Finance (No. 2) Act 2008

AN ACT TO PROVIDE FOR THE IMPOSITION, REPEAL, REMISSION, ALTERATION AND REGULATION OF TAXATION, OF STAMP DUTIES AND OF DUTIES RELATING TO EXCISE AND OTHERWISE TO MAKE FURTHER PROVISION IN CONNECTION WITH FINANCE INCLUDING THE REGULATION OF CUSTOMS.

[24th December, 2008]

BE IT ENACTED BY THE OIREACHTAS AS FOLLOWS:

PART 1 Levies, Income Tax, Corporation Tax and Capital Gains Tax

Chapter 1 Interpretation

1. Interpretation (Part 1).

1.— In this Part “Principal Act” means the Taxes Consolidation Act 1997.

Chapter 2 Levies

2. Income levy.

2.— The Principal Act is amended—

• (a) by inserting the following after Part 18:

“LEVIES

PART 18A

Income Levy

Definitions (Part 18A).

531A.— (1) In this Part—

‘ aggregate income ’, in relation to an individual and a year of assessment, means the aggregate of the individual’s relevant emoluments and relevant income for the year of assessment;

‘ Collector-General ’ means the Collector-General appointed under section 851;

‘ employee ’ and ‘ employer ’ have the same meanings as in section 983;

‘ excluded emoluments ’ means emoluments which have been gifted to the Minister for Finance under section 483;

‘ income levy ’ has the meaning assigned to it by section 531B;

‘ income tax month ’ means a calendar month;

‘ PAYE Regulation s’ means the Income Tax (Employments) (Consolidated) Regulations 2001 (S.I. No. 559 of 2001);

‘ relevant emoluments ’ and ‘relevant income’ shall be construed in accordance with paragraphs (a) and (b), respectively, of the Table to section 531B(1);

‘ similar type payments ’ means payments which are of a similar character to payments made under the Social Welfare Acts but which are made by—

• (a) the Health Service Executive,

• (b) the Department of Community, Rural and Gaeltacht Affairs,

• (c) the Department of Enterprise, Trade and Employment,

• (d) the Department of Education and Science,

• (e) the Department of Agriculture, Fisheries and Food,

• (f) An Foras Áiseanna Saothair, in respect of schemes mentioned in clauses (I), (II) and (III) of section 472A(1)(b)(i), or

• (g) any other state or territory;

‘ social welfare payments ’ means payments made under the Social Welfare Acts;

‘ year of assessment ’ means a year of assessment within the meaning of the Tax Acts.

• (2) Words and expressions used in this Part have, except where otherwise provided or where the context otherwise requires, the same meaning as in the Tax Acts.

Charge to income levy.

531B.— (1) With effect from 1 January 2009, there shall be charged, levied and paid, in accordance with the provisions of this Part, a tax to be known as ‘ income levy ’ in respect of the income specified in paragraphs (a) and (b) of the Table to this subsection.

TABLE

- (*a*) The income described in this paragraph, to be known as ‘ rel evant emoluments ’, is emoluments to which Chapter 4 of Part 42 applies or is applied, other than social welfare payments and similar type payments and excluded emoluments.

- (*b*) The income described in this paragraph, to be known as ‘relevant income’, is income from all sources, other than relevant emoluments, social welfare payments and similar type payments and excluded emoluments, as estimated in accordance with the Income Tax Acts and—

    - (i) as if sections 140, 141, 142, 143, 195, 231, 232, 233, 234 and 664 were never enacted,

    - (ii) without regard to any deduction—

        - (I) in respect of double rent allowance under section 324(2), 333(2), 345(3) or 354(3),

        - (II) under section 372AP, in computing the amount of a surplus or deficiency in respect of rent from any premises,

        - (III) under section 372AU, in computing the amount of a surplus or deficiency in respect of rent from any premises,

        - (IV) under section 847A, in respect of a relevant donation (within the meaning of that section), or

        - (V) under section 848A, in respect of a relevant donation (within the meaning of that section),

    - (iii) excluding gains, income or payments to which any of the following provisions apply:

        - (I) Chapter 4 of Part 8;

        - (II) Chapter 5 of Part 8;

        - (III) Chapter 7 of Part 8;

        - (IV) Chapter 5 of Part 26;

        - (V) Chapter 6 of Part 26;

        - (VI) Chapter 1A of Part 27;

        - (VII) Chapter 4 of Part 27,

          and

    - (iv) having regard to a deduction for any payment to which section 1025 applies, made by an individual pursuant to a maintenance arrangement (within the meaning of that section), relating to the marriage for the benefit of the other party to the marriage, unless section 1026 applies in respect of such payment.

• (2) The income levy shall not be payable, for a year of assessment, by an individual who—

  • (a) proves to the satisfaction of the Revenue Commissioners that his or her aggregate income for the year of assessment does not exceed €18,304,

  • (b) by virtue of section 45 of the Health Act 1970 or Council Regulation (EEC) No. 1408/71 ¹ of 14 June 1971 has full eligibility for services under Part IV of that Act, or

  • (c) following receipt of a claim made in a manner approved or provided by the Revenue Commissioners, proves to their satisfaction that his or her aggregate income for the year of assessment does not exceed €20,000 and who has achieved the age of 65 years or over at any time during that year of assessment.

  Rate of charge.

  531C.— For the year of assessment 2009, and for each subsequent year of assessment, an individual shall be charged to income levy on his or her aggregate income for the year of assessment at the rates specified in the Table to this section.

  TABLE

  	Part of aggregate income	Rate of income levy
  	The first €100,100	1%
  	The next €150,020	2%
  	The remainder	3%

  Deduction and payment of income levy on relevant emoluments.

  531D.— (1) An employer shall be liable in the first instance to pay income levy due in respect of any payment of relevant emoluments.

• (2)

  • (a) As respects any payment of relevant emoluments made to or on behalf of an employee on or after 1 January 2009, income levy shall be deducted from such emoluments by the employer at any or all of the rates specified in subparagraphs (i) and (ii) of paragraph (c) and for this purpose the said subparagraph (ii) shall apply as if the words ‘but does not exceed €4,810’ were deleted.

  • (b) As respects any payment of relevant emoluments made to or on behalf of an employee on or after the passing of the Finance (No.2) Act 2008, income levy shall be deducted from such emoluments by the employer at any or all of the rates specified in subparagraphs (i), (ii) and (iii) of paragraph (c).

  • (c) The rates referred to in paragraphs (a) and (b) are as follows:

    • (i) 1 per cent where the amount of the relevant emoluments does not exceed €1,925, in the case where the period in respect of which the payment is being made is a week, or a corresponding amount where the period is greater or less than a week,

    • (ii) 2 per cent on the amount of the excess where the amount of the relevant emoluments exceeds €1,925, but does not exceed €4,810, in the case where the period in respect of which the payment is being made is a week, or a corresponding amount where the period is greater or less than a week,

    • (iii) 3 per cent on the amount of the excess where the amount of the relevant emoluments exceeds €4,810, in the case where the period in respect of which payment is being made is a week, or a corresponding amount where the period is greater or less than a week,

    and notwithstanding that the relevant emoluments are in whole or in part for some year of assessment other than that during which the payment is made.

• (3) The provisions of Part 4 of the PAYE Regulations, with any necessary modifications, shall apply to income levy in respect of relevant emoluments, and income levy payable by an employee shall only be recoverable from him or her by his or her employer by deduction in accordance with those provisions.

• (4)

  • (a) (i) Within 14 days of the end of every income tax month the employer shall remit to the Collector-General the total of all amounts of income levy which the employer was liable to deduct from relevant emoluments paid by the employer during that income tax month.

    • (ii) The Collector-General may, in writing, and unless the employer objects, authorise the employer to remit to the Collector-General, within 14 days from the end of such longer period (if any) but not exceeding one year, as may be so authorised, the total of all amounts of income levy which the employer was liable to deduct from relevant emoluments paid by the employer during that longer period.

    • (iii) Where a remittance referred to in subparagraph (i) is made by such electronic means (within the meaning of section 917EA) as are approved by the Revenue Commissioners, subparagraph (i) shall apply and have effect as if ‘Within 23 days of the end of every income tax month’ were substituted for ‘Within 14 days of the end of every income tax month’ but, where the said remittance is not made within that period of 23 days, subparagraph (i) shall apply and have effect without regard to the provisions of this subparagraph.

  • (b) On payment of income levy, the Collector-General may furnish the employer concerned with a receipt in respect of the payment which shall consist of whichever of the following the Collector-General considers appropriate, namely—

    • (i) a separate receipt in respect of each such payment, or

    • (ii) a receipt for all such payments made within the period specified in the receipt.

• (5)

  • (a) Within 46 days from the end of a year of assessment, or from the date the employer ceases permanently to be an employer to whom Regulation 7(1) of the PAYE Regulations applies, whichever is the earlier, the employer shall send to the Collector-General—

    • (i) a return, in a form provided or approved of by the Revenue Commissioners, in respect of each individual to whom payment of relevant emoluments was made during that year showing—

      • (I) the total amount of income levy payable as respects the individual in that year,

      • (II) the dates of commencement and cessation within that year of the employment of the individual, where applicable,

      • (III) the rate of income levy payable as respects the individual, and

      • (IV) the total relevant emoluments paid to the individual in that year,

      and

    • (ii) a statement, declaration and certificate, in such form as may be provided or approved of by the Revenue Commissioners, showing the total amount of income levy which the employer was liable to remit in respect of every individual to whom payment of relevant emoluments was made in the year of assessment.

  • (b) Where the employer is a body corporate, the declaration and certificate referred to in paragraph (a)(ii) shall be signed either by the secretary or a director of the body corporate.

• (6)

  • (a) (i) Within 46 days from the end of a year of assessment, the employer shall give to every employee who is in the employer’s employment on the last day of the year of assessment and from whose relevant emoluments any income levy has been deducted during that year, a certificate showing—

    • (I) the total amount of income levy deducted from the relevant emoluments of the employee during that year,

    • (II) the date of commencement within that year of the employment of the employee, where applicable,

    • (III) the rate of income levy payable as respects the employee, and

    • (IV) the total relevant emoluments paid to the employee in that year.

    • (ii) The certificate specified in subparagraph (i) shall be in such form as may be provided or approved by the Revenue Commissioners.

  • (b) (i) An employer shall, in the case of an employee to whom he or she makes a payment of relevant emoluments, give to the employee, on the cessation of the period of employment to which the payment of income levy in respect of the employee relates, a certificate showing—

    • (I) the total income levy as respects the employee which the employer was liable to remit for the year of assessment in which the cessation occurs up to and including the date of cessation,

    • (II) the dates of commencement (where applicable) and cessation within that year of the employment of the individual,

    • (III) the rate of income levy payable as respects the employee, and

    • (IV) the total relevant emoluments paid to the employee in that year up to and including the date of cessation.

    • (ii) The certificate specified in subparagraph (i) shall be in such form as may be provided or approved of by the Revenue Commissioners.

    Record keeping.

    531E.— (1) An employer shall record the following particulars in respect of each employee to whom payment of relevant emoluments has been made in a year of assessment—

  • (a) the amount of each payment of relevant emoluments,

  • (b) the amount of income levy deducted from each such payment,

  • (c) the total amount of income levy which the employer is liable to remit in respect of each such payment, and

  • (d) the dates of commencement and cessation within the year of assessment of the employment of the individual, where applicable.

• (2) The records specified in subsection (1) shall be in a form approved of by the Revenue Commissioners and shall be retained by employers for not less than 6 years after the end of the year of assessment to which they relate.

Power of inspection.

531F.— The provisions of section 903 and Regulation 32 of the PAYE Regulations, in relation to inspection of records, with any necessary modifications, shall apply to the particulars recorded pursuant to section 531E as they apply to the records specified in those provisions.

Estimation of income levy due for income tax months and for year.

531G.— Sections 989, 990 and 990A shall apply to income levy as they apply to income tax.

Assessment, collection, payment and recovery of income levy on relevant income.

531H.— (1) Income levy payable for a year of assessment in respect of relevant income shall be assessed, charged and paid in all respects as if it was an amount of income tax assessed and charged under the Income Tax Acts, but without regard to section 1017, and may be stated in one sum (in this section referred to as the ‘aggregated sum’) with the amount of income tax contained in any computation of, or assessment or assessments to, income tax made by or on the individual by whom the income levy is payable for the year of assessment.

• (2) For the purposes of subsection (1) the income levy may be so stated notwithstanding that there is no amount of income tax contained in the said computation, assessment or assessments, and all the provisions of the Income Tax Acts, other than any such provisions in so far as they relate to the granting of any allowance, deduction or relief, shall apply as if the aggregated sum were a single sum of income tax.

• (3) Where income levy is payable for the year of assessment 2009 in respect of relevant income, section 958 shall apply and have effect as if, in accordance with this Part, income levy had been payable for the year of assessment 2008.

Married couples.

531I.— Where an election has been made or is deemed to have been made under section 1018 and has effect for a year of assessment, income levy payable by one spouse shall be charged, collected and recovered as if it were income levy payable by the spouse assessable under section 1017.

False statements.

531J.— The provisions of section 1056 in relation to the making of returns, declarations or statements shall apply, with any necessary modifications, in relation to income levy.

Repayments.

531K.— (1) In any case of underpayment or overpayment of income levy to the Collector-General, payment of the amount not paid or repayment of the amount overpaid, as the case may be, shall be made to or by the Collector-General, as appropriate.

• (2) In the case of an individual to whom paragraph (a), (b) or (c) of section 531B(2) applies, any income levy deducted from his or her income shall be repaid to the individual by the Revenue Commissioners on receipt of a valid claim made in such manner as may be approved by the Revenue Commissioners, and for the purposes of such repayment the income levy shall be deemed to be income tax.

• (3) Where, at the end of a year of assessment, married persons assessed to tax for the year of assessment under section 1017, one or both of whom have reached the age of 65 years or over at any time during the year of assessment, prove to the satisfaction of the Revenue Commissioners that their aggregate income from all sources is not in excess of twice the limit set out in section 531B(2)(c), then the Revenue Commissioners shall repay such income levy, if any, as has been deducted from that income during that year of assessment.

Restriction on deduction.

531L.— (1) Income levy paid in respect of a year of assessment is in addition to, and does not reduce, any liability which an individual may have in respect of income tax or other taxes under the Tax Acts.

• (2) Excess tax credits or reliefs which are available to an individual may not be set against any charge to income levy which is due and payable for a year of assessment.

Application of provisions relating to income tax.

531M.— (1) The provisions of Chapter 1 of Part 40, in relation to appeals, shall apply to income levy as they apply to income tax.

• (2) The provisions of Part 47, in relation to penalties, offences, interest and other sanctions, shall apply in relation to income levy as they apply to income tax.

• (3) Section 865 shall apply to any repayment of income levy as it applies to income tax.

• (4) Section 987 shall apply, with any necessary modifications, to income levy as it applies to income tax.

Care and management.

531N.— Income levy is under the care and management of the Revenue Commissioners and Part 37 shall apply to income levy as it applies to income tax.”,

• (b) in section 1002, in the definition of “the Acts”, by inserting the following after paragraph (iii):

“(iiia) Part 18A,”,

• (c) in section 1006, in the definition of “the Acts”, by inserting the following after paragraph (a):

• “(aa) Part 18A,”,

• (d) in section 1006A, in the definition of “the Acts”, by inserting the following after paragraph (a):

• “(aa) Part 18A,”,

• (e) in section 1078, in the definition of “the Acts”, by inserting the following after paragraph (c):

• “(ca) Part 18A,”,

and

• (f) in section 1079, in the definition of “the Acts”, by inserting the following after paragraph (c):

• “(ca) Part 18A,”.

3. Parking levy in urban areas.

3.— (1) The Principal Act is amended—

• (a) by inserting the following after Part 18A (inserted by section 2):

“PART 18B

Parking Levy in Urban Areas

Interpretation (Part 18B).

531O.— In this Part—

‘ car ’ means a mechanically propelled road vehicle designed, constructed or adapted for the carriage of the driver or the driver and one or more other persons, other than—

• (a) a motor-cycle (within the meaning of section 121),

• (b) an official vehicle,

• (c) a van (within the meaning of section 121A) where an employee is required by the employer to use the van in the performance of the duties of his or her office or employment, or

• (d) a vehicle, other than a van, of a type not commonly used as a private vehicle and unsuitable to be so used;

‘ disabled person’s parking permit ’ means a permit granted in accordance with Article 43 of the Road Traffic (Traffic and Parking) Regulations 1997 (S.I. No. 182 of 1997);

‘ emoluments ’ means emoluments to which Chapter 4 of Part 42 applies;

‘ employee ’ has the same meaning as it has for the purposes of the PAYE Regulations;

‘ employer ’ has the same meaning as it has for the purposes of the PAYE Regulations;

‘ entitlement to use a parking space ’ shall be construed in accordance with section 531Q;

‘ fire authority ’ has the same meaning as it has for the purposes of the Fire Services Act 1981;

‘ maternity leave ’ means the period of leave referred to in section 8 (as amended by section 2 of the Maternity Protection (Amendment) Act 2004 and by the Maternity Protection Act 1994 (Extension of Periods of Leave) Order 2006) of the Maternity Protection Act 1994;

‘ mechanically propelled road vehicle ’ includes a vehicle the means of propulsion of which is electrical or partly electrical and partly mechanical;

‘ Minister ’ means the Minister for Finance;

‘ net emoluments ’ means emoluments (less allowable contributions (within the meaning of Regulation 41 of the PAYE Regulations)) after the deduction, in accordance with—

• (a) the PAYE Regulations, of income tax,

• (b) the Social Welfare (Consolidated Contributions and Insurability) Regulations 1996 (S.I. No. 312 of 1996), of a contribution within the meaning of those regulations,

• (c) the Health Contributions Regulations 1979 (S.I. No. 107 of 1979), of a health contribution, and

• (d) Part 18A (as inserted by the Finance (No. 2) Act 2008), of income levy;

‘ official vehicle ’ means a vehicle which is owned or provided by the State or by a State authority where an employee of the State or of such an authority is required by the employer to use the vehicle in the performance of the duties of his or her office or employment;

‘ parking levy ’ means the tax, provided for in section 531T, on an entitlement to use a parking space in an urban area;

‘ parking space ’ means any area or part of an area on, at, or in which it is possible to park a vehicle and includes any part of a building, erection or structure (including a moveable structure);

‘ PAYE Regulations ’ means the Income Tax (Employments) (Consolidated) Regulations 2001 (S.I. No. 559 of 2001);

‘ personal public service number ’ has the same meaning as in section 262 of the Social Welfare Consolidation Act 2005;

‘ public sector employee ’ means a person whose emoluments are paid, funded or partly funded directly or indirectly by the State;

‘ relevant local authority ’ means the city council (within the meaning of section 2 of the Local Government Act 2001) of Cork, Dublin, Galway, Limerick or Waterford;

‘ State authority ’ means the Garda Síochána, the Defence Forces, the Health Service Executive (in so far as it relates to the ambulance service), the Revenue Commissioners (in so far as it relates to the Customs service), a fire authority or such other body as may be prescribed by order of the Minister under section 531P(1);

‘ urban area ’ means an area or areas designated by order of the Minister under section 531P(1);

‘ year of assessment ’ means a calendar year.

Urban areas to which parking levy applies and making of orders by the Minister.

531P.— (1) The Minister may, following consultation with any other Minister of the Government as he or she considers appropriate in the circumstances, by order—

• (a) designate that an area or areas which is or are within the administrative area (within the meaning of section 2 of the Local Government Act 2001) of a relevant local authority shall be an urban area for the purposes of this Part,

• (b) prescribe that a body shall be a State authority for the purposes of this Part, and

• (c) provide for the date from which this Part shall have effect.

• (2) Every order made by the Minister under subsection (1) shall be laid before Dáil Éireann as soon as may be after it is made and, if a resolution annulling the order is passed by Dáil Éireann within the next 21 days on which Dáil Éireann has sat after the order is laid before it, the order shall be annulled accordingly, but without prejudice to the validity of anything previously done thereunder.

Entitlement to use a parking space.

531Q.— (1) An employee shall be regarded as having an entitlement to use a parking space for the purposes of this Part where any one or more of the following circumstances apply:

- (*a*) the employee holds or has been issued with an authorisation in the form of a badge, permit, sticker or any other form of authorisation to use a parking space or is otherwise given permission (including oral permission) to use a parking space;

- (*b*) the employee holds or has been issued with any form or means of access to a parking space;

- (*c*) the employee has been allocated a dedicated parking space;

- (*d*) the employee has been allocated a parking space on a shared basis or other similar arrangement;

- (*e*) the availability of a parking space to the employee is on the basis of a system commonly known as on a first-come — first-served basis.

• (2)

  • (a) An employee shall not be regarded as having an entitlement to use a parking space for the purposes of this Part where the use of the space by the employee arises as a result of authorisation, permission or access occasionally given to the employee and the total number of days—

    • (i) covered by such authorisation, permission or access, and

    • (ii) of actual use of the space by the employee,

    is not more than 10 days in a year of assessment.

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

    • (i) authorisation, permission or access given for part of a day shall be regarded as given for a full day, and

    • (ii) use of a parking space for part of a day shall be regarded as use of the space for a full day.

• (3) An employee shall cease to be regarded as having an entitlement to use a parking space for the purposes of this Part where—

  • (a) (i) he or she disclaims, in writing or in an electronic format, entitlement to use a parking space, as referred to in subsection (1), or

    • (ii) the entitlement to use a parking space lapses or such entitlement is withdrawn,

  • (b) if relevant, the employee returns to the employer, or to the person who provides the parking space as appropriate, either or both the form of authorisation and the form or means of access which he or she holds or which was issued to him or her, and

  • (c) the employee ceases to use a parking space provided directly or indirectly by his or her employer.

• (4) For the purposes of subsection (1)(a), permission to use a parking space shall be regarded as given to an employee where an employer enters into an arrangement or agreement with the employee or any other person whereby a parking space is provided for the use of the employee.

Provision of parking space by employer.

531R.— For the purposes of this Part, a parking space shall be regarded as provided directly or indirectly by an employer for the use of an employee where—

- (*a*) the employer provides the parking space on, at or in any premises which is owned or occupied by the employer,

- (*b*) the parking space is provided on, at or in any premises which is owned or occupied by a person connected (within the meaning of section 10) with the employer,

- (*c*) the employer enters into an arrangement or agreement with an employee or any other person whereby a parking space is provided for the use of that employee or any other employee of the employer, or

- (*d*) in the case of a public sector employee to whom paragraph (*a*), (*b*) or (*c*) does not apply, the person who provides the parking space to that employee is funded or part funded directly or indirectly by the employer of that employee.

  Exemption for certain persons.

  531S.— The parking levy provided for under this Part shall not apply—

- (*a*) to an employee who is the holder of a valid disabled person’s parking permit,

- (*b*) to the use of a parking space by an employee of a State or civil emergency service where the use of that space relates solely to a response, required of the employee by the employer, to an emergency situation, or

- (*c*) to occasional use of a parking space by a retired person where that person’s former employer or, where section 531R(*d*) applies, the person who provided the parking space to the retired person before he or she retired, continues to make a parking space available to him or her.

  Charge to parking levy.

  531T.— Subject to section 531S, where—

- (*a*) an employee has an entitlement to use a parking space in an urban area for the parking of a car, and

- (*b*) such space is provided directly or indirectly by his or her employer,

  then a tax to be known as ‘parking levy’ shall be charged, levied and paid in accordance with this Part in relation to such entitlement.

  Rate of charge to parking levy.

  531U.— (1) Subject to the subsequent provisions of this section, the amount of the parking levy in relation to each employee—

- (*a*) shall be €200 in relation to each year of assessment, or

- (*b*) in relation to the year of assessment in which this Part takes effect, shall be €200 reduced to an amount which bears the same proportion to €200 as the period consisting of the part of that year in which this Part has effect bears to the full year of assessment.

• (2) Where an employee has been allocated a parking space on a shared basis, or other similar arrangement including on a first-come — first-served basis as referred to in section 531Q(1)(e), the amount of the parking levy shall—

  • (a) where the ratio of employees sharing a parking space to a space is less than two to one, be the appropriate amount referred to in subsection (1), and

  • (b) where the ratio of employees sharing a parking space to a space is two to one or more than two to one, be reduced to 50 per cent of the appropriate amount referred to in subsection (1).

• (3) Where the normal pattern of work required of an employee involves the employee working only a portion of the full working week or year, then the amount of the parking levy determined in accordance with subsection (1) or (2) shall be reduced to an amount which bears the same proportion to the amount so determined as the portion of the full working week or year required to be worked by the employee bears to the full working week or year, subject to the amount of the levy being not less than 50 per cent of the amount determined in accordance with subsection (1) or (2) as the case may be.

• (4) Where an employee’s entitlement to use a parking space applies for part of a year of assessment or part of the period referred to in subsection (1)(b), then the amount of the parking levy determined in accordance with subsection (1), (2) or (3), as the case may be, shall be reduced to an amount which bears the same proportion to the amount so determined as the part of the year or period during which the employee has such entitlement bears to the full period or year.

• (5) An employee’s entitlement to use a parking space for the period during which the employee is on maternity leave and for a period of 10 weeks immediately prior to the date the employee commences such leave shall be disregarded for the purposes of subsection (4).

• (6) Where the pattern of work required of an employee involves starting or finishing work after 9 o’clock in the evening or before 7 o’clock in the morning, that part of a year of assessment or that part of the period referred to in subsection (1)(b) in which such pattern of work applies shall be disregarded for the purposes of subsection (4).

Deduction of levy by employer.

531V.— (1) Where section 531T applies, an employer shall—

- (*a*) deduct the amount of the parking levy, determined in accordance with section 531U, from the employee’s net emoluments for the period during which he or she has an entitlement to use a parking space and such deduction shall be made at a time and frequency which corresponds with the payment of the employee’s emoluments,

- (*b*) be accountable for the amount of the parking levy deductible, and liable to pay that amount to the Revenue Commissioners as if it were an amount of income tax deductible in accordance with the PAYE Regulations, and

- (*c*) remit to the Collector-General the total of all amounts of parking levy which the employer was liable to deduct from employees and such remittance shall be made at the same time and in the same manner as the employer is required under Regulation 28 or, as the case may be, under Regulation 29 of the PAYE Regulations to remit amounts of tax which the employer was liable to deduct from emoluments paid to employees.

• (2) Where an amount of parking levy is, in accordance with this Part, deducted by an employer from the net emoluments of an employee—

  • (a) the employee shall allow such deduction on the receipt of the residue of the net emoluments, and

  • (b) the employer shall be acquitted and discharged of such amount as is represented by the deduction, as if the amount had actually been paid.

  No relief for any payment in relation to parking levy.

  531W.— Notwithstanding any provision of the Tax Acts, no sum shall—

  • (a) in the case of an employee, be allowed to the employee in relation to a parking levy payable under this Part—

    • (i) as a deduction under section 114, or

    • (ii) as a credit against any liability arising under the Tax Acts,

    or

  • (b) in the case of an employer—

    • (i) be deducted in computing the amount of profits or gains chargeable to tax under Schedule D, or

    • (ii) be included in computing any expenses of management in respect of which a deduction may be claimed under section 83 or 707,

    in relation to any amount which is paid by the employer to an employee in compensation for, or in re-imbursement of, the payment of a parking levy under this Part.

    Records and regulations.

    531X.— (1) Subject to subsection (2), where a parking space in an urban area to which this Part applies is provided directly or indirectly by an employer for the use of one or more employees for the parking of a car, the employer shall in respect of each year of assessment and the period referred to in section 531U(1)(b) keep in a permanent form a full and true record of the following:

  • (a) details of the locations at which each such parking space is provided,

  • (b) the name and personal public service number of each employee who has an entitlement to use a parking space,

  • (c) where section 531Q(3) applies, the name and personal public service number of each employee who ceased to have an entitlement to use a parking space and the date from which the entitlement ceased,

  • (d) where section 531S(a) applies, the name and personal public service number of each employee to which that section applies, and

  • (e) such other records specified in regulations by the Revenue Commissioners as may reasonably be required by them for the purposes of this Part.

• (2) Where a parking space in an urban area to which this Part applies is provided by a person referred to in section 531R(d) for the use of one or more public sector employees for the parking of a car, that person shall in respect of each year of assessment and the period referred to in section 531U(1)(b)—

  • (a) keep in a permanent form a full and true record of the information referred to in paragraphs (a) to (e) of subsection (1), and

  • (b) (i) transmit in sufficient time to the employer of such employee or employees, such details as are necessary for the employer to comply with the requirements of section 531V(1), and

    • (ii) make a record of the details so transmitted.

• (3) The Revenue Commissioners may make regulations for the purposes of the administration and implementation of this Part and without prejudice to the generality of the foregoing, such regulations may include provision in relation to such records as are referred to in subsection (1)(e) and such matters as are referred to in subsection (2)(b).

• (4) For the purposes of this Part, the definition of ‘records’ in section 903 shall be treated as including the records referred to in subsections (1) and (2) and the provisions of section 903 shall accordingly apply to such records.

Payment, collection and recovery.

531Y.— (1) The parking levy provided for under this Part is placed under the care and management of the Revenue Commissioners and section 849 shall apply as if ‘parking levy’ were included in the definition of ‘tax’ in that section.

• (2) The provisions of Chapter 4 of Part 42 and Part 5 of the PAYE Regulations shall, with any necessary modifications, apply to the payment, collection and recovery of the parking levy as they apply to the payment, collection and recovery of income tax in accordance with the said Part 42 and those Regulations and without prejudice to the generality of the foregoing—

  • (a) the definition of ‘the regulations’ in section 989 applies as if it included a reference to the provisions of this Part, and

  • (b) sections 989, 990, 991 and 991A apply as if the respective references to income tax or tax in those sections included a reference to the parking levy payable under this Part.

• (3) In any case of underpayment or overpayment of the parking levy to the Collector-General by an employer, payment of the amount not paid or repayment of the amount overpaid, as the case may be, shall be made to or by the Collector-General, as appropriate.

• (4) In the case of an employer to whom section 531V(1) applies, the employer shall include the following details on the form which is required to be sent to the Collector-General under Regulation 31 of the PAYE Regulations:

  • (a) the total number of employees to whom the parking levy applied in the year of assessment, and

  • (b) the total amount of parking levy deducted by the employer from employees in the year of assessment.

  Penalties.

  531Z.— (1) Where an employer fails to—

  • (a) deduct or remit the parking levy in accordance with section 531V(1),

  • (b) keep records in accordance with section 531X(1), or

  • (c) include the details referred to in paragraphs (a) and (b) of section 531Y(4) on the form which is required to be sent to the Collector-General under Regulation 31 of the PAYE Regulations,

  that person shall be liable to a penalty of €3,000.

• (2) Where a person to whom section 531X(2) applies fails to—

  • (a) keep records in accordance with paragraphs (a) and (b)(ii) of that section, or

  • (b) provide details to an employer in accordance with paragraph (b)(i) of that section,

  that person shall be liable to a penalty of €3,000.

• (3) Subsections (3) and (4) of section 987 apply to the penalties provided for in subsections (1) and (2) of this section as they apply to the penalties provided for in section 987.”,

• (b) in section 1002, in the definition of “the Acts”, by inserting the following after paragraph (vii):

• “(viii) Part 18B,”,

• (c) in section 1006, in the definition of “the Acts”, by inserting the following after paragraph (e):

• “(f) Part 18B,”,

• (d) in section 1006A, in the definition of “Acts”, by inserting the following after paragraph (h):

• “(i) Part 18B,”,

and

• (e) in section 1078, in the definition of “the Acts”, by inserting the following after paragraph (h):

• “(i) Part 18B,”.

• (2) The Provisional Collection of Taxes Act 1927 is amended in the definition of “tax” in section 1 by inserting “and parking levy” after “stamp duties”.

Chapter 3 Income Tax

4. Amendment of section 15 (rate of charge) of Principal Act.

4.— As respects the year of assessment 2009 and subsequent years of assessment, section 15 of the Principal Act is amended—

• (a) by substituting “€27,400” for “€26,400” (inserted by the Finance Act 2008) in subsection (3), and

• (b) by substituting the following Table for the Table (as so inserted) to that section:

“TABLE

PART 1

Part of taxable income	Rate of tax	Description of rate
(1)	(2)	(3)
The first €36,400	20 per cent	the standard rate
The remainder	41 per cent	the higher rate

PART 2

Part of taxable income	Rate of tax	Description of rate
(1)	(2)	(3)
The first €40,400	20 per cent	the standard rate
The remainder	41 per cent	the higher rate

PART 3

Part of taxable income	Rate of tax	Description of rate
(1)	(2)	(3)
The first €45,400	20 per cent	the standard rate
The remainder	41 per cent	the higher rate

”.

5. Amendment of section 122 (preferential loan arrangements) of Principal Act.

5.— As respects the year of assessment 2009 and subsequent years of assessment, section 122 of the Principal Act is amended in the definition of the “ specified rate ” in subsection (1)(a)—

• (a) by substituting “5 per cent” for “5.5 per cent” (inserted by the Finance Act 2008) in both places where it occurs, and

• (b) by substituting “12.5 per cent” for “13 per cent” (inserted by the Finance Act 2008).

6. Benefit-in-kind: emission based calculations.

6.— (1) Section 121 of the Principal Act is amended—

• (a) in subsection (1) in the definition of “business mileage for a year of assessment” by substituting “whole kilometres” for “whole miles”,

• (b) in subsection (3)—

• (i) by deleting paragraph (c) for the year of assessment 2009 and subsequent years,

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

• “(d) This subsection is subject to subsection (4B) for years of assessment 2009 and subsequent years.”,

• (c) in subsection (4)—

• (i) in paragraph (a) by substituting “24,000 kilometres” for “15,000 miles”,

• (ii) in paragraph (c)(i)—

• (I) by substituting “24,000” for “15,000” in each place where it occurs, and

• (II) by substituting the following for the Table to that subsection—

“TABLE

Business mileage lower limit	Business mileage upper limit	Percentage of original market value
(1)	(2)	(3)
kilometres	kilometres	per cent
24,000	32,000	24
32,000	40,000	18
40,000	48,000	12
48,000	—	6

”,

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

• “(d) This subsection is subject to subsection (4B) for years of assessment 2009 and subsequent years.”,

• (d) by deleting subsection (4A) for the year of assessment 2009 and subsequent years,

• (e) by inserting the following after subsection (4A):

• “(4B)

  • (a) Where a new car is provided for the first time for the year of assessment 2009 or any subsequent year, the cash equivalent of the benefit shall be an amount determined by the formula:

  Original market value × A

  where—

  A is a percentage, based on vehicle categories and business mileage, determined in accordance with column (3), (4) or (5), as the case may be, of Table A to this subsection.

  • (b) In Table A to this subsection, any percentage shown in column (3), (4) or (5), as the case may be, shall be the percentage applicable to any business mileage for a year of assessment which—

    • (i) exceeds the lower limit (if any) shown in column (1), and

    • (ii) does not exceed the upper limit (if any) shown in column (2),

    opposite the mention of that percentage in column (3), (4) or (5), as the case may be.

  • (c) Any reference in this section to a vehicle in any of the vehicle Categories A to G as set out in the first column of Table B to this subsection is a reference to a vehicle whose CO 2 emissions, confirmed by reference to the relevant EC type approval certificate or EC certificate of conformity, are set out in the corresponding entry in the second column of Table B to this subsection.

  TABLE A

  Business mileage	Business mileage	Vehicle Categories	Vehicle Categories	Vehicle Categories
  lower limit	upper limit	A, B and C	D and E	F and G
  (1)	(2)	(3)	(4)	(5)
  kilometres	kilometres	per cent	per cent	per cent
  —	24,000	30	35	40
  24,000	32,000	24	28	32
  32,000	40,000	18	21	24
  40,000	48,000	12	14	16
  48,000	—	6	7	8

  TABLE B

  Vehicle Category	CO 2 Emissions (CO 2 g/km)
  (1)	(2)
  A	0g/km up to and including 120g/km
  B	More than 120g/km up to and including 140g/km
  C	More than 140g/km up to and including 155g/km
  D	More than 155g/km up to and including 170g/km
  E	More than 170g/km up to and including 190g/km
  F	More than 190g/km up to and including 225g/km
  G	More than 225g/km.

  ”,

• (f) in subsection (5)—

• (i) in subparagraph (ii) by substituting “8,000 kilometres” for “5,000 miles”, and

• (ii) by deleting subparagraph (aa) for the year of assessment 2009 and subsequent years,

and

• (g) in subsection (6)—

• (i) in paragraph (b) by substituting “by deducting 8,000 from the total number of kilometres travelled” for “by deducting 5,000 from the total number of miles travelled”, and

• (ii) by deleting paragraph (bb) for the year of assessment 2009 and subsequent years.

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

7. Benefit-in-kind charge: relief for bicycles.

7.— (1) Chapter 3 of Part 5 of the Principal Act is amended—

• (a) in section 118 by inserting the following after subsection (5F):

• “(5G)

  • (a) Subject to paragraph (c) of this subsection, subsection (1) shall not apply to expense of up to €1,000 incurred by the body corporate in, or in connection with, the provision for a director or employee of a bicycle or bicycle safety equipment, where—

    • (i) the bicycle and bicycle safety equipment provided is unused and not second-hand,

    • (ii) the director or employee uses the bicycle or bicycle safety equipment, or the bicycle and the bicycle safety equipment, as the case may be, mainly for qualifying journeys, and

    • (iii) bicycles or bicycle safety equipment, or bicycles and bicycle safety equipment, as the case may be, are made available generally to directors and employees of the body corporate.

  • (b) In this subsection—

  ‘ bicycle ’ means a pedal cycle;

  ‘ bicycle safety equipment ’ includes—

  - (i) bicycle bells and bulb horns,
  
  - (ii) bicycle helmets that conform to European product safety standard CEN/EN 1078,
  
  - (iii) bicycle lights, including dynamo packs,
  
  - (iv) bicycle reflectors and reflective clothing, and
  
  - (v) such other safety equipment as the Revenue Commissioners may allow;
  
    ‘ normal place of work ’ means the place where the director or employee normally performs the duties of his or her office or employment;
  
    ‘ pedal cycle ’ means—
  
  - (i) a bicycle or tricycle which is intended or adapted for propulsion solely by the physical exertions of a person or persons seated thereon, or
  
  - (ii) a pedelec,
  
    but does not include a moped or a scooter;
  
    ‘ pedelec ’ means a bicycle or tricycle which is equipped with an auxiliary electric motor having a maximum continuous rated power of 0.25 kilowatts, of which output is progressively reduced and finally cut off as the vehicle reaches a speed of 25 kilometres per hour, or sooner if the cyclist stops pedalling;
  
    ‘ qualifying journey ’, in relation to a director or employee, means the whole or part of a journey—
  
  - (i) between the director’s or employee’s home and normal place of work, or
  
  - (ii) between the director’s or employee’s normal place of work and another place of work, where the director or employee is travelling in the performance of the duties of his or her office or employment.
  

  • (c) A director or employee shall not, by virtue of this subsection, be relieved from a charge to income tax under subsection (1) more than once in any period of 5 consecutive years of assessment, commencing with the year of assessment in which the director or employee concerned is first provided with a bicycle or bicycle safety equipment.”,

• (b) in section 118B—

• (i) in subsection (1) in the definition of “ salary sacrifice agreement ” by substituting “‘salary sacrifice arrangement’ ” for “salary sacrifice agreement”,

• (ii) in subsection (2)—

• (I) in paragraph (a)(i) by deleting “and” and in paragraph (a)(ii) by substituting “section 510(4), and” for “section 510(4),”, and

• (II) by inserting the following after paragraph (a)(ii):

• “(iii) a bicycle or bicycle safety equipment provided to a director or employee and which is exempt from a charge to tax by virtue of section 118(5G),”,

and

• (iii) in subsection (5) by substituting “salary sacrifice arrangement” for “salary sacrifice agreement”.

• (2) This section applies in respect of expense incurred on or after 1 January 2009.

8. Amendment of section 469 (relief for health expenses) of Principal Act.

8.— As respects the year of assessment 2009 and subsequent years of assessment, section 469 of the Principal Act is amended—

• (a) in subsection (1)—

• (i) by inserting the following definition before the definition of “ educational psychologist ”:

“ ‘ appropriate percentage ’, in relation to a year of assessment, means a percentage equal to the standard rate of tax for that year;”,

and

• (ii) by inserting the following definition before the definition of “ speech and language therapist ”:

“ ‘ specified amount ’, in relation to a year of assessment, means the amount of expenditure which qualifies for income tax relief in accordance with this section;”,

and

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

• “(2) Subject to this section, where an individual for a year of assessment proves that in the year of assessment he or she defrayed health expenses incurred for the provision of health care, the income tax to be charged on the individual, other than in accordance with section 16(2) for that year of assessment shall be reduced by the lesser of—

  • (a) the amount equal to the appropriate percentage of the specified amount, and

  • (b) the amount which reduces that income tax to nil,

  but, where an individual proves that he or she defrayed health expenses incurred for the provision of health care in the nature of maintenance or treatment in a nursing home, the individual shall be entitled for the purpose of ascertaining the amount of the income on which he or she is to be charged to income tax, to have a deduction made from his or her total income of the amount proved to have been so defrayed.”.

9. Employee share schemes: withdrawal of approval.

9.— (1) The Principal Act is amended—

• (a) in paragraph 5(1) of Schedule 11—

• (i) by deleting “or” where it occurs immediately before clause (d) and by substituting “paragraph 4, or” for “paragraph 4,” in clause (d), and

• (ii) by inserting the following after clause (d):

• “(e) where a person fails to provide information requested by the Revenue Commissioners under section 510(7) or information which is required to be delivered under section 510(8),”,

and

• (b) in paragraph 3(1) of Schedule 12—

• (i) by deleting “or” in clause (a) and by inserting “or” at the end of clause (b), and

• (ii) by inserting the following after clause (b):

• “(c) where a person fails to provide information requested by the Revenue Commissioners under paragraph 3(4) or information which is required to be delivered under paragraph 3(5),”.

• (2) Subsection (1) applies as on and from the date of passing of this Act.

10. Amendment of section 128 (tax treatment of directors of companies and employees granted rights to acquire shares or other assets) of Principal Act.

10.— (1) Section 128 of the Principal Act is amended—

• (a) by substituting the following for subsection (6):

• “(6)

  • (a) Subject to subsection (7), a person shall, in the case of a right granted by reason of the person’s office or employment, be chargeable to tax under this section in respect of a gain realised by another person—

    • (i) if the right was granted to that other person,

    • (ii) if the other person acquired the right otherwise than by or under an assignment made by means of a bargain at arm’s length,

    • (iii) if the 2 persons are connected persons at the time when the gain is realised, or

    • (iv) if the person benefits directly or indirectly from the exercise, assignment or release of the right by the other person;

    but in a case within subparagraphs (ii), (iii), or (iv), the gain realised shall be treated as reduced by the amount of any gain realised by a previous holder on an assignment of the right.

  • (b) For the purposes of this subsection, a gain realised by another person shall include a gain realised on the exercise of a right by the person in respect of whose office or employment the right was granted, where that person exercises the right as nominee or bare trustee of the other person, or otherwise on behalf of the other person.”,

• (b) in subsection (7) by substituting “subparagraph (ii) or (iii) of subsection (6)(a)” for “subsection (6)(b)”, and

• (c) by substituting the following for subsection (8):

• “(8)

  • (a) Where a right (referred to in this subsection as the ‘original right’) is assigned or released and the whole or part of the consideration for the assignment or release consists of or comprises another right (referred to in this subsection as the ‘new right’) the new right shall not be treated as consideration for the assignment or release; but this section shall apply in relation to the new right as it applies in relation to the original right and as if the consideration for its acquisition did not include the value of the original right but did include the amount or value of the consideration given for the grant of the original right in so far as that has not been offset by any valuable consideration for the assignment or release other than the consideration consisting of the new right.

  • (b) The operation of paragraph (a) shall not prevent a charge arising under this section on a gain realised by the exercise of the original right.”.

• (2) This section applies as on and from 20 November 2008.

11. Amendment of schedule 29 (provisions referred to in sections 1052, 1053 and 1054) to Principal Act.

11.— Schedule 29 to the Principal Act is amended in column 3—

• (a) by inserting the following before “section 238(3)”:

“section 128C(15)

section 128D(8)

section128E(9)”,

and

• (b) by inserting the following before “section 904”:

“section 896A”.

12. Amendment of Chapter 5 (miscellaneous charging provisions) of Part 5 of Principal Act.

12.— (1) Chapter 5 of Part 5 of the Principal Act is amended by inserting the following after section 128C:

“Tax treatment of directors of companies and employees who acquire restricted shares.

128D.— (1) In this section—

‘ director ’ and ‘ employee ’ have the meanings, respectively, given to them by section 770(1);

‘ employer ’ means the company in which the director or employee holds his or her office or employment;

‘ market value ’ shall be construed in accordance with section 548;

‘ restricted shares ’ shall be construed in accordance with subsection (3);

‘ shares ’ includes stock;

‘ specified period ’ has the same meaning as in subsection (3)(a).

• (2) Subject to subsection (7), this section applies where—

  • (a) a director or employee acquires shares (including shares acquired on the exercise of a right to which section 128 applies) in a company as a director or employee of that company or of another company,

  • (b) the shares are shares in the company in which the director or employee holds his or her office or employment or in a company which has control (within the meaning of section 432) of that company, and

  • (c) at the time of acquisition, the shares are restricted shares.

• (3) For the purposes of this section, shares are restricted shares if—

  • (a) there is a written contract or agreement in place under the terms of which there is a restriction on the freedom of the director or employee by whom the shares are held to assign, charge, pledge as security for a loan or other debt, transfer, or otherwise dispose of the shares for a period of not less than one year (in this section referred to as the ‘ specified period ’),

  • (b) the contract or agreement is in place for bona fide commercial purposes and does not form part of a scheme or arrangement of which the main purpose or one of the main purposes is the avoidance of tax,

  • (c) the shares cannot be assigned, charged, pledged as security for a loan or other debt, transferred, or otherwise disposed of in any circumstances during the specified period, other than—

    • (i) on the death of the director or employee, or

    • (ii) as a consequence of the director or employee agreeing to—

      • (I) accept an offer for the shares (in this clause referred to as the ‘original shares’) if the acceptance or agreement would result in a new holding (within the meaning of section 584) being equated with the original shares for the purposes of capital gains tax,

      • (II) a transaction affecting the shares or such of the shares as are of a particular class if the transaction would be entered into pursuant to a compromise, arrangement or scheme applicable to or affecting all the ordinary share capital of the company in question or, as the case may be, all the shares of the same class as the shares acquired by the director or employee, or

      • (III) accept an offer of cash, with or without other assets, for the shares if the offer forms part of a general offer made to holders of shares of the same class as the shares acquired by the director or employee or of shares in the same company and made in the first instance on a condition such that if it is satisfied the person making the offer will have control (within the meaning of section 432) of that company,

      and

  • (d) during the specified period, the shares are held in a trust established by the employer for the benefit of employees and directors, or held under such other arrangements as the Revenue Commissioners may allow.

• (4) Where this section applies—

  • (a) any charge to income tax under Schedule E (and computed in accordance with section 112 or 128, as the case may be), or under Schedule D, on the acquisition of the shares, shall be reduced by an amount determined by the formula—

  A x B

  A x 100

  where—

  Ais the amount of the income tax charge under Schedule E or Schedule D, as the case may be, and

  B is—

  - (i) where the specified period is one year, 10,
  
  - (ii) where the specified period is 2 years, 20,
  
  - (iii) where the specified period is 3 years, 30,
  
  - (iv) where the specified period is 4 years, 40,
  
  - (v) where the specified period is 5 years, 50,
  
  - (vi) where the specified period is more than 5 years, 60,
  

  • (b) the charge to income tax referred to in paragraph (a) shall be computed by reference to the market value of the shares at the date of acquisition but without regard to the restriction on the freedom of the director or employee by whom the shares are held to assign, charge, pledge as security for a loan or other debt, transfer, or otherwise dispose of the shares.

• (5) Where a charge to income tax under Schedule E or Schedule D on the acquisition of shares by a director or employee is reduced in accordance with subsection (4), and—

  • (a) the restriction on the freedom of the director or employee to assign, charge, pledge as security for a loan or other debt, transfer, or otherwise dispose of the shares acquired by him or her is subsequently removed or varied, or

  • (b) the shares are disposed of in any of the circumstances mentioned in subparagraphs (i) and (ii) of subsection (3)(c) before the specified period expires,

  then, notwithstanding any limitation in the Income Taxes Acts on the time within which assessments may be made, the income tax charge on the acquisition of the shares shall be adjusted to take account of the actual period during which there was a restriction on the freedom of the director or employee to assign, charge, pledge as security for a loan or other debt, transfer or otherwise dispose of the shares. The adjustment of liability to tax as may be necessary for the purposes of this subsection shall be made at any time, whether by means of an assessment, an additional assessment or otherwise.

• (6) Where this section applies and a charge to income tax on the acquisition of shares by a director or employee is, for the purposes of section 552, to be treated as forming part of the consideration given by the director or employee for the acquisition of the shares, then the amount of the income tax charge to be so treated shall be the amount as reduced in accordance with subsection (4), together with any additional amount charged as a consequence of an adjustment made in accordance with subsection (5).

• (7) This section does not apply to shares acquired by a director or employee under the terms of a scheme approved of by the Revenue Commissioners under Schedule 11, 12, 12A or 12C.

• (8) Where in any year—

  • (a) a person awards restricted shares to a director or employee, or

  • (b) an event that comes within paragraph (a) or (b) of subsection (5) occurs in relation to restricted shares awarded,

  then the person shall deliver to the Revenue Commissioners on or before 31 March in the year of assessment following the year in which the award was made or the event occurred, as the case may be, particulars of the award or the event, as the case may be.

• (9) For the purposes of subsection (8), a person shall be deemed to award restricted shares to a director or employee where the director or employee acquires the restricted shares on the exercise of a right to which section 128 applies, and the right was granted to the director or employee by the person.

Tax treatment of directors of companies and employees who acquire forfeitable shares.

128E.— (1) In this section—

‘ director ’ and ‘ employee ’ have the meanings, respectively, given to them by section 770(1);

‘ market value ’ shall be construed in accordance with section 548;

‘ forfeitable shares ’ shall be construed in accordance with subsection (3);

‘ shares ’ includes stock.

• (2) This section applies where—

  • (a) a director or employee acquires shares (including shares acquired on the exercise of a right to which section 128 applies) in a company as a director or employee of that company or of another company, and

  • (b) at the time of acquisition, the shares are forfeitable shares.

• (3) Subject to subsection (4), for the purposes of this section, shares are forfeitable shares if—

  • (a) there is a written contract or agreement in place under the terms of which—

    • (i) there will be a forfeiture of the shares, if certain circumstances arise or do not arise,

    • (ii) as a result of the forfeiture, the director or employee will cease to have any beneficial interest in the shares, and

    • (iii) the director or employee will not be entitled to receive, directly or indirectly, consideration in money or money’s worth in respect of the shares on their forfeiture in excess of the consideration given by the director or the employee for the acquisition of the shares,

    and,

  • (b) the contract or agreement is in place for bona fide commercial purposes and does not form part of a scheme or arrangement of which the main purpose or one of the main purposes is the avoidance of tax.

• (4) Shares shall not be forfeitable shares by reason only that the shares are unpaid or partly paid shares which may be forfeited for non-payment of calls.

• (5) Where this section applies, any charge to income tax under Schedule E (and computed in accordance with section 112 or 128, as the case may be), or under Schedule D, on the acquisition of the shares, shall be computed by reference to the market value of the shares at the date of acquisition but without regard to provision in a contract or agreement referred to in subsection (3) for the forfeiture of the shares.

• (6) If under the terms of a contract or agreement referred to in subsection (3) the shares are forfeited, then—

  • (a) the director or employee shall, for income tax purposes, be treated, for the year of assessment in which the shares were acquired, as if he or she did not acquire the shares, and

  • (b) such adjustment shall be made by repayment or otherwise as the case may require, on receipt of a claim from the director or employee, which shall be made within 4 years from the end of the year of assessment in which the shares are forfeited.

• (7) Subsection (6) applies notwithstanding any limitation in section 865(4) on the time within which a claim for a repayment of tax is required to be made. Section 865(6) does not prevent the Revenue Commissioners from repaying an amount of tax as a consequence of any adjustment made in accordance with subsection (6).

• (8) Notwithstanding section 546(2), where subsection (6) of this section applies, the amount of a loss accruing on the forfeiture of the shares shall not exceed the amount of consideration given by the director or employee for the acquisition of the shares less any amount received by the director or employee on the forfeiture of the shares.

• (9) Where in any year—

  • (a) a person awards forfeitable shares to a director or employee, or

  • (b) shares awarded to a director or employee are forfeited,

  then the person shall deliver to the Revenue Commissioners on or before 31 March in the year of assessment following the year in which the award was made or the shares were forfeited, as the case may be, particulars of the award or the forfeiture, as the case may be.”.

• (2) This section applies as on and from 20 November 2008 in respect of shares acquired on or after that date.

13. Repayment of tax where earnings not remitted.

13.— (1) The Principal Act is amended by inserting the following after section 825A: