electoral Divisions of Athlone East Rural, Athlone East Urban, Athlone West Urban, Ardnagragh, Auburn, Ballymore, Bellanalack, Carn, Castledaly, Doonis, Drumraney, Glassan, Killinure, Moate, Mount Temple, Moydrum, Muckanagh, Noughaval, Templepatrick, Tubbrit, Umma and Winetown.”,

and

(c) in Schedule 25B by inserting the following after the matter set out opposite reference number 36:

“

36A.	Section 372AX (accelerated capital allowances in relation to the construction or refurbishment of certain registered holiday camps).	An amount equal to— (a) the aggregate amount of allowances (including balancing allowances) made to the individual for the tax year under Chapter 1 of Part 9 as that Chapter is applied by section 372AX, including any such allowances or part of any such allowances made to the individual for a previous tax year and carried forward from that previous year in accordance with Part 9, or (b) where full effect has not been given in respect of that aggregate for that tax year, the part of that aggregate to which full effect has been given for that tax year in accordance with section 278 and section 304 or 305, as the case may be, or any of those sections as applied or modified by any other provision of the Tax Acts.
36B.	Section 372AY (capital allowances in relation to the construction or refurbishment of certain tourism infrastructure facilities).	An amount equal to— (a) the aggregate amount of allowances (including balancing allowances) made to the individual for the tax year under Chapter 1 of Part 9 as that Chapter is applied by section 372AY, including any such allowances or part of any such allowances made to the individual for a previous tax year and carried forward from that previous year in accordance with Part 9, or (b) where full effect has not been given in respect of that aggregate for that tax year, the part of that aggregate to which full effect has been given for that tax year in accordance with section 278 and section 304 or 305, as the case may be, or any of those sections as applied or modified by any other provision of the Tax Acts.

”.

(2) This section comes into operation on such day or days as the Minister for Finance may by order appoint and different days may be appointed for different purposes or different provisions.

30. Amendment of section 1008 (separate assessment of partners) of Principal Act.

30.— (1) Section 1008 of the Principal Act is amended—

(a) in subsection (2)(a)—

(i) by renumbering the existing text as subparagraph (i), and

(ii) by inserting the following subparagraph after subparagraph (i):

“(ii) Where for any year or period within the relevant period the aggregate of the respective amounts (in this subparagraph referred to as the ‘aggregate’) of the profits or gains which under subparagraph (i) are taken as arising to each partner in the partnership is less than the full amount of the profits or gains of the partnership trade for that year or period, then the amount of the difference (in this subparagraph referred to as the ‘balance’) between that full amount and the aggregate shall for the purposes of subsection (1) be apportioned in full between the partners—

(I) in the ratio which is expressed between the partners in relation to the apportionment of the balance, or

(II) where there is no such ratio expressed—

(A) in the same ratio as the ratio which applies between the respective amounts of the profits or gains which, under subparagraph (i), were taken as arising to each partner, or

(B) where no amount of profits or gains was, under subparagraph (i), taken as arising to any individual partner, in equal shares.”,

and

(b) by deleting subsection (4).

(2) Subsection (1) of this section applies as respects the full amount of the profits or gains of a partnership trade (as provided for in subsection (3)(a) of section 1008 of the Principal Act for the purposes of subsection (2) of that section) for any year or period ending on or after 1 January 2007.

31. Amendment of Chapter 2 (payments to subcontractors in certain industries) of Part 18 of Principal Act.

31.— (1) Chapter 2 of Part 18 of the Principal Act is amended—

(a) in section 530(1) by inserting the following after paragraph (c) of the definition of “construction operations”:

“(ca) the installation in or on any building or structure of systems of telecommunications,”,

and

(b) in section 531—

(i) in subsection (1)—

(I) in paragraph (b)(i) by inserting “the development of land (within the meaning of section 639(1)) or” after “the erection of buildings or”, and

(II) in paragraph (f) by inserting “or any board or body established by or under royal charter and funded wholly or mainly out of moneys provided by the Oireachtas” after “statute”,

(ii) in subsection (2), by inserting “or develops land” after “buildings”,

(iii) in subsection (6)—

(I) in paragraph (b)(ii) by deleting “and” and in paragraph (b)(iii) by substituting “declarations, and” for “declarations;”, and

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

“(iv) the delivery by principals of any or all such declarations to the Revenue Commissioners;”,

and

(iv) in subsection (14)—

(I) in paragraph (c)(iv)(II) by deleting “or” and in paragraph (c)(iv)(III) by substituting “declarations, or” for “declarations,”, and

(II) by inserting the following after paragraph (c)(iv)(III):

“(IV) to deliver declarations to the Revenue Commissioners,”.

(2) (a) Subject to paragraph (b), subsection (1) has effect as on and from the date of passing of this Act.

(b) Paragraphs (a), (b)(i) and (b)(ii) of subsection (1) have effect as respects relevant contracts entered into on or after 1 May 2007.

32. Amendment of Part 36A (special savings incentive accounts) of Principal Act.

32.— The Principal Act is amended in Part 36A by inserting the following section after section 848Q:

“Other returns.

848QA.— A qualifying savings manager, who is or was registered in accordance with section 848R, shall when so required by the Revenue Commissioners, make a return to them in an electronic format specified by them, which sets out, in relation to all of the special savings incentive accounts managed by the qualifying savings manager, or such category of those accounts as may be specified by the Revenue Commissioners, such details in relation to each account as the Revenue Commissioners may specify.”.

33. Amendment of Part 36B (pensions: incentive tax credits) of Principal Act.

33.— The Principal Act is amended in Part 36B by inserting the following after section 848AB:

“Withdrawal of tax credits.

848ABA.— (1) In this section—

‘ requested amount ’ has the meaning assigned to it in subsection (2);

‘ retained amount ’, in relation to a requested amount and subject to subsection (4), means the amount determined by the formula—

R x DCD

S + C

where—

R is the requested amount,

C is the aggregate of the tax credit and the additional tax credit, in relation to the pension subscription made by the individual, and

S is the amount of the pension subscription;

‘ vesting day ’, in relation to an individual’s pension product, means the day on which an administrator, in accordance with section 848AA, treats tax credits as an additional voluntary contribution, a PRSA contribution, or as the case may be, a premium under an annuity contract, made by the individual.

(2) Where the vesting day in relation to an individual’s pension product is on or after 29 September 2006, and, within a period of 1 year commencing on the vesting day, the individual requires the administrator to pay an amount (in this section referred to as a ‘requested amount’) to him or her—

(a) where payment is to be made on or after 10 April 2007, the administrator shall deduct from the requested amount, the retained amount in relation to the requested amount, and

(b) where payment is made before 10 April 2007, the individual shall be assessed to income tax for the year of assessment 2007 in such an amount as would ensure that the individual is liable to pay to the Revenue Commissioners an amount equal to the retained amount, in relation to the requested amount.

(3) Where in accordance with subsection (2)(a) an administrator deducts a retained amount, the administrator is liable to pay that amount to the Revenue Commissioners in accordance with arrangements determined by them.

(4) The retained amount, in relation to any part of a requested amount or the aggregate of requested amounts that exceeds the aggregate of the tax credit, the additional tax credit and the pension subscription, shall be a nil amount.

(5) An administrator shall, when requested to do so by the Revenue Commissioners, furnish to them in respect of each individual who required the administrator to pay a requested amount—

(a) the name of the individual,

(b) the address of the individual,

(c) the PPS Number of the individual,

(d) the amount of tax credit in relation to the pension subscription made by the individual, that was claimed and paid,

(e) the amount of additional tax credit that was claimed and paid,

(f) the requested amount,

(g) the amount deducted by the administrator from the requested amount,

(h) the date on which payment was made to the individual, and

(i) such other information as the Revenue Commissioners may require.”.

34. Certain interest payments by deposit takers.

34.— (1) The Principal Act is amended—

(a) in section 256(1)—

(i) in the definition of “relevant deposit”—

(I) in paragraph (g)(ii) by deleting “or” and in paragraph (h)(ii) by substituting “charity (CHY) number,” for “charity (CHY) number;”, and

(II) by inserting the following paragraphs after paragraph (h):

“(i) which is a deposit referred to in subsection (1A), or

(j) which is a deposit referred to in subsection (1B);”,

(ii) in the definition of “relevant deposit taker” by inserting the following paragraph after paragraph (ca):

“(cb) a specified intermediary in relation only to a specified deposit,”,

(iii) in the definition of “special term share account” by substituting “section 267A;” for “section 267A.”, and

(iv) by inserting the following after the definition of “special term share account”:

“ ‘ specified deposit ’ means a deposit of a class designated by the Minister for Finance for the purposes of this definition;

‘ specified intermediary ’ means a person appointed by the National Treasury Management Agency for the purposes only of taking specified deposits.”,

(b) by inserting the following after section 256(1):

“(1A) A deposit shall be a deposit to which this subsection refers as respects any year of assessment if—

(a) (i) at any time in that year of assessment the individual beneficially entitled to the interest or the individual’s spouse has attained the age of 65 years, and

(ii) the total income of the individual for that year of assessment does not exceed the specified amount (within the meaning of section 188(2)) applicable to that individual,

and

(b) a declaration of the kind mentioned in section 263A has been made to the relevant deposit taker.

(1B) A deposit shall be a deposit to which this subsection refers as respects any year of assessment if—

(a) (i) the individual beneficially entitled to any interest paid in respect of that deposit in that year of assessment, or the individual’s spouse, is a relevant person (within the meaning of section 267(1)(b)) and the individual would, in accordance with section 267(3), be entitled to repayment of the whole of any appropriate tax if it had been deducted from that interest, or

(ii) the person entitled to any interest paid in respect of that deposit in that year of assessment is a person who is exempt from income tax by virtue of section 189A(2) and that person would, in accordance with section 267(2), be entitled to repayment of the whole of any appropriate tax if it had been deducted from that interest,

(b) a declaration of the kind mentioned in section 263B has been made to the Revenue Commissioners,

(c) a notification of the kind mentioned in section 263C has been issued by the Revenue Commissioners to the relevant deposit taker that the deposit is a deposit to which this subsection refers and that notification is not cancelled in accordance with section 263C(2), and

(d) the individual beneficially entitled to the interest is not an individual referred to in subsection (1A), other than an individual who is a relevant person within the meaning of section 267(1)(b),

and where, by virtue of section 263C(2), a deposit is not a deposit to which this subsection refers as respects any year of assessment, then the Revenue Commissioners shall notify the deposit taker accordingly and where at any time the Revenue Commissioners have so notified the deposit taker, the deposit shall not be a deposit to which this subsection applies from that time.”,

(c) by inserting the following after section 261A:

“Taxation of specified interest.

261B.— (1) In this section ‘specified interest’ means interest arising to a person in respect of a deposit in relation to which a declaration has been made by the person under subsection (1A) or (1B) of section 256 and which is not included in relevant interest for the purposes of paragraph (c)(i)(II) of section 261.

(2) Notwithstanding any other provision of the Income Tax Acts, the amount of taxable income on which a person is charged to income tax at the standard rate for any year of assessment shall be increased by an amount equal to the amount of that person’s specified interest on which income tax for that year falls to be computed.

(3) Section 246(2) does not apply to a payment of specified interest if it would otherwise apply.”,

(d) by inserting after section 263 the following:

“Declarations to a relevant deposit taker relating to deposits of certain persons.

263A.— (1) The declaration referred to in section 256(1A) is a declaration in writing to a relevant deposit taker which—

(a) is made by an individual (in this section referred to as the ‘declarer’) to whom any interest on the deposit in respect of which the declaration is made is payable by the relevant deposit taker and is signed by the declarer,

(b) is made in such form as may be prescribed, authorised or approved by the Revenue Commissioners,

(c) declares that at the time when the declaration is made—

(i) the individual beneficially entitled to the interest in relation to the deposit or his or her spouse has attained the age of 65 years, and

(ii) the total income of the individual for the year of assessment in which the declaration is made will not exceed the specified amount (within the meaning of section 188(2)) applicable to that individual,

(d) contains as respects the individual, or as the case may be each of the individuals, mentioned in paragraph (c)—

(i) the name and address of the individual,

(ii) the date of birth of the individual who has attained the age of 65 years, and

(iii) the individual’s PPS Number (within the meaning of section 891B),

(e) contains an undertaking by the declarer that if the individual or, as the case may be, any of the individuals mentioned in paragraph (d) no longer satisfies the conditions set out in paragraph (a) of section 256(1A) the declarer will notify the relevant deposit taker accordingly, and

(f) contains such other information as the Revenue Commissioners may reasonably require for the purposes of this Chapter.

(2) Section 263(2) applies as respects declarations of the kind mentioned in this section as it applies as respects declarations of the kind mentioned in that section.

Declarations to the Revenue Commissioners relating to deposits of certain persons.

263B.— The declaration referred to in section 256(1B) is a declaration in writing to the Revenue Commissioners which—

(a) is made by the person (in this section referred to as the ‘declarer’) to whom any interest on the deposit in respect of which the declaration is made is payable by the relevant deposit taker and is signed by the declarer,

(b) is made in such form as may be prescribed, authorised or approved by the Revenue Commissioners,

(c) declares that at the time when the declaration is made—

(i) (I) the individual beneficially entitled to the interest in relation to the deposit or his or her spouse is permanently incapacitated by reason of mental or physical infirmity from maintaining himself or herself, and

(II) the individual beneficially entitled to any interest paid in respect of that deposit in any year of assessment or his or her spouse, is a relevant person (within the meaning of section 267) and the individual would, in accordance with section 267(3), be entitled to repayment of the whole of any appropriate tax if it had been deducted from that interest,

or

(ii) (I) the person entitled to the interest in relation to the deposit is exempt from income tax by virtue of section 189A(2), and

(II) the person entitled to any interest paid in respect of that deposit in any year of assessment is a person referred to in section 189A(2) and would, in accordance with section 267(2), be entitled to repayment of the whole of any appropriate tax if it had been deducted from that interest,

(d) contains as respects the person, or as the case may be, each of the persons mentioned in paragraph (c)—

(i) the name and address of the person,

(ii) the person’s PPS Number (within the meaning of section 891B) or where the person is not an individual, the person’s tax reference number (within the meaning of paragraphs (b) and (c) of the definition of ‘tax reference number’ in section 885),

(iii) the name and address of the deposit taker (including the name and address of the branch of the deposit taker, if any) who holds the deposit in respect of which the declaration is made, and

(iv) the account number or membership number, as the case may be, of the deposit in respect of which the declaration is made,

(e) contains an undertaking by the declarer that if the person or, as the case may be, any of the persons mentioned in paragraph (d) no longer satisfies the conditions set out in paragraph (a) of section 256(1B) the declarer will notify the Revenue Commissioners accordingly, and

(f) contains such other information as the Revenue Commissioners may reasonably require for the purposes of this Chapter.

Notifications by the Revenue Commissioners relating to deposits of certain persons.

263C.— (1) The notification referred to in section 256(1B) is a notification—

(a) in writing by the Revenue Commissioners to a relevant deposit taker confirming that the account identified in the notification is to be treated as not being a relevant deposit unless and until the notification is cancelled in accordance with subsection (2),

(b) which contains as respects the person beneficially entitled to, or the person (being one or more than one trustee) referred to in section 189A(2) entitled to, the interest in relation to the deposit mentioned in paragraph (a)—

(i) the name and address of the person,

(ii) the person’s PPS Number (within the meaning of section 891B) or, where the person is not an individual, the person’s tax reference number (within the meaning of paragraphs (b) and (c) of the definition of ‘tax reference number’ in section 885), and

(iii) the account number of the deposit,

and

(c) which contains such other information as the Revenue Commissioners may reasonably decide for the purposes of this Chapter.

(2) The Revenue Commissioners may at any time cancel the notification and give notice in writing to that effect to both the relevant deposit taker and the person or persons mentioned in subsection (1)(b). Where at any time the Revenue Commissioners have so notified the deposit taker, the deposit shall not be a deposit to which this section applies from that time.”,

(e) by inserting after section 265 the following:

“Deposits of certain persons.

265A.— Where a return is required to be made by a relevant deposit taker under section 891 in respect of interest on a deposit which is a deposit of a kind referred to in subsection (1A) or (1B) of section 256, then that return shall, in addition to the matters which shall be included on the return by virtue of section 891, include—

(a) the PPS Number (within the meaning of section 891B) of the person, or

(b) where the person is not an individual, the person’s tax reference number (within the meaning of paragraphs (b) and (c) of section 885).”,

(f) in section 267(3) by substituting “section 189A(4)” for “section 189A(3)”,

(g) in section 891(1A) by substituting the following for paragraph (b):

“(b) This section shall not apply in relation to any interest paid or credited by a credit union in respect of money received or retained by it, other than interest paid or credited by it in respect of a deposit to which subsection (1A) or (1B) of section 256 refers.”,

and

(h) in section 904A(3)(b)(ii)(I) by substituting “section 246A(3)(b)(ii)(III), 263 or 263A,” for “section 246A(3)(b)(ii)(III) or 263,”.

(2) This section applies on and from the date of the passing of this Act.

35. Relief from double taxation.

35.— (1) The Principal Act is amended—

(a) in section 826 by substituting the following for subsection (1):

“(1) Where—

(a) the Government by order declare that arrangements specified in the order have been made with the government of any territory outside the State in relation to—

(i) affording relief from double taxation in respect of—

(I) income tax,

(II) corporation tax in respect of income and chargeable gains (or, in the case of arrangements made before the enactment of the Corporation Tax Act 1976, corporation profits tax),

(III) capital gains tax,

(IV) any taxes of a similar character,

imposed by the laws of the State or by the laws of that territory, and

(ii) in the case of taxes of any kind or description imposed by the laws of the State or the laws of that territory—

(I) exchanging information for the purposes of the prevention and detection of tax evasion, or

(II) granting relief from taxation under the laws of that territory to persons who are resident in the State for the purposes of tax,

and that it is expedient that those arrangements should have the force of law, and

(b) the order so made is referred to in Part 1 of Schedule 24A,

then, subject to this section and to the extent provided for in this section, the arrangements shall, notwithstanding any enactment, have the force of law as if each such order were an Act of the Oireachtas on and from the date of—

(A) the insertion of Schedule 24A into this Act, or

(B) the insertion of a reference to the order into Part 1 of Schedule 24A,

whichever is the later.

(1A) Where—

(a) the Government by order declare that arrangements specified in the order have been made with the government of any territory outside the State in relation to affording relief from double taxation of air transport undertakings and their employees in respect of all taxes which are or may become chargeable on profits, income and capital gains imposed by the laws of the State or the laws of that territory, and that it is expedient that those arrangements should have the force of law, and

(b) the order so made is referred to in Part 2 of Schedule 24A,

then, subject to this section and to the extent provided for in this section, the arrangements shall, notwithstanding any enactment, have the force of law as if each such order were an Act of the Oireachtas on and from the date of—

(i) the insertion of Schedule 24A into this Act, or

(ii) the insertion of a reference to the order into Part 2 of Schedule 24A,

whichever is the later.

(1B) Where—

(a) the Government by order declare that arrangements specified in the order have been made with the government of any territory outside the State in relation to—

(i) exchanging information for the purposes of the prevention and detection of tax evasion in the case of taxes of any kind or description imposed by the law of the State or the laws of that territory,

(ii) such other matters relating to affording relief from double taxation as the Government consider appropriate,

and that it is expedient that those arrangements should have the force of law, and

(b) the order so made is specified in Part 3 of Schedule 24A,

then, subject to this section, the arrangements shall, notwithstanding any enactment, have the force of law as if each such order were an Act of the Oireachtas on and from the date of the insertion of a reference to the order into Part 3 of Schedule 24A.”,

and

(b) by inserting the following after Schedule 24:

“SCHEDULE 24A

PART 1

PART 2

Double Taxation Relief (Air Transport Undertakings and their Employees) (Union of Soviet Socialist Republics) Order 1987 (S.I. No. 349 of 1987).

PART 3

(2) Schedule 2 applies for the purposes of supplementing subsection (1).

(3) This section has effect as on and from the passing of this Act.

36. Unilateral relief from double taxation.

36.— (1) The Principal Act is amended—

(a) by inserting the following section after section 826:

“Unilateral relief from double taxation.

826A.— Where relief from double taxation is not afforded by virtue of section 826, relief (known as ‘unilateral relief’) from tax shall be given in respect of tax paid under the laws of a territory other than the State in accordance with Schedule 24.”,

and

(b) in Schedule 24—

(i) by inserting the following after paragraph 9D:

“Unilateral Relief (branch profits)

9DA.— (1) To the extent appearing from the following provisions of this paragraph, relief (in this paragraph referred to as ‘unilateral relief’) from corporation tax in respect of profits of a company from a trade carried on by the company through a branch or agency in a territory other than the State shall be given in respect of tax payable under the law of any territory other than the State by allowing that tax as a credit against corporation tax, notwithstanding that there are not for the time being in force any arrangements providing for such relief.

(2) Unilateral relief shall be such relief as would fall to be given under this Schedule if arrangements with the government of the territory in question containing the provisions in subparagraphs (3) to (5) were in force, and a reference in this Schedule to credit under arrangements shall be construed as including a reference to unilateral relief.

(3) Subject to Part 1 and to subparagraph (5), credit for tax paid under the law of a territory other than the State and computed by reference to income of a company, being a company falling within subparagraph (4), from a trade carried on by it through a branch or agency in that territory shall be allowed against corporation tax in the State computed by reference to that income.

(4) (a) A company falls within this subparagraph if—

(i) it is resident in the State, or

(ii) it is, by virtue of the law of a relevant Member State other than the State, resident for the purposes of tax in such a Member State and the income referred to in subparagraph (3) forms part of the income of a branch or agency of the company in the State.

(b) For the purposes of subparagraph (a)(ii), ‘tax’, in relation to a relevant Member State other than the State, means any tax imposed in the Member State which corresponds to corporation tax in the State.

(5) Credit shall not be allowed by virtue of subparagraph (3)—

(a) for tax paid under the law of a territory where there are arrangements with the government of the territory except to the extent that credit may not be given for that tax under those arrangements, or

(b) for any tax which is relevant foreign tax within the meaning of section 449 or paragraph 9D.

(6) Where—

(a) unilateral relief may be given in respect of any profits, and

(b) it appears that the assessment to corporation tax made in respect of the profits is not made in respect of the full amount thereof, or is incorrect having regard to the credit, if any, which falls to be given by way of unilateral relief,

then any such assessment may be made or amended as is necessary to ensure that the total amount of the profits is assessed, and the proper credit, if any, is given in respect thereof.

(7) In this Schedule in its application to unilateral relief, references to tax payable or paid under the law of a territory outside the State include only references to taxes which are charged on income or capital gains and which correspond to corporation tax and capital gains tax.”,

and

(ii) by inserting the following after paragraph 9F:

“9FA.— (1) In this paragraph—

‘ aggregate amount of corporation tax payable by a company for an accounting period in respect of foreign branch income of the company for the accounting period ’ means so much of the corporation tax which, apart from this paragraph, would be payable by the company for that accounting period as would not have been payable had the foreign branch income been disregarded for the purposes of tax;

‘ foreign branch ’, in relation to a company, means a branch or agency of the company in a territory other than the State through which the company carries on a trade in that territory;

‘ foreign branch income ’, in relation to a company, means so much of the income of the company as is attributable to a foreign branch;

‘ foreign tax ’, in relation to foreign branch income of a company, means tax which—

(a) is paid under the laws of the territory in which the foreign branch is situated on income attributable to that branch, and

(b) corresponds to corporation tax.

(2) Where, as respects any foreign branch income of a company for an accounting period, any part of the foreign tax cannot, apart from this paragraph, be allowed as a credit against corporation tax and, accordingly, the amount of the income is treated under paragraph 7(3)(c) as reduced by that part of the foreign tax, then an amount equal to the aggregate of—

(a) where income that is chargeable to tax at the rate specified in section 21(1) for the accounting period is treated under paragraph 7(3)(c) as reduced, an amount determined by the formula—

100 — R x D

100

where—

R is the rate per cent specified in section 21(1), and

D is the amount by which that income is so treated as reduced,

and

(b) where income that is chargeable to tax at the rate specified in section 21A(3) for the accounting period is treated under paragraph 7(3)(c) as reduced, an amount determined by the formula—

100 — R x D

100

where—

R is the rate per cent specified in section 21A(3), and

D is the amount by which that income is so treated as reduced,

shall be treated for the purposes of subparagraph (3) as unrelieved foreign tax of that accounting period.

(3) The aggregate amount of corporation tax payable by a company for an accounting period in respect of foreign branch income of the company for the accounting period shall be reduced by the unrelieved foreign tax of that accounting period.

Unilateral Relief (capital gains)

9FB.— (1) To the extent appearing from the following provisions of this paragraph, relief (in this paragraph referred to as ‘unilateral relief’) from capital gains tax (including corporation tax in respect of chargeable gains) in respect of chargeable gains accruing to a person on the disposal of an asset (in this paragraph referred to as a ‘specified asset’) which is located in a territory other than the State shall be given in respect of tax payable under the law of any specified territory by allowing that tax as a credit against capital gains tax (or as the case may be corporation tax in respect of chargeable gains), notwithstanding that there are not for the time being in force any arrangements providing for such relief.

(2) Unilateral relief shall be such relief as would fall to be given under this Schedule if arrangements with the government of the specified territory in question contained the provisions in subparagraphs (3) and (4), and a reference in this Schedule to credit under arrangements shall be construed as including a reference to unilateral relief.

(3) Subject to Part 1 and to subparagraph (5), credit for tax paid under the law of a specified territory and computed by reference to a capital gain of a person from the disposal by the person of a specified asset, shall be allowed against capital gains tax (or as the case may be corporation tax in respect of chargeable gains) in the State computed by reference to that capital gain.

(4) Credit shall not be allowed by virtue of subparagraph (3) for tax paid under the law of a specified territory to the extent that credit may be given for that tax under—

(a) arrangements with the government of the territory, or

(b) any other provision of this Schedule.

(5) Where—

(a) unilateral relief may be given in respect of any chargeable gain, and

(b) it appears that any assessment made in respect of the chargeable gain is not made in respect of the full amount thereof, or is incorrect having regard to the credit, if any, which falls to be given by way of unilateral relief,

then any such assessment may be made or amended as is necessary to ensure that the total amount of the chargeable gain is assessed, and the proper credit, if any, is given in respect thereof.

(6) In this Schedule in its application to unilateral relief, references to tax payable or paid under the law of a territory outside the State include only references to taxes which are charged on capital gains and which correspond to income tax, corporation tax or capital gains tax.

(7) In this paragraph ‘ specified territory ’ means any of the following territories with the government of which arrangements have been made, that is to say, the Kingdom of Belgium, Cyprus, the Republic of France, the Federal Republic of Germany, the Italian Republic, Japan, the Grand Duchy of Luxembourg, the Kingdom of the Netherlands, Pakistan or Zambia.”.

(2) This section applies—

(a) in the case of relief from corporation tax, as respects an accounting period ending on or after 1 January 2007, and

(b) in any other case, for the year of assessment 2007 and subsequent years.

37. Amendment of section 81 (general rule as to deductions) of Principal Act.

37.— (1) Section 81 of the Principal Act is amended in subsection (2)(n)—

(a) in subparagraph (i) by deleting “or” and in subparagraph (ii) by substituting “length, or” for “length.”, and

(b) by inserting the following after subparagraph (ii):

“(iii) of other—

(I) expenditure incurred, or

(II) payment made to the connected company,

by the company in connection with the right to receive such shares which is incurred or, as the case may be, made for bona fide commercial purposes and does not form part of any scheme or arrangement of which the main purpose or one of the main purposes is the avoidance of liability to income tax, corporation tax or capital gains tax.”.

(2) This section applies as respects accounting periods ending on or after 1 February 2007.

38. Dividend withholding tax.

38.— (1) The Principal Act is amended—

(a) In section 172A(1)(a)—

(i) by inserting the following after the definition of “dividend withholding tax”:

“ ‘ electronic dividend voucher ’ means a statement in electronic format that satisfies the requirements of section 172I(1A)(a);

‘ electronic number ’ means a unique number on an electronic dividend voucher;”,

(ii) by inserting the following after the definition of “intermediary”:

“ ‘ ISI Number ’, in relation to a security issued by a company, means that security’s unique International Securities Identification Number (ISIN) issued by the Irish Stock Exchange Limited or by an equivalent authority in a relevant territory;”,

and

(iii) by inserting the following after the definition of “qualifying savings manager”:

“ ‘ recipient ID code ’, in relation to the recipient of a dividend, means the unique code on an electronic dividend voucher that identifies that recipient;”,

(b) in section 172D(3)(b)(iii) by substituting “is substantially and regularly traded on a stock exchange in the State, on” for “is substantially and regularly traded on”,

(c) in section 172I by inserting the following after subsection (1):

“(1A) A statement delivered by means of electronic communications to an intermediary shall satisfy the requirements of subsection (1) where—

(a) the statement contains—

(i) an ISI Number,

(ii) a recipient ID code,

(iii) the information referred to in paragraphs (c) to (e) of subsection (1), and

(iv) an electronic number,

(b) the intermediary has consented to the statement being delivered by means of electronic communications and has not withdrawn that consent, and

(c) the Revenue Commissioners have agreed to accept the statement for the purposes of this Chapter.”,

(d) in section 172J(3) by substituting “Where, in a year of assessment or in an accounting period of a company (as appropriate),” for “Where”, and

(e) in paragraph 9(f)(iii) of Schedule 2A, by substituting “is substantially and regularly traded on a stock exchange in the State, on” for “is substantially and regularly traded on”.

(2) (a) Paragraphs (a), (b), (c) and (e) of subsection (1) apply as respects any relevant distribution (within the meaning of section 172A of the Principal Act) made on or after 1 February 2007.

(b) Paragraph (d) of subsection (1 applies as respects any chargeable period (within the meaning of section 321(2) of the Principal Act) ending on or after 1 February 2007.

39. Amendment of Part 27 (unit trusts and offshore funds) of Principal Act.

39.— (1) Part 27 of the Principal Act is amended—

(a) in section 747B—

(i) in subsection (2), by substituting “Subject to subsection (2A), this Chapter” for “This Chapter”, and

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

“(2A) This Chapter does not apply to an offshore fund other than an offshore fund which—

(a) (i) is an undertaking for collective investment formed under the law of an offshore state,

(ii) is similar in all material respects to an investment limited partnership (within the meaning of the Investment Limited Partnership Act 1994), and

(iii) holds a certificate authorising it to act as such an undertaking, being a certificate issued by the authorities of that state under laws providing for the proper and orderly regulation of such undertakings,

(b) is authorised by or under any measures duly taken by a Member State for the purposes of giving effect to—

(i) Council Directive 85/611/EEC on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities (UCITS), or

(ii) any amendment to that Directive,

(c) (i) is a company formed under the law of an offshore state,

(ii) is similar in all material respects to an authorised investment company (within the meaning of Part XIII of the Companies Act 1990),

(iii) holds an authorisation issued by the authorities of that state under laws providing for the proper and orderly regulation of such companies and that authorisation has not ceased to have effect, and

(iv) is an investment company—

(I) which raises capital by promoting the sale of its shares to the public, or

(II) each of the shareholders of which is an investor which, if the company were an authorised investment company within the meaning of Part XIII of the Companies Act 1990 would be a collective investor within the meaning of section 739B,

or

(d) (i) is a unit trust scheme, the trustees of which are not resident in the State,

(ii) is similar in all material respects to an authorised unit trust scheme (within the meaning of the Unit Trusts Act 1990),

(iii) holds an authorisation issued by the authorities of that offshore state under laws providing for the proper and orderly regulation of such schemes and that authorisation has not ceased to have effect, and

(iv) provides facilities for the participation by the public, as beneficiaries under the trust, in profits or income arising from the acquisition, holding, management or disposal of securities or any other property whatsoever.”,

and

(b) by inserting the following after section 747A:

“Treatment of certain offshore funds.

747AA.— Without prejudice to ‘offshore fund’ having the meaning assigned to it by section 743 for the purposes of Chapter 4, where that Chapter does not apply to an offshore fund by virtue of subsection (2A) of section 747B, then Chapter 2 and section 747A shall not apply in respect of that offshore fund.”.

(2) (a) Subject to paragraph (b), subsection (1) applies as respects income arising or gains accruing on or after 20 February 2007.

(b) Where on 20 February 2007 a person had a material interest in an offshore fund, which was an offshore fund to which Chapter 4 of Part 27 of the Principal Act applied before the passing of this Act, and that fund—

(i) is not an offshore fund to which Chapter 4 of Part 27 of the Principal Act applies after the passing of this Act, and

(ii) would not be a personal portfolio investment undertaking (within the meaning of section 739BA of the Principal Act) if it were deemed to be a fund to which that Chapter applied after the passing of this Act,

then subsection (1) does not apply to income arising and gains accruing in respect of the material interest which the person had on 20 February 2007.

40. Investment undertakings and certain offshore funds: taxation of personal portfolio investment undertakings.

40.— (1) The Principal Act is amended—

(a) by inserting the following after section 739B:

“Personal portfolio investment undertaking.

739BA.— (1) In this section—

‘ investor ’ means—

(a) in relation to an investment undertaking, a unit holder in the investment undertaking who is an individual, and

(b) in relation to an offshore fund to which Chapter 4 applies, an individual who has a material interest in the offshore fund;

‘ land ’ has the same meaning as in section 730BA;

‘ material interest ’ shall be construed in accordance with section 743;

‘ offshore fund ’ has the meaning assigned to it by section 743;

‘ public ’ has the same meaning as in section 730BA.

(2) In this Chapter and in Chapter 4 of this Part ‘ personal portfolio investment undertaking ’ means—

(a) in relation to an investor in an investment undertaking, an investment undertaking, and

(b) in relation to an investor in an offshore fund to which Chapter 4 applies, such an offshore fund,