Finance Act 2007

Type Act

Publication 2007-04-02

State In force

Source Irish Statute Book

articles 130

under the terms of which some or all of the property of the undertaking or, as the case may be, the offshore fund, may be, or was, selected by, or the selection of some or all of the property may be, or was, influenced by—

(i) the investor,

(ii) a person acting on behalf of the investor,

(iii) a person connected with the investor,

(iv) a person connected with a person acting on behalf of the investor,

(v) the investor and a person connected with the investor, or

(vi) a person acting on behalf of both the investor and a person connected with the investor,

where ‘ person connected ’ in this subsection means a person connected within the meaning of section 10.

(3) For the purposes of subsection (2) and without prejudice to the application of that subsection, the terms of an investment undertaking or an offshore fund, as the case may be, shall be treated as permitting the selection referred to in that subsection where—

(a) the terms of such undertaking or offshore fund, or any other agreement between any person referred to in that subsection and such undertaking or offshore fund concerned—

(i) allow the exercise of an option by any person referred to in that subsection to make the selection referred to in that subsection,

(ii) give such undertaking or offshore fund discretion to offer any person referred to in that subsection the right to make the selection referred to in that subsection, or

(iii) allow any of the persons referred to in that subsection the right to request, subject to the agreement of such undertaking or offshore fund, a change in those terms such that the selection referred to in that subsection may be made by any of those persons,

(b) the investor is unable under those terms to select any of the property but any of the persons referred to in that subsection has or had the option of requiring such undertaking or offshore fund to appoint an investment advisor (no matter how such a person is described) in relation to the selection of the property.

(4) An investment undertaking or an offshore fund, as the case may be, is not a personal portfolio investment undertaking if—

(a) the only property which may be or has been selected satisfies the condition specified in subsection (5), and

(b) the terms under which such undertaking or offshore fund is offered meet the requirements of subsection (6).

(5) The condition specified in this subsection is that at the time when the property is or was available to be selected the opportunity to select—

(a) in the case of land, that property, and

(b) in any other case, property of the same description as the first-mentioned property,

is or was available to the public on terms which provide or provided that the opportunity to select the property is or was available to any person falling within the terms of the opportunity and that opportunity is or was clearly identified to the public, in marketing or other promotional literature published at that time by the investment undertaking or offshore fund concerned, as available generally to any person falling within the terms of the opportunity.

(6) The requirements of this subsection are that—

(a) the investment undertaking or offshore fund concerned does not subject any person to any treatment in connection with the opportunity which is different or more burdensome than any treatment to which any other person is or may be subject, and

(b) where the terms of the opportunity referred to in subsection (5) include terms—

(i) which set out the capital requirement of the opportunity and this requirement is identified to the public in the marketing or other promotional material published by the investment undertaking or offshore fund at the time the property is available to be selected, and

(ii) indicating that 50 per cent or more by value of the property referred to in that subsection is or is to be land,

then the amount any one person may invest in the investment undertaking or offshore fund shall not represent more than 1 per cent of the capital requirement (exclusive of any borrowings) of the opportunity as so identified.”,

(b) in section 739E, by substituting the following for paragraphs (a) and (b) of subsection (1):

“(a) subject to paragraph (ba), where the amount of the gain is provided by section 739D(2)(a), at the standard rate for the year of assessment in which the gain arises,

(b) subject to paragraph (ba), where the chargeable event happens on or after 1 January 2001 and the amount of the gain is provided by paragraph (b), (c), (d), (dd) or (ddd) of section 739D(2), at a rate determined by the formula—

(S + 3) per cent,

where S is the standard rate per cent (within the meaning of section 4),

(ba) where in the case of a personal portfolio investment undertaking, the chargeable event happens on or after 20 February 2007, at a rate determined by the formula—

(S + 23) per cent,

where S is the standard rate per cent (within the meaning of section 4), and”,

“(a) where the person is not a company, and—

(i) the income represented by the payment is correctly included in a return made by the person, then notwithstanding section 15, the rate of income tax to be charged on the income shall be—

(I) where the payment is a relevant payment—

(A) in the case of an offshore fund which is a personal portfolio investment undertaking, at the rate determined by the formula—

(S + 23) per cent,

where S is the standard rate per cent for the year of assessment in which the payment is made, and

(B) in any other case, the standard rate per cent,

and

(II) where the payment is not a relevant payment and is not made in consideration of the disposal of an interest in the offshore fund—

(A) in the case of an offshore fund which is a personal portfolio investment undertaking, at the rate determined by the formula—

(S + 23) per cent,

where S is the standard rate per cent for the year of assessment in which the payment is made, and

(B) in any other case, at the rate determined by the formula—

(S + 3) per cent,

where S is the standard rate per cent,

and

(ii) where the income represented by the payment is not correctly included in a return made by the person, the income shall be charged to income tax—

(I) in the case of an offshore fund which is a personal portfolio investment undertaking, at the rate determined by the formula—

(H + 20) per cent,

where H is the rate per cent determined in relation to the person by section 15 for the year of assessment in which the payment is made, and

(II) in any other case, at a rate determined by section 15,”,

and

(d) in section 747E, by substituting the following for subsection (1):

“(1) Where on or after 1 January 2001 a person who has a material interest in an offshore fund, disposes of an interest in the offshore fund and the disposal gives rise to a gain computed in accordance with subsection (2) then, notwithstanding sections 745 and 747, where the gain is not taken into account in computing the profits or gains of a trade carried on by a company, the amount of that gain shall be treated as an amount of income chargeable to tax under Case IV of Schedule D, and—

(a) where the person is a company, the rate of corporation tax to be charged on that income shall, notwithstanding section 21A(3), be the rate of income tax chargeable on income referred to in subparagraph (ii) of paragraph (b), and

(b) where the person is not a company, and the person has correctly included details of the disposal in a return made by the person, the rate of income tax to be charged on that income shall, notwithstanding section 15, be the rate determined—

(i) in the case of an offshore fund which is a personal portfolio investment undertaking, by the formula—

(S + 23) per cent,

where S is the standard rate per cent for the year of assessment in which the payment is made, and

(ii) in any other case, by the formula—

(S + 3) per cent,

where S is the standard rate per cent.”.

(2) Subsection (1) applies as respects—

(a) the occurrence of a chargeable event in relation to an investment undertaking (within the meaning of Chapter 1A of Part 27 of the Principal Act),

(b) the receipt by a person of a payment in respect of a material interest in an offshore fund (within the meaning of Chapter 4 of Part 27 of the Principal Act), and

on or after 20 February 2007.

41. Amendment of section 739D (gain arising on a chargeable event) of Principal Act.

41.— Section 739D of the Principal Act is amended in subsection (6)—

(a) in paragraph (j) by deleting “or”,

(b) in paragraph (k) by deleting “or 110(2)”, and

“(l) is the National Pensions Reserve Fund Commission and has made a declaration to that effect to the investment undertaking, or

(m) is a company that—

(i) is or will be within the charge to corporation tax in accordance with section 110(2), in respect of payments made to it by the investment undertaking, and

(ii) has made a declaration to that effect and has provided the investment undertaking with the company’s tax reference number (within the meaning of section 885),”.

42. Amendment of section 730H (interpretation and application) of Principal Act.

42.— (1) Section 730H of the Principal Act is amended in subsection (1)—

(a) in the definition of “relevant event” by substituting “period;” for “period, where”, and

(b) by substituting the following for the definition of “relevant period”:

“ ‘ relevant period ’ in relation to a foreign life policy means a period of 8 years beginning with the inception of the policy and each subsequent period of 8 years beginning immediately after the preceding relevant period;”.

(2) This section applies as respects any relevant event (within the meaning of section 730H(1) of the Principal Act) occurring on or after the passing of this Act in respect of a foreign life policy (within the meaning of section 730H(1) of the Principal Act) taken out on or after 1 January 2001.

43. Amendment of Chapter 5 (policyholders — new basis) of Part 26 of Principal Act.

43.— (1) Chapter 5 of Part 26 of the Principal Act is amended—

(a) in section 730C(1)(a) by substituting the following for subparagraph (iv):

“(iv) the ending of a relevant period, where such ending is not otherwise a chargeable event within the meaning of this section, and for the purposes of this subparagraph ‘relevant period’, in relation to a life policy, means a period of 8 years beginning with the inception of the policy and each subsequent period of 8 years beginning immediately after the preceding relevant period,”,

(b) by substituting the following for section 730D(1A):

“730D.— (1A) (a) Where—

(i) a chargeable event occurs in relation to a life policy, and

(ii) a chargeable event within the meaning of section 730C(1)(a)(iv) occurred previously in relation to that policy,

then the gain arising on the chargeable event referred to in subparagraph (i) shall be determined as if section 730C(1)(a)(iv) had not been enacted.

(b) Where paragraph (a) applies and the chargeable event referred to in subparagraph (i) of that paragraph is not the surrender or assignment of part of the rights conferred by the life policy, any first tax (within the meaning of section 730F(1A)) shall, for the purposes of subsection (3), be added to the value of the rights or other benefits conferred by that policy immediately before the chargeable event.

(c) Where paragraph (a) applies and the chargeable event referred to in subparagraph (i) of that paragraph is the surrender or assignment of part of the rights conferred by the life policy, any first tax (within the meaning of section 730F(1A)) shall, for the purposes of subsection (3), be deducted from the amount of premiums taken into account in determining the gain on the happening of the chargeable event.”,

(c) in section 730D(3), in the construction of P, by substituting “of a chargeable event (not being a chargeable event within the meaning of section 730C(1)(a)(iv)),” for “of a chargeable event,”, and

(d) in section 730F(1A)—

(i) in the definition of “first tax” by substituting “within the meaning of section 730C(1)(a)(iv) in relation to the life policy and which has not been repaid;” for “referred to in subsection 730D(1A)(b) in relation to the life policy;”,

(ii) by substituting the following for the definition of “new gain”:

“ ‘ new gain ’, in relation to a life policy, means a gain referred to in section 730D(1A)(a) determined in accordance with section 730D in relation to the life policy;”,

(iii) in paragraph (b)(i) by substituting “section 730D(1A)(a)” for “subsection 730D(1A)”,

(iv) in paragraph (b)(ii) by deleting “, subject to subparagraph (iii)”, and

(v) by deleting subparagraph (iii) of paragraph (b).

(2) This section applies and has effect as respects any chargeable event (within the meaning of section 730C(1)(a)(iv) of the Principal Act) occurring on or after the passing of this Act.

44. Amendment of Chapter 1 (transfer of assets abroad) of Part 33 of Principal Act.

44.— (1) Chapter 1 of Part 33 of the Principal Act is amended—

(a) in section 806—

(i) in subsection (1), in the definition of “associated operation” by inserting “and for the purposes of this definition it is immaterial whether the operation is effected before, after, or at the same time as the transfer;” after “any such assets;”,

(ii) in subsection (2)—

(I) by deleting “and” at the end of paragraph (b) and by substituting “transferred,” for “transferred.” at the end of paragraph (c), and

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

“(d) the income that becomes payable to, or has become income of, a person resident or domiciled out of the State that is referred to in subsection (3) or (5) or in section 807A(1) includes any income which becomes payable to, or has become income of, the person by virtue or in consequence of—

(i) the transfer,

(ii) one or more associated operations, or

(iii) the transfer and one or more associated operations,

and

(e) the income which an individual has power to enjoy, as referred to in subsection (4), includes any income which that individual has power to enjoy by virtue or in consequence of—

(i) the transfer,

(ii) one or more associated operations, or

(iii) the transfer and one or more associated operations.”,

(iii) in subsection (8) by substituting “Subject to section 807B, subsections (4) and (5)” for “Subsections (4) and (5)”,

(iv) in subsection (9), by substituting “subsection (8) or (10) or section 807B or 807C” for “subsection (8)”, and

(v) by inserting the following after subsection (9):

“(10) (a) In this subsection—

‘ commercial transaction ’ does not include—

(i) a transaction on terms other than those that would have been made between independent persons dealing at arm’s length, or

(ii) a transaction that would not have been entered into between independent persons dealing at arm’s length;

‘ independent persons ’ means persons who are not connected with each other (within the meaning of section 10);

‘ relevant transactions ’ means—

(i) the transfer, and

(ii) any associated operations.

(b) Subject to section 807B, subsections (4) and (5) shall not apply by reference to the relevant transactions where the individual shows in writing or otherwise to the satisfaction of the Revenue Commissioners—

(i) that it would not be reasonable to draw the conclusion, from all the circumstances of the case, that the purpose of avoiding liability to taxation was the purpose, or one of the purposes, for which the relevant transactions or any of them were effected, or

(ii) in a case where the condition in subparagraph (i) is not met, that—

(I) all the relevant transactions were genuine commercial transactions, and

(II) it would not be reasonable to draw the conclusion, from all the circumstances of the case, that any one or more of those transactions was more than incidentally designed for the purpose of avoiding liability to taxation.

(i) designs or effects the relevant transactions or any of them, or

(ii) provides advice in relation to the relevant transactions or any of them,

are to be taken into account in determining the purposes for which those transactions or any of them were effected.

(d) A relevant transaction is a commercial transaction only if it is effected—

(i) in the course of a trade or business, or

(ii) with a view to setting up and commencing a trade or business,

and, in either cases, for the purposes of such trade or business.

(e) For the purposes of paragraph (d), the making and managing of investments, or the making or managing of investments, is not a trade or business except to the extent that—

(i) the person by whom it is done, and

(ii) the person for whom it is done,

are independent persons dealing at arm’s length.

(f) Any associated operation that would not (apart from this paragraph) fall to be taken into account for the purposes of this subsection shall be taken into account for those purposes if, were it to be so taken into account, the conditions in paragraph (b) would be failed by reference to—

(i) that associated operation, or

(ii) that associated operation taken together with the transfer or any one or more other associated operations.”,

(b) by inserting the following after section 807A:

“Certain transitional arrangements in relation to transfer of assets abroad.

807B.— (1) In this section—

‘ new transaction ’ means a relevant transaction effected on or after the relevant date;

‘ old transaction ’ means a relevant transaction effected before the relevant date;

‘ relevant date ’ means 1 February 2007;

‘ relevant transactions ’ has the meaning assigned to it by section 806(10).

(2) For the purposes of applying subsection (3) of this section and subsections (8) and (10) of section 806—

(a) if all the relevant transactions are old transactions, section 806(8) shall apply,

(b) if all the relevant transactions are new transactions, section 806(10) shall apply,

(c) if any one or more of the relevant transactions are old transactions and any one or more of the relevant transactions are new transactions, sections 806 and 807A shall apply subject to subsection (3).

(3) (a) Where—

(i) the conditions in section 806(8) are failed by reference to the old transactions or any of them, or

(ii) the conditions in section 806(10)(b) are failed by reference to the new transactions or any of them,

then, subject to paragraph (b), sections 806 and 807A apply as they would have applied apart from any exemption by virtue of this section or by virtue of section 806(8) or section 806(10).

(b) Where paragraph (a) applies by virtue only of subparagraph (ii) of that paragraph—

(i) for the purposes of subsection (4) or (5)(b) of section 806 any income arising before the relevant date shall not be brought into account as income of the person resident or domiciled out of the State,

(ii) for the purposes of section 807A—

(I) (A) where a benefit is received by an individual in a year of assessment ending after the relevant date, and

(B) relevant income (within the meaning of section 807A(3)) of years of assessment up to and including that year falls to be determined,

then years of assessment ending before the relevant date are to be brought into account as well as years of assessment ending after that date, and

(II) a benefit received by an individual in the year of assessment 2007 is to be left out of account to the extent that, on a time apportionment basis, it fell to be enjoyed in any part of the year that falls before the relevant date.

Supplementary provisions in relation to section 806 — apportionment in certain cases.

807C.— (1) In this section—

‘ appropriate exemption ’ means an exemption by virtue of subsection (8)(b) or (10)(b)(ii) of section 806;

‘ exempt year of assessment ’ means a year of assessment referred to in subsection (2)(b) in respect of which there was no earlier year of assessment where—

(a) the individual was liable to tax by virtue of section 806, or

(b) the individual would have been liable to tax by virtue of section 806 if there had been any deemed income of such individual under that section;

‘ relevant transactions ’ has the meaning assigned to it by section 806(10).

(2) This section applies where an individual is liable to income tax by virtue of section 806 for a year of assessment and—

(a) the individual is so liable by virtue of the conditions in section 806(10)(b)(ii) not being met,

(b) since the making of the transfer there have been one or more years of assessment where the circumstances were such that, so far as relating to such of the relevant transactions as were effected before the end of the year of assessment concerned, the individual—

(i) was not liable to tax by virtue of section 806 because an appropriate exemption applied, or

(ii) would not have been liable to tax by virtue of section 806 if there had been any deemed income of such individual under that section because an appropriate exemption would have applied,

and

(i) partly to relevant transactions by reference to which the appropriate exemption applied for the last exempt year of assessment, and

(ii) partly to associated operations not falling within subparagraph (i) (in this section referred to as ‘chargeable operations’).

(3) Where this section applies, the liability of the individual shall be reduced as if it fell to be determined by reference to so much of the income as appears to the Revenue Commissioners, or such officer as the Revenue Commissioners may appoint, to be justly and reasonably attributable to chargeable operations in all the circumstances of the case.

(4) The facts and matters that may be taken into account in determining for the purposes of subsection (3) whether income may be regarded as justly and reasonably attributable to chargeable operations include whether, and to what extent, the chargeable operations or any of them directly or indirectly affect—

(a) the character, description or amount of any income of any person,

(b) any person’s power to enjoy any income, or

(d) in section 808, in subsections (2) and (3)(b), by substituting “sections 806, 807, 807A, 807B, 807C and 809” for “sections 806, 807, 807A and 809” in each place where it occurs.

(2) This section has effect as respects relevant transactions (within the meaning of section 806(10)(a) of the Principal Act) on or after 1 February 2007.

45. Amendment of section 234 (certain income derived from patent royalties) of Principal Act.

45.— (1) Section 234 of the Principal Act is amended—

(a) in subsection (1)—

(i) by inserting the following before the definition of “ income from a qualifying patent ”:

“ ‘ EEA Agreement ’ means the Agreement on the European Economic Area signed at Oporto on 2 May 1992, as adjusted by the Protocol signed at Brussels on 17 March 1993;

‘ EEA state ’ means a state which is a Contracting Party to the EEA Agreement;”,

(ii) in the definition of “ qualifying patent ” by substituting “in an EEA state;” for “in the State;”,

(b) by inserting the following after subsection (3):

“(3A) (a) Notwithstanding subsection (2) but subject to paragraphs (b) to (d), so much of the aggregate of the amounts of any income from qualifying patents arising to a person in a relevant period which would, apart from this subsection, be disregarded under subsection (2) for the purposes of income tax or corporation tax as exceeds €5,000,000 shall not be so disregarded.

(b) Where—

(i) in relation to a company, income from qualifying patents arising in a relevant period would, apart from this paragraph, be disregarded under subsection (2), and

(ii) in relation to one or more persons who are connected (within the meaning of section 10) with the company referred to in subparagraph (i), income from qualifying patents arising in that relevant period would, apart from this paragraph, be disregarded under subsection (2),

then the aggregate of the amounts of income from qualifying patents, which is to be disregarded under subsection (2), arising to the company and all of those persons in the relevant period shall not be greater than €5,000,000.

(c) Where the aggregate of the amounts of income from qualifying patents in a relevant period arising to a company and all of the persons referred to in paragraph (b) which would, apart from paragraph (b), be disregarded under subsection (2) exceeds €5,000,000, the amount of any income from qualifying patents which is to be so disregarded for the relevant period in relation to the company or any person referred to in paragraph (b) shall be—

(i) so much of €5,000,000 as is allocated to the company or that person in the manner specified in a notice made jointly in writing to the appropriate inspector by the company and the connected persons on or before the time by which a return under section 951 is to be made for the latest chargeable period (within the meaning of section 321(2)) of—

(I) the company, or

(II) any of those persons,

which falls wholly or partly into the relevant period: but the aggregate of the amounts allocated to the company and all of the persons referred to in paragraph (b) in relation to the relevant period shall not exceed €5,000,000, and

(ii) where no such notice is given, an amount determined by the formula—

€5,000,000 x P

where—

P is the aggregate of the amounts of income from qualifying patents arising to the company, or as the case may be the person, in the relevant period, and

T is the aggregate of the amounts of income from qualifying patents arising to the company and all of the persons referred to in paragraph (b) in the relevant period.

(d) For the purposes of this subsection, where a relevant period does not coincide with an accounting period of a company—

(i) the amount of income from qualifying patents arising to the company in the relevant period shall be the aggregate of the amounts of income from qualifying patents arising to the company in any accounting period or part of an accounting period falling within the relevant period,

(ii) income from qualifying patents arising to a company in an accounting period shall be treated as arising in part of that accounting period on a time basis according to the respective lengths of the part and the whole of the accounting period, and

(iii) subject to the preceding provisions of this paragraph, income arising in a relevant period that is to be disregarded under subsection (2) shall be treated as representing income of an accounting period only to the extent that it cannot be treated as representing income of an earlier period, or part of such period.

(e) In this subsection—

‘ income from qualifying patents ’ means income from a qualifying patent or from more than one such patent;

‘ relevant period ’ means the period of 12 months commencing on 1 January 2008 and each subsequent period of 12 months.”.

(2) (a) Subsection (1)(a)applies as respects income from a patent in relation to which the research, planning, processing, experimenting, testing, devising, designing, developing or similar activity leading to the invention which is the subject of the patent is carried out on or after 1 January 2008.

(b) Subsection (1)(b) applies as respects a relevant period beginning on or after 1 January 2008.

Chapter 4 Corporation Tax

46. Amendment of section 766 (tax credit for research and development expenditure) of Principal Act.

46.— (1) Section 766 of the Principal Act is amended in subsection (1)—

(a) in paragraph (a), in paragraph (i) of the definition of “ threshold amount ” by substituting “1 January 2010” for “1 January 2007”, and

(b) in paragraph (b)—

(i) by substituting “activities;” for “activities.” in subparagraph (vii), and

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

“(viii) where in any period a company—

(I) incurs expenditure on research and development, and

(II) pays a sum (not being a sum referred to in subparagraph (vii)(II)) to a person, other than to a person who is connected (within the meaning of section 10) with the company, in order for that person to carry on research and development activities, and that person does not claim relief under this section in respect of such expenditure on research and development,

so much of the sum so paid as does not exceed 10 per cent of that expenditure incurred by the company on research and development shall be treated as if it were expenditure incurred by the company on the carrying on by it of research and development activities.”.

(2) (a) Subject to paragraph (b), this section applies for accounting periods commencing on or after 1 January 2007.

(b) Subsection (1)(b) applies as respects accounting periods ending on or after 1 January 2007 in respect of expenditure incurred on or after 1 January 2007.

47. Amendment of section 958 (date for payment of tax) of Principal Act.

47.— (1) Section 958 of the Principal Act is amended—

(a) in subsection (1)(a) in the definition of “relevant limit” by substituting “€150,000” for “€50,000”,

(b) in subsection (2B) by inserting the following after paragraph (b):

“(c) Where in relation to a chargeable period which is an accounting period of a company—

(i) the tax payable by a chargeable person (being a company) for the chargeable period does not exceed the relevant limit, and

(ii) the chargeable period commenced on the company coming within the charge to corporation tax,

then the preliminary tax appropriate to the chargeable period shall be taken to be nil and subsections (4C) and (4E) shall not apply.”,

(i) by substituting “Subject to subsections (2B)(c), (4E) and (11)” for “Subject to subsection (4E)”, and

(ii) in paragraph (b)(ii) by inserting “or is not a company with a preliminary tax liability of nil by virtue of subsection (2B)(c),” after “accounting period,”,

and

(d) by inserting the following after subsection (10):

“(11) (a) In this subsection—

‘ balance ’ means the amount represented by the formula A — B, where—

A is the amount of preliminary tax paid in accordance with subsection (2B) by the surrendering company for the relevant period, and

B is 90 per cent of the tax payable by the surrendering company for that relevant period;

‘ relevant balance ’ means that part of a balance that is specified in a notice given in accordance with paragraph (c).

(b) This subsection applies where—

(i) a chargeable person being a company (in this subsection referred to as the ‘surrendering company’) which is a member of a group pays an amount of preliminary tax for a chargeable period (in this subsection referred to as the ‘relevant period’) in accordance with subsection (2B), being an amount which exceeds 90 per cent of the tax payable by that surrendering company for the relevant period,

(ii) another chargeable person being a company (in this subsection referred to as the ‘claimant company’) which is a member of the group pays an amount of preliminary tax for a chargeable period in accordance with subsection (2B), being an amount which is less than 90 per cent of the tax payable by that claimant company for the chargeable period,

(iii) the chargeable period referred to in subparagraph (ii) coincides with the relevant period, and

(iv) the claimant company is not a small company in relation to the relevant period.

(c) Where this subsection applies the 2 companies may, at any time on or before the specified return date for the chargeable period of the surrendering company, jointly give notice to the Collector-General in such form as the Revenue Commissioners may require that paragraph (d) is to have effect in relation to the relevant balance specified in the notice.

(d) Where this paragraph has effect in relation to any relevant balance—

(i) an additional amount of preliminary tax equal to the relevant balance shall be deemed for the purposes of subsection (4C)(b)(ii) to have been paid by the claimant company on the due date for the payment of preliminary tax of that company for the relevant period if 100 per cent of the tax payable by the claimant company for the relevant period, disregarding this subparagraph, is paid on or before the specified return date for the relevant period, and

(ii) the surrendering company shall for the purposes of this subsection be treated as having surrendered the relevant balance to the claimant company and that relevant balance shall not be available for use by any other company under this subsection.

(e) A payment for a relevant balance shall not—

(i) be taken into account in computing profits or losses of either company for corporation tax purposes, and

(ii) be regarded as a distribution or a charge on income for any of the purposes of the Corporation Tax Acts,

and, in this paragraph, ‘payment for a relevant balance’ means a payment made by the claimant company to the surrendering company in pursuance of an agreement between them as respects an amount surrendered in accordance with this subsection, being a payment not exceeding that amount.

(f) (i) This subsection shall not affect the liability to pay corporation tax of any company to which the subsection relates.

(ii) Where this subsection applies, the amount on which, but for this subsection, the claimant company is liable to pay interest in accordance with section 1080 shall be reduced by any relevant balance deemed to have been paid by that company in accordance with paragraph (d)(i).

(g) For the purposes of this subsection, 2 companies are members of the same group if and only if they would be such members for the purposes of section 411.”.

(2) (a) Paragraphs (a), (b) and (c) have effect as respects accounting periods in respect of which preliminary tax is payable after 6 December 2006.

(b) Paragraph (d) has effect for accounting periods ending on or after 1 February 2007.

48. Group relief for certain foreign losses.

48.— (1) Chapter 5 of Part 12 of the Principal Act is amended—

(a) in section 411—

(i) by substituting the following for subsection (2):

“(2) Subject to subsection (2A), relief for—

(a) trading losses and other amounts eligible for relief from corporation tax, and

(b) trading losses incurred by non-resident companies and other amounts not otherwise eligible for relief from corporation tax,

may in accordance with this Chapter be surrendered by a company (in this Chapter referred to as the ‘surrendering company’) which is a member of a group of companies and, on the making of a claim by another company (in this Chapter referred to as the ‘claimant company’) which is a member of the same group, may be allowed to the claimant company by means of a relief from corporation tax (in this Chapter referred to as ‘group relief ’).”,

and

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

“(2A) Where the trading losses or other amounts are of the type referred to in paragraph (b) of subsection (2), group relief shall only be available in accordance with this Chapter where—

(a) the surrendering company is—

(i) resident in a relevant Member State, other than the State, and

(ii) a 75 per cent subsidiary of the claimant company,

and

(b) the claimant company is resident in the State.”,

and

(b) by inserting the following after section 420B:

“Group relief: relief for certain losses of non-resident companies.

420C.— (1) In this section—

‘ foreign loss ’ means a loss or other amount eligible for group relief in accordance with section 411(2A);

‘ relevant foreign loss ’ means the amount of a foreign loss that—

(a) corresponds to an amount of a kind that, for the purposes of section 420 or 420A, could be available for surrender by means of group relief by a company resident in the State,

(b) is calculated in accordance with the applicable rules under the law of the surrendering state for determining the amount of loss or other amount eligible for relief from tax in that state,

(d) is not otherwise available for surrender, relief or offset in accordance with any provisions of the Tax Acts,

(e) is a trapped loss within the meaning of subsection (2), and

(f) is not available for surrender, relief or offset under the law of any relevant Member State, other than the State or the surrendering state;

‘ surrendering state ’ means the relevant Member State in which the surrendering company referred to in section 411(2A) is resident for the purposes of tax.

(2) For the purposes of this section a ‘ trapped loss ’, in relation to an accounting period of a company, means a foreign loss that under the law of the surrendering state cannot be (or, if a timely claim for such set off or relief had been made, could not have been) set off or otherwise relieved for the purposes of tax against profits (of whatever description) of—

(a) that accounting period of the company,

(b) any preceding accounting period of the company,

(d) any period of any other company resident in the surrendering state.

(3) (a) Subject to subsection (4), where in any accounting period the surrendering company has incurred a relevant foreign loss, then the amount of the loss shall be treated (with any necessary modifications) for the purposes of sections 420A and 420B as a relevant trading loss incurred by the surrendering company in the accounting period.

(b) Relief for a relevant foreign loss shall be given after relief for any losses (including relief for losses under section 397) which are not relevant foreign losses.

(4) This section does not apply where the relevant foreign loss arose as the result of any arrangements whatsoever the main purpose, or one of the main purposes, of which was to secure that the loss would qualify for group relief.

(5) Subject to subsection (6), a claim under subsection (3) shall be made within 2 years from the end of the accounting period in which the loss is incurred.

(6) Where—

(a) at any time relief under subsection (3) may not be given in respect of a loss by virtue only of paragraph (c) of subsection (2), and

(b) at any later time the claimant company proves to the satisfaction of the Revenue Commissioners that the condition in subsection (2)(c) is satisfied in relation to the loss at that time,

the claimant company may make a claim for relief under subsection (3) in respect of the loss and any such claim shall be made within 2 years from the time at which the condition in subsection (2)(c) is first met.

(7) For the purpose of giving effect to this section ‘accounting period’, in relation to a surrendering company, means a period which would be an accounting period of the company if the company became resident in the State, and accordingly within the charge to corporation tax, at the time when it became a 75 per cent subsidiary referred to in section 411(2A)(a)(ii).

(8) The inspector may by notice in writing require a company claiming relief from tax by virtue of this section to furnish him or her with such information or particulars as may be necessary for the purpose of giving effect to this section.”.

(2) (a) Subject to paragraph (b), subsection (1) is deemed to have applied as respects an accounting period ending on or after 1 January 2006.

(b) For the purposes of this subsection, where an accounting period of a company begins before 1 January 2006 and ends on or after that date, it shall be divided into two parts, one beginning on the date on which the accounting period begins and ending on 31 December 2005 and the other beginning on 1 January 2006 and ending on the date on which the accounting period ends, and both parts shall be treated as if they were separate accounting periods of the company.

49.— (1) Section 79B of the Principal Act is amended—

(a) in subsection (1)(a)—

(i) in the definition of “foreign currency asset” by substituting “functional currency of the company” for “currency of the State”,

(ii) by inserting the following after the definition of “foreign currency asset”:

“ ‘ functional currency’ has the same meaning as in section 402;”,

and

(iii) in the definition of “relevant foreign currency liability” by substituting “functional currency of the company” for “currency of the State”,

(b) in subsection (2) by substituting “functional currency of the company” for “currency of the State”, and

(i) by substituting “Where, in relation to an accounting period of a company, a foreign currency asset” for “Where in an accounting period a company disposes of a foreign currency asset which”, and

(ii) by inserting “for that accounting period” after “income of the company”.

(2) This section is deemed to have applied as on and from 1 January 2006.

50. Amendment of section 452 (application of section 130 to certain interest) of Principal Act.

50.— (1) Section 452 of the Principal Act is amended—

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

“(3A) (a) This paragraph shall apply to so much of any yearly interest as—

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

(ii) is payable by a company in the ordinary course of a trade carried on by that company and would, but for section 130(2)(d)(iv), be deductible as a trading expense in computing the amount of the company’s income from the trade, and

(iii) is not interest to which subsection (2)(a) applies.

(b) Where a company proves that paragraph (a) applies to any interest payable by it for an accounting period and elects to have that interest treated as not being a distribution for the purposes of section 130(2)(d)(iv), then section 130(2)(d)(iv) shall not apply to that interest.”,

and

(b) in subsection (4), by substituting “subsection (2)(b), (3)(b) or (3A)(b)” for “subsection (2)(b) or (3)(b)”.

(2) This section applies as respects interest paid on or after 1 February 2007.

51. Amendment of section 486B (relief for investment in renewable energy generation) of Principal Act.

51.— (1) Section 486B of the Principal Act is amended in subsection (1) by substituting “31 December 2011” for “31 December 2006” in the definition of “qualifying period”.

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

Chapter 5 Capital Gains Tax

52. Amendment of Chapter 6 (transfers of business assets) of Part 19 of Principal Act.

52.— (1) The Principal Act is amended in Chapter 6 of Part 19—

(a) in section 598—

(i) in subsection (1)(a), in the definition of “qualifying assets”—

(I) in paragraph (iii) by deleting “and” and in paragraph (iv)(II) by deleting “section 652(5)(a);” and substituting “section 652(5)(a), and”, and

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

“(v) land which has been let by the individual at any time in the period of 15 years ending with the disposal where

(I) immediately before the time the land was first let in that period of 15 years, the land was owned by the individual and used for the purposes of farming carried on by the individual for a period of not less than 10 years ending at that time, and

(II) the disposal is to a child (within the meaning of section 599) of the individual;”,

and

(ii) in subsection (2)(a) by substituting “€750,000” for “€500,000” in each place where it occurs,

and

(b) in section 599—

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

“(1) (a) In this section ‘child’, in relation to a disposal for which relief is claimed under this section, includes—

(i) a child of a deceased child,

(ii) a nephew or a niece who has worked substantially on a full-time basis, for the period of 5 years ending with the disposal, in carrying on, or assisting in the carrying on of, the trade, business or profession concerned or the work of, or connected with, the office or employment concerned, and

(iii) an individual (in this paragraph referred to as ‘the first-mentioned individual’) who resided with, was under the care of and was maintained at the expense of the individual making the disposal throughout—

(I) a period of 5 years, or

(II) periods which together comprised at least 5 years,

before the first-mentioned individual attained the age of 18 years but only if such claim is not based on the uncorroborated testimony of one witness.”,

and

(ii) by inserting the following after subsection (1)(c):

“(d) Where the qualifying asset is land used for the purposes of farming and the consideration for its disposal consists in whole or in part of other such land, a gain shall not be treated as arising on the disposal of that other land by the child concerned but that other land shall be treated for the purposes of the Capital Gains Tax Acts as having been acquired by the individual at the same time and for the same value and used by the individual for the same purposes as it was originally acquired and used by the child concerned.”.

(2) (a) Subject to paragraph (b), subsection (1) applies as respects disposals made on or after the date of the passing of this Act.

(b) Paragraph (a)(ii) of subsection (1) applies as respects disposals made on or after 1 January 2007.

53. Amendment of section 603A (disposal of site to child) of Principal Act.

53.— (1) Section 603A of the Principal Act is amended by substituting the following for subsection (1A):

“(1A) This section applies to the disposal of land which at the date of the disposal—

(a) has a market value that does not exceed €254,000, and

(b) comprises—

(i) the area of land on which a dwelling house referred to in subsection (2)(b) is to be constructed, and

(ii) an area of land for occupation and enjoyment with that dwelling house as its garden or grounds which, exclusive of the area referred to in subparagraph (i), does not exceed 0.4047 hectare.”.

(2) This section applies to disposals made on or after 1 February 2007.

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

54.— (1) Part 1 of Schedule 15 to the Principal Act is amended in paragraphs 3, 37 and 38 by deleting “gain” and substituting “gain or, if greater, the consideration for the disposal under the Capital Gains Tax Acts”.

(2) This section applies to disposals made on or after 1 February 2007.

55. Amendment of section 746 (offshore income gains accruing to persons resident or domiciled abroad) of Principal Act.

55.— (1) Section 746 of the Principal Act is amended—

(a) in subsection (5) by substituting “resident or ordinarily resident” for “ordinarily resident”, and

(b) in subsections (5) and (6) by substituting “sections 806, 807, 807A, 807B and 807C” for “sections 806, 807 and 807A” in each place where it occurs.

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

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 substituting the following for subsection (5):

“(5) Where any payment referred to in subsection (4)(a) is made by or on behalf of any person, that person shall, within 30 days of the date of the payment, deliver to the Revenue Commissioners an account of the payment and of the amount deducted from the payment, and pay to the Collector-General an amount of capital gains tax equal to 15 per cent of the amount of the payment.

(5A) Capital gains tax which by virtue of subsection (5) is payable by a person who makes a payment shall—

(a) be payable by that person in addition to any capital gains tax which by virtue of any other provision of the Capital Gains Tax Acts is payable by that person,

(b) be due within 30 days of the time when the payment is made, and

but tax which has become so due may be assessed on the person making the payment (whether or not the tax has been paid when the assessment is made) if that tax or any part of that tax is not paid on or before the due date.”,

(b) by substituting the following for subsection (7):

“(7) Where the amount of capital gains tax which, by virtue of subsection (5A), a person has become liable to pay to the Collector-General, has been so paid, appropriate relief shall, on a claim being made in that behalf, be given to the person chargeable in respect of the gain on the disposal, whether by discharge, repayment or otherwise.”,

and

(2) This section applies to disposals made on or after the date of the passing of this Act.

PART 2 Excise

57. Amendment of section 144 (power to deal with seizures, before and after condemnation) of Finance Act 2001.

57.— Section 144 of the Finance Act 2001 is amended by substituting the following for subsection 3(b):

“(b) if the thing seized is in the opinion of the Commissioners of a perishable or hazardous nature or is tobacco products, sell or destroy it.”.

58. Miscellaneous excise repeals.

58.— With effect from 1 July 2007 or such earlier date as the Minister for Finance may by order appoint, the Liqueur Act 1848 and the Bonded Warehouses Act 1848 are repealed.

59. Rates of mineral oil tax.

59.— The Finance Act 1999 is amended—

(a) by substituting the following for Schedule 2 to that Act, as amended by section 79(a) of the Finance Act 2006:

“SCHEDULE 2

(With effect as on and from 1 January 2007)

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	€00.00
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	€00.00

Coal:
For business use	€4.18 per tonne
For other use	€8.36 per tonne

”,

and

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

“SCHEDULE 2

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	€00.00
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	€00.00

Coal:
For business use	€4.18 per tonne
For other use	€8.36 per tonne

”.

60. Mineral oil tax rates for substitute fuels.

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

(a) in section 94(1) by substituting the following for the definition of “substitute fuel”:

“ ‘ substitute fuel ’ means any product in liquid form, other than a mineral oil of a description for which a rate is specified in Schedule 2, that is used, intended for use, or suitable for use as motor or heating fuel, and includes biofuel but does not include additives;”,

(b) in section 96 by inserting the following after subsection (2):

“(2A) (a) Any substitute fuel that is used, intended for use, or suitable for use, as a propellant for a motor vehicle for which unleaded petrol can also be used as a propellant, shall be liable to tax at the rate specified in Schedule 2 for unleaded petrol.

(b) Any substitute fuel, other than a substitute fuel to which paragraph (a) applies, that is used, intended for use, or suitable for use, as a propellant, shall be liable to tax at the rate specified in Schedule 2 for heavy oil used as a propellant with a maximum sulphur content as provided for in that Schedule.

(c) Any substitute fuel to which paragraphs (a) or (b) do not apply, shall be liable to tax at the rate specified in Schedule 2 for other heavy oil.

(d) Without prejudice to paragraphs (a), (b) and (c), where it is shown to the satisfaction of the Commissioners that any quantity of substitute fuel, though suitable for use as a propellant, has been used or is intended for use for other purposes, the Commissioners shall remit or repay (as the case may be) the mineral oil tax chargeable on such quantity under paragraphs (a) or (b), less the amount that would be charged on the same quantity under paragraph (c).”.

61. Mineral oil tax offences.

61.— (1) Chapter 1 of Part 2 of the Finance Act 1999 is amended—

(a) in section 102—

(i) in subsection (1) by substituting the following for paragraph (b):

“(b) to use as a propellant or to keep in a fuel tank—

(i) any mineral oil on which mineral oil tax at the appropriate standard rate has not been paid,

(ii) any mineral oil containing one or more of the markers prescribed by regulations made under section 104, or

(iii) any substance where the importation of mineral oil containing such substance is prohibited by regulations made under section 104,”,

(ii) in subsection (1) by inserting the following after paragraph (d):

“(da) to contravene or fail to comply with a temporary prohibition of trade order under section 102A, or”,

(iii) by inserting the following after subsection (1):

“(1A) It shall be an offence under this subsection—

(a) to invite an offer to treat for, offer for sale, keep for sale, or to sell, or

(b) to deliver, keep for delivery, or to be in the process of delivering, or to keep,

for use as a propellant—

(i) any mineral oil on which mineral oil tax at the appropriate standard rate has not been paid,

(ii) any mineral oil containing one or more of the markers prescribed by regulations made under section 104, or

(iii) any substance where the importation of a mineral oil containing such substance is prohibited by regulations made under section 104.”,

(iv) in subsection (4) by substituting “subsection (1A) or (3)” for “subsection (3)”,

(v) in subsection (5) by substituting “subsection (1), (1A) or (3)” for “subsection (1) or (3)”,

(b) by inserting the following after section 102:

“Consequential provisions relating to offences.

102A.— (1) Where a person licensed under section 101 is convicted of an offence under subsection (1A) or (3)(b) of section 102 of this Act, or an offence in relation to mineral oils under section 119 of the Finance Act 2001, then the Court shall, in addition to any other penalty imposed, make an order, referred to in this section as a temporary prohibition of trade order, prohibiting the sale or supply of any mineral oil from any premises licensed in respect of such person under section 101 and concerned in the offence, for a period of—

(a) not less than one day and not more than 7 days for a first offence by such person,

(b) not less than 7 days and not more than 30 days for a second or subsequent offence by such person,

and the Court may also by such order prohibit the sale or supply of any mineral oil from any other premises so licensed in respect of such person.

(2) In determining the duration of a temporary prohibition of trade order the Court may seek, from an officer involved in the investigation of the offence, a report on the circumstances in which it was committed and any other information which the Court may consider to be relevant.

(3) Where a person is convicted of more than one offence to which subsection (1) applies, and all the offences were committed on the same occasion, then only one temporary prohibition of trade order may be made in respect of such offences.

(4) The prohibition period specified in a temporary prohibition of trade order shall commence—

(a) where no appeal is made against the conviction or the prohibition period, on the 30th day after the order is made, or

(b) where such an appeal is made, and the conviction or prohibition period is affirmed, on the 30th day after such affirmation,

and it shall end on the expiry of the period specified in the order, unless such period has been varied on appeal, in which case it shall end on the expiry of the period so varied.

(5) (a) If, on appeal, a conviction resulting in a temporary prohibition of trade order is reversed, such order shall thereupon cease to have effect.

(b) On any appeal—

(i) against a conviction resulting in a temporary prohibition of trade order, or

(ii) relating to the period specified in such order,

the Court may vary the period specified in such order.

(6) A temporary prohibition of trade order in respect of any premises shall, for the purposes of this Chapter and any regulations made under section 104, have effect as if that premises were not licensed under section 101 for the period specified in such order.

(7) During the period specified in a temporary prohibition of trade order, the person in respect of whom the premises is licensed under section 101 shall ensure that a prominent notice, stating that the closure is in compliance with the order and specifying the period of prohibition of trade, is affixed to the exterior of the premises in a conspicuous place.

(8) Where a person is convicted of—

(a) an offence under section 102(1)(da), or

(b) a third or subsequent offence to which subsection (1) applies,

the Court shall revoke any licence granted to such person under section 101, and no such licence may at any future time be granted to such person.”,

and

“(4) Where, in any proceedings for an offence under subsection (1)(b)(i) or (1A)(i) of section 102, it is proved that the mineral oil that is the subject of the offence is heavy oil other than fuel oil or kerosene, with a sulphur content exceeding 50 milligrammes per kilogramme, then it shall be presumed, until the contrary is proved, that mineral oil tax at the appropriate standard rate has not been paid on such mineral oil.”.

(2) This section only applies to offences committed on a date subsequent to the passing of the Finance Act 2007.

62. Rates of tobacco products tax.

62.— The Finance Act 2005 is amended by substituting the following for Schedule 2 to that Act:

“SCHEDULE 2

Description of Product	Rate of Tax
Cigarettes	€151.37 per thousand together with an amount equal to 17.78 per cent of the price at which the cigarettes are sold by retail
Cigars	€217.388 per kilogram
Fine-cut tobacco for the rolling of cigarettes	€183.443 per kilogram
Other smoking tobacco	€150.815 per kilogram

”.

63. Amendment of section 130 (interpretation) of Finance Act 1992.

63.— Section 130 of the Finance Act 1992 is amended by substituting the following for the definition of “mechanically propelled vehicle” (amended by section 79 of Finance Act 1998):

“ ‘ mechanically propelled vehicle ’ means a vehicle that—

(a) has been designed and constructed for road use,

(b) is, at the time of declaration for registration, in compliance with any measures taken to give effect in the State to any act of the European Communities relating to the approximation of the laws of Member States in respect of type-approval for the type of vehicle concerned,

(c) is intended or adapted for propulsion by a mechanical means, or by an electrical means or by a partly mechanical and a partly electrical means, and

(d) is capable of achieving vehicle propulsion at the time of registration, to the satisfaction of the Commissioners,

including a bicycle, tricycle or quadricycle propelled by an engine or motor or with an attachment for propelling it by mechanical power, whether or not the attachment is being used, a moped, a scooter and an autocycle, but not including a tramcar or other vehicle running on permanent rails or a vehicle including a cycle with an attachment for propelling it by mechanical power not exceeding 400 kilogrammes in weight unladen adapted and used for invalids;”.

64. Amendment of section 135 (temporary exemption from registration) of Finance Act 1992.

64.— Section 135 of the Finance Act 1992 is amended by substituting the following for paragraph (aa):

“(aa) brought into the State by an individual established in the State for such individual’s private or business use where such individual—

(i) is employed by an employer established in another Member State who provides a vehicle as part of their contract of employment, where such vehicle is owned or leased by the employer, or

(ii) is self-employed and has established a legally accountable undertaking in another Member State, whose business is carried on solely or principally in another Member State,

and where the vehicle is a category A vehicle or a motor-cycle, it is used principally for business use in another Member State.”.

65. Remission or repayment in respect of vehicle registration tax on certain hybrid electric vehicles, or certain flexible fuel vehicles, or certain electric vehicles.

65.— Chapter IV of Part II of the Finance Act 1992 is amended by substituting the following for section 135C (substituted by section 88 of Finance Act 2006):

“135C.— (1) In this section—

‘ hybrid electric vehicle ’ means a vehicle that derives its motive power from a combination of an electric motor and an internal combustion engine and is capable of being driven on electric propulsion alone for a material part of its normal driving cycle;

‘ flexible fuel vehicle ’ means a vehicle that derives its motive power from an internal combustion engine that is capable of using a blend of ethanol and petrol, where such blend contains a minimum of 85 per cent ethanol;

‘ electric vehicle ’ means a vehicle that derives its motive power exclusively from an electric motor.

(2) Where a person first registers a category A vehicle or a category B vehicle during the period from 1 January 2007 to 31 December 2007 and the Commissioners are satisfied that the vehicle is—

(a) a series production hybrid electric vehicle, or

(b) a series production flexible fuel vehicle, or

then the Commissioners may remit or repay to that person 50 per cent of the vehicle registration tax payable or paid in accordance with paragraphs (a), (aa), (b) or (c) of section 132(3).”.

66. Amendment of section 21 (hours of business in registered premises) of Betting Act 1931.

66.— Section 21 (inserted by section 85 of the Finance Act 1998) of the Betting Act 1931 is amended by the substitution of the following for subsection (1):

“(1) In this section ‘race-meeting ’ and ‘ authorised racecourse ’ have the same meanings, respectively, as in section 2(1) of the Irish Horseracing Industry Act 1994.

(1A) Registered premises shall not be opened or kept open for the transaction of business at any time on any Christmas Day, Good Friday or Easter Sunday or on any other day—

(a) at any time before 7 o’clock in the morning and after 6.30 o’clock in the evening during the period from 1 September in any year to 31 March in the following year, and

(b) at any time before 7 o’clock in the morning and after 10 o’clock in the evening—

(i) during the period from 1 April in any year to 31 August in that year, and

(ii) during the period from 1 September in any year to 31 March in the following year on any day on which a race-meeting at an authorised racecourse is taking place on or after 6.30 o’clock in the evening on that day.”.

67. Excise duty on registration of firearms dealers.

67.— (1) In this section “ register of firearms dealers ” means the register to be established and kept under section 9 of the Firearms Act 1925.

(2) The duty of excise imposed by section 41(1) of the Finance Act 1925 on the registration of a person in the register of firearms dealers shall be charged, levied and paid at the rate of €340 in lieu of the rate specified in section 159(1) of the Finance Act 1992.

(3) The duty of excise imposed by section 41(3) (inserted by section 52(c) of the Finance Act 1971) of the Finance Act 1925 on the registration of a person in the register of firearms dealers shall be charged, levied and paid at the rate of €55 in lieu of the rate specified in section 159(2) of the Finance Act 1992.

(4) This section comes into effect on 31 December 2007.

68. Excise duty on firearm certificate.

68.— (1) In this section—

“ firearm certificate ” means a firearm certificate within the meaning of section 1(1) (inserted by section 26 of the Criminal Justice Act 2006) of the Firearms Act 1925 and to which section 3 (inserted by section 30 of the Criminal Justice Act 2006) of the Firearms Act 1925 applies and a reference to “firearm” shall be read accordingly;

“ limited certificate ” has the same meaning as in section 3(11) (inserted by section 30 of the Criminal Justice Act 2006) of the Firearms Act 1925.

(2) In respect of every firearm certificate that is granted or renewed on or after 31 December 2007—

(a) an excise duty at the rates specified in the second column of the Table to this section shall be charged, levied and paid on every firearm certificate of a description set out in the first column of the Table opposite the rate set out in the second column, and

(b) subsections (2) and (3) of section 18 of the Finance Act 1964 shall not have effect.

TABLE

Description of Firearm Certificate	Rate of Duty
Certificate for pistol, revolver or rifle	€170
Limited certificate for a shot-gun	€30
Where 2 or more limited certificates for shot-guns are granted to the same person and expire at the same time:

First certificate Second and each subsequent certificate	€30 €30
Certificate for a shot-gun other than limited certificate	€115
Where 2 or more certificates for shot-guns other than limited certificates are granted to the same person and expire at the same time:

First certificate Second and each subsequent certificate	€115 €30
Certificate for crossbow	€115
Where 2 or more certificates for crossbows are granted to the same person and expire at the same time:

First certificate Second and each subsequent certificate	€115 €30
Certificate for prohibited weapon	€30

69. Excise duty on firearm certificate for non-resident.

69.— (1) In this section—

“ firearm certificate ” means a firearm certificate to which section 2 of the Firearms (Firearm Certificates for Non-Residents) Act 2000 applies and a reference to “ firearm ” shall be read accordingly;

“ limited certificate ” has the same meaning as in section 3(11) (inserted by section 30 of the Criminal Justice Act 2006) of the Firearms Act 1925.

(2) In respect of every firearm certificate that is granted on or after 31 December 2007—

(b) subsections (2) and (3) of section 18 of the Finance Act 1964 shall not have effect.

TABLE

Description of Firearm Certificate	Rate of Duty
Certificate for pistol, revolver or rifle	€57
Limited certificate for a shot-gun	€10
Where 2 or more limited certificates for shot-guns are granted to the same person and expire at the same time:

First certificate Second and each subsequent certificate	€10 €10
Certificate for a shot-gun other than limited certificate	€38
Where 2 or more certificates for shot-guns other than limited certificates are granted to the same person and expire at the same time:

First certificate Second and each subsequent certificate	€38 €10
Certificate for crossbow	€38
Where 2 or more certificates for crossbows are granted to the same person and expire at the same time:

First certificate Second and each subsequent certificate	€38 €10
Certificate for prohibited weapon	€10

70. Excise duty on authorisation of rifle or pistol club or shooting range.

70.— (1) In this section “ authorisation of rifle or pistol club or shooting range ” means an authorisation under section 4A (inserted by section 33 of the Criminal Justice Act 2006) of the Firearms Act 1925.

(2) An excise duty of €1,000 shall be charged, levied and paid on every authorisation of rifle or pistol club or shooting range that is granted or renewed on or after 31 December 2007.

71. Excise duty on firearms training certificate.

71.— (1) In this section “ firearms training certificate ” has the same meaning as in section 2A (inserted by section 28 of the Criminal Justice Act 2006) of the Firearms Act 1925.

(2) In respect of every firearms training certificate that is issued on or after 31 December 2007 an excise duty at the rates specified in the second column of the Table to this section shall be charged, levied and paid on every firearms training certificate of a description set out in the first column of the Table opposite the rate set out in the second column.

TABLE

Description of Firearms Training Certificate	Rate of Duty
Certificate for a shot-gun	€115
Certificate for pistol, revolver or rifle	€170

72. Excise duty on licence for reloading of ammunition.

72.— (1) In this section “licence for reloading of ammunition” means a licence under section 10A (inserted by section 40 of the Criminal Justice Act 2006) of the Firearms Act 1925.

(2) An excise duty of €90 shall be charged, levied and paid on every licence for reloading of ammunition that is granted or renewed on or after 31 December 2007.

73. Excise duty on authorisation to possess, use, carry, sell or expose for sale a restricted firearm.

73.— (1) In this section “ authorisation to possess, use, carry, sell or expose for sale a restricted firearm ” means an authorisation under section 10 of the Firearms Act 1925 and to which subsections (4A) to (4G) (inserted by section 39 of the Criminal Justice Act 2006) of the Firearms Act 1925 relate.

(2) An excise duty of €405 shall be charged, levied and paid on every authorisation to possess, use, carry, sell or expose for sale a restricted firearm that is granted or renewed on or after 31 December 2007.

74. Excise: designation of secure premises for keeping of detained or seized goods.

74.— The Finance Act 2001 is amended by inserting the following new section after section 139:

“139A.— Any thing detained or seized under the law relating to excise may, in addition to being duly kept by an officer, also be kept in any secure premises or place designated by the Commissioners for such purpose, and the Commissioners may designate a premises or place under the control of a person contracted to them for such purpose.”.

PART 3 Value-Added Tax

75. Interpretation (Part 3).

75.— In this Part and in Schedule 3 “Principal Act” means the Value-Added Tax Act 1972.

76. Amendment of section 3 (supply of goods) of Principal Act.

76.— Section 3 of the Principal Act is amended with effect from 1 May 2007—

(a) in subsection (1)(a) by substituting “including” for “other than”,

(b) in subsection (5)—

(i) by inserting in paragraph (a) “by the person supplying financial services of the kind specified in subparagraph (i)(e) of the First Schedule as part of that contract” after “referred to in subsection (1)(b)”, and

(ii) in paragraph (c)—

(I) by deleting in subparagraph (i) “being goods which are of such a kind or were used in such circumstances that no part of the tax, if any, chargeable on that supply of those goods was deductible by the person to whom that supply was made,” and

(II) by substituting “shall be deemed for the purposes of this Act to be a supply of goods to which paragraph (xxiv) of the First Schedule does not apply” for “shall be deemed for the purposes of this Act not to be a supply of goods”.

77. Amendment of section 5 (supply of services) of Principal Act.

77.— (1) Section 5 of the Principal Act is amended in subsection (6)—

(a) by deleting paragraph (e)(iv), and

(b) with effect from 1 January 2008—

(i) by substituting the word “intermediary” for “agent” in paragraph (f)(iii) and in subparagraphs (i)(II) and (ii) of paragraph (g), and

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

“(gg) Subject to paragraph (f)(iii), the place of supply of services of an intermediary acting in the name and on behalf of another person, other than in cases where that intermediary takes part in the intra-Community transport of goods or in activities ancillary to the intra-Community transport of goods, is the place where the underlying transaction is supplied in accordance with this Act.”.

(2) Subsection (1)(a) comes into operation on such day as the Minister for Finance may by order appoint.

78. Amendment of section 7 (waiver of exemption) of Principal Act.

78.— Section 7 of the Principal Act is amended by inserting the following after subsection (1):

“(1A) (a) Notwithstanding subsection (1)(a), a person shall not waive his or her right to exemption from tax on or after the date of passing of the Finance Act 2007 in respect of a letting of immovable goods to which paragraph (iv) of the First Schedule relates which is a letting of all or part of a house, apartment or other similar establishment, to the extent that those immovable goods are used or to be used for residential purposes, including any such letting—

(i) governed by the Residential Tenancies Act 2004,

(ii) governed by the Housing (Rent Books) Regulations 1993 (S.I. No. 146 of 1993),

(iii) governed by section 10 of the Housing Act 1988,

(iv) of a dwelling to which Part II of the Housing (Private Rented Dwellings) Act 1982 applies, or

(v) of accommodation which is provided as a temporary dwelling for emergency residential purposes,

and any waiver of exemption from tax which applies under this section shall not extend to such a letting of immovable goods where those goods are acquired or developed on or after the date of passing of the Finance Act 2007.

(b) For the purpose of applying paragraph (a), immovable goods are considered to be acquired when a person enters into a binding contract in writing for the acquisition of those goods or of an interest in those goods, or for the construction of those goods, and are considered to be developed when an application for planning permission in respect of the development of those goods as a house, apartment or other similar establishment is received by a planning authority.”.

79. Amendment of section 8 (taxable persons) of Principal Act.

79.— Section 8 of the Principal Act is amended—

(a) with effect from 1 March 2007—

(i) in subsections (3), (3A) and (9), by substituting “€35,000” for “€27,500” in each place it occurs, and

(ii) in subsection (3) by substituting “€70,000” for “€55,000” in each place it occurs,

and

(b) in subsection (8)—

(i) in paragraph (a)—

(I) by substituting “, established in the State and engaged in the supply of goods or services in the course or furtherance of business,” for “established in the State”,

(II) by substituting “for the purpose of this Act, the said Commissioners may, whether following an application on behalf of those persons or otherwise” for “subject to such conditions as they may impose by regulations, the said Commissioners, for the purposes of this Act, may”,

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

“(i) by notice in writing to each of those persons deem them to be a single taxable person, referred to in this section as a ‘group’ and the persons so notified shall then be regarded as being in the group for as long as this paragraph applies to them, but the provisions of section 9 shall apply in respect of each of the members of the group, and—

(I) one of those persons, who shall be notified accordingly by the Commissioners, shall be responsible for complying with the provisions of this Act in respect of the group, and

(II) all rights and obligations arising under this Act in respect of the transactions of the group shall be determined accordingly, and”,

and

(IV) in subparagraph (ii) by substituting “make each person in the group” for “make each such person”,

(ii) by deleting paragraph (c), and

(iii) by inserting the following after paragraph (d):

“(e) The Revenue Commissioners may make regulations as seem to them to be necessary for the purposes of this subsection.”.

80. Amendment of section 10 (amount on which tax is chargeable) of Principal Act.

80.— Section 10 of the Principal Act is amended:

(a) in subsection (3)—

(i) by deleting paragraph (a), and

(ii) in paragraph (c) by substituting “subsection (3A)” for “paragraph (a)”,

(b) by inserting the following subsection after subsection (3):

“(3A) (a) The Revenue Commissioners may, where they consider it necessary or appropriate to do so to ensure the correct collection of the tax, make a determination that the amount on which tax is chargeable on a supply of goods or services is the open market value of that supply, if they are satisfied that the actual consideration in relation to that supply is—

(i) lower than the open market value of that supply where the recipient of that supply has no entitlement to deduct tax under section 12, or is not entitled to deduct all of the tax chargeable on that supply, or is a flat-rate farmer,

(ii) lower than the open market value of that supply, being an exempted activity, where the supplier engages in the course or furtherance of business in non-deductible supplies or activities as defined in section 12(4)(a), or is a flat-rate farmer, or

(iii) higher than the open market value where the supplier engages in the course or furtherance of business in non-deductible supplies or activities as defined in section 12(4)(a), or is a flat-rate farmer,

and that—

(I) the supplier and the recipient of that supply are persons connected by financial or legal ties, being persons who are party to any agreement, understanding, promise or undertaking whether express or implied and whether or not enforceable or intended to be enforceable by legal proceedings, or

(II) either the supplier or the recipient of that supply exercises control over the other and for this purpose ‘control’ has the meaning assigned to it by section 8(3B).

(b) A value determined in accordance with this subsection shall be deemed to be the true value of the supply to which it applies, for all the purposes of this Act.

(d) A determination under this section may be made by an inspector of taxes or such other officer as the Revenue Commissioners may authorise for the purpose.”,

and

“ ‘ open market value ’, in relation to a supply of goods or services, means the total consideration excluding tax that a customer, at a marketing stage which is the same as the stage at which the supply of the goods or services takes place, would reasonably be expected to pay to a supplier at arm’s length under conditions of fair competition for a comparable supply of such goods or services;

but if there is no such comparable supply of goods or services then ‘ open market value ’ means—

(a) in respect of a supply of goods, an amount that is not less than the purchase price of the goods or of similar goods or, in the absence of a purchase price, the cost price, determined at the time of supply,

(b) in respect of a supply of services, an amount that is not less than the full cost to the supplier of providing the service;”.

81. Amendment of section 10A (margin scheme goods) of Principal Act.

81.— Section 10A(1) of the Principal Act is amended with effect from 1 May 2007 in the definition of “margin scheme goods” by substituting “section 3(5)(d)” for “paragraphs (c) and (d) of subsection (5) of section 3”.

82. Amendment of section 10B (special scheme for auctioneers) of Principal Act.

82.— Section 10B of the Principal Act is amended with effect from 1 May 2007 by deleting paragraph (aa) of subsection (1).

83. Amendment of section 12 (deduction for tax borne or paid) of Principal Act.

83.— Section 12 of the Principal Act is amended—

(a) with effect from 1 May 2007 in subsection (1)(a) by deleting subparagraph (ia), and

(b) in subsection (3)—

(i) with effect from 1 July 2007 in paragraph (a) by substituting the following for subparagraph (i):

“(i) expenditure incurred by the taxable person on food or drink, or accommodation other than qualifying accommodation in connection with attendance at a qualifying conference as defined in paragraph (ca), or other personal services, for the taxable person, the taxable person’s agents or employees, except to the extent, if any, that such expenditure is incurred in relation to a supply of services in respect of which that taxable person is accountable for tax,”,

(ii) with effect from 1 May 2007 in paragraph (a)(iii) by inserting “or for the purpose of the supply thereof by a person supplying financial services of the kind specified in subparagraph (i)(e) of the First Schedule in respect of those motor vehicles as part of an agreement of the kind referred to in section 3(1)(b)” after “stock-in-trade”, and

(iii) with effect from 1 July 2007 by inserting the following paragraph after paragraph (c):

“(ca) For the purposes of subparagraph (a)(i)—

‘ delegate ’ means a taxable person or a taxable person’s employee or agent who attends a qualifying conference in the course or furtherance of that taxable person’s business;

‘ qualifying accommodation ’ means the supply to a delegate of a service consisting of the letting of immovable goods or accommodation covered by paragraph (xiii) of the Sixth Schedule, for a maximum period starting from the night prior to the date on which the qualifying conference commences and ending on the date on which the conference concludes;

‘ qualifying conferenc e’ means a conference or meeting in the course or furtherance of business organised to cater for 50 or more delegates, which takes place on or after 1 July 2007 at a venue designed and constructed for the purposes of hosting 50 or more delegates and in respect of which the person responsible for organising the conference issues in writing the details of the conference to each taxable person who attends or sends a delegate, and such details shall include—

(i) the location and dates of the conference,

(ii) the nature of the business being conducted,

(iii) the number of delegates for whom the conference is organised, and

(iv) the name, business address and VAT registration number of the person responsible for organising the conference.”.

84. Amendment of section 12A (special provisions for tax invoiced by flat-rate farmers) of Principal Act.

84.— With effect from 1 January 2007, section 12A of the Principal Act is amended in subsection (1) by substituting “5.2 per cent” for “4.8 per cent”.

85. Amendment of section 12B (special scheme for means of transport supplied by taxable dealers) of Principal Act.

85.— Section 12B of the Principal Act is amended with effect from 1 May 2007 in subsection (2)(aa) by substituting “section 3(5)(d)” for “paragraphs (c) and (d) of subsection (5) of section 3”.

86. Amendment of section 12C (special scheme for agricultural machinery) of Principal Act.

86.— Section 12C of the Principal Act is amended in subsections (1A) and (1B) by substituting “section 3(5)(d)” for “section 3(5)(c) or (d)” wherever it occurs.

87. Amendment of section 14 (determination of tax due by reference to cash receipts) of Principal Act.

87.— Section 14 of the Principal Act is amended with effect from 1 March 2007 in subsection (1) by substituting the following paragraph for paragraph (b):

“(b) the total consideration which such person is entitled to receive in respect of such person’s taxable supplies has not exceeded and is not likely to exceed €1,000,000 in any continuous period of 12 months,”.

88. Amendment of section 15B (goods in transit (additional provisions)) of Principal Act.

88.— With effect from 1 January 2007, section 15B is amended—

(a) in subsection (5A)—

(i) by substituting “the Slovak Republic,” for “the Slovak Republic, or” in subparagraph (ii), and

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

“(iia) the date of the first use of the means of transport was before 1 January 1999 in the case of means of transport entering the State from the Republic of Bulgaria or Romania, or”,

and

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Finance Act 2007

41. Amendment of section 739D (gain arising on a chargeable event) of Principal Act.

42. Amendment of section 730H (interpretation and application) of Principal Act.

43. Amendment of Chapter 5 (policyholders — new basis) of Part 26 of Principal Act.

44. Amendment of Chapter 1 (transfer of assets abroad) of Part 33 of Principal Act.

45. Amendment of section 234 (certain income derived from patent royalties) of Principal Act.

Chapter 4 Corporation Tax

46. Amendment of section 766 (tax credit for research and development expenditure) of Principal Act.

47. Amendment of section 958 (date for payment of tax) of Principal Act.

48. Group relief for certain foreign losses.

49. Amendment of section 79B (matching of foreign currency assets with certain foreign currency share capital) of Principal Act.

50. Amendment of section 452 (application of section 130 to certain interest) of Principal Act.

51. Amendment of section 486B (relief for investment in renewable energy generation) of Principal Act.

Chapter 5 Capital Gains Tax

52. Amendment of Chapter 6 (transfers of business assets) of Part 19 of Principal Act.

53. Amendment of section 603A (disposal of site to child) of Principal Act.

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

55. Amendment of section 746 (offshore income gains accruing to persons resident or domiciled abroad) of Principal Act.

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

PART 2 Excise

57. Amendment of section 144 (power to deal with seizures, before and after condemnation) of Finance Act 2001.

58. Miscellaneous excise repeals.

59. Rates of mineral oil tax.

60. Mineral oil tax rates for substitute fuels.

61. Mineral oil tax offences.

62. Rates of tobacco products tax.

63. Amendment of section 130 (interpretation) of Finance Act 1992.

64. Amendment of section 135 (temporary exemption from registration) of Finance Act 1992.

65. Remission or repayment in respect of vehicle registration tax on certain hybrid electric vehicles, or certain flexible fuel vehicles, or certain electric vehicles.

66. Amendment of section 21 (hours of business in registered premises) of Betting Act 1931.

67. Excise duty on registration of firearms dealers.

68. Excise duty on firearm certificate.

69. Excise duty on firearm certificate for non-resident.

70. Excise duty on authorisation of rifle or pistol club or shooting range.

71. Excise duty on firearms training certificate.

72. Excise duty on licence for reloading of ammunition.

73. Excise duty on authorisation to possess, use, carry, sell or expose for sale a restricted firearm.

74. Excise: designation of secure premises for keeping of detained or seized goods.

PART 3 Value-Added Tax

75. Interpretation (Part 3).

76. Amendment of section 3 (supply of goods) of Principal Act.

77. Amendment of section 5 (supply of services) of Principal Act.

78. Amendment of section 7 (waiver of exemption) of Principal Act.

79. Amendment of section 8 (taxable persons) of Principal Act.

80. Amendment of section 10 (amount on which tax is chargeable) of Principal Act.

81. Amendment of section 10A (margin scheme goods) of Principal Act.

82. Amendment of section 10B (special scheme for auctioneers) of Principal Act.

83. Amendment of section 12 (deduction for tax borne or paid) of Principal Act.

84. Amendment of section 12A (special provisions for tax invoiced by flat-rate farmers) of Principal Act.

85. Amendment of section 12B (special scheme for means of transport supplied by taxable dealers) of Principal Act.

86. Amendment of section 12C (special scheme for agricultural machinery) of Principal Act.

87. Amendment of section 14 (determination of tax due by reference to cash receipts) of Principal Act.

88. Amendment of section 15B (goods in transit (additional provisions)) of Principal Act.