Finance Act 2008

Type Act

Publication 2008-03-13

State In force

Source Irish Statute Book

articles 144

(5) To the extent that any actual or assumed transfer in accordance with the Reinsurance Regulations of any amount into an equalisation reserve is attributable to arrangements entered into wholly or mainly for tax purposes—

(a) subsection (2) shall not apply to that transfer, and

(b) the making of that transfer shall be disregarded in determining, for the purposes of the Tax Acts, whether and to what extent there is subsequently any requirement to make a transfer into or out of the reserve in accordance with the Reinsurance Regulations,

and this subsection applies irrespective of whether the insurance company in question is a party to the arrangements.

(6) For the purposes of this section, the transfer of an amount into an equalisation reserve is attributable to arrangements entered into wholly or mainly for tax purposes to the extent that the arrangements to which it is attributable are arrangements—

(a) the sole or main purpose of which is, or

(b) the sole or main benefit accruing from which might, apart from subsection (7), be expected to be,

the reduction by virtue of this section of any liability to tax.

(7) Where—

(a) any transfer made into or out of an equalisation reserve maintained by an insurance company is made in accordance with the Reinsurance Regulations in respect of business carried on by that company over a period (in this subsection referred to as the ‘equalisation period’), and

(b) parts of the equalisation period are in different accounting periods,

then the amount transferred shall be apportioned for the purposes of this section between the different accounting periods in the proportions that correspond to the number of days in the equalisation period that are included in each of those accounting periods.”.

(2) This section is deemed to have effect as and from 15 July 2006.

38. Amendment of section 730D (gain arising on a chargeable event) of Principal Act.

38.— (1) Section 730D of the Principal Act is amended in subsection (2A)(b)—

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

“(i) (I) (A) the assurance company which commenced the life policy has established a branch in an offshore state, and

(B) the commitment represented by that life policy is covered by that branch,

(II) (A) the assurance company which commenced the life policy underwrites the business from the State on a freedom of services basis under Regulation 50 of the European Communities (Life Assurance) Framework Regulations 1994 (S.I. No. 360 of 1994) or other equivalent arrangement in an EEA state, and

(B) the policyholder resides in an offshore state,

and”,

and

(b) by deleting subparagraph (ii).

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

39. Amendment of Chapter 1A (investment undertakings) of Part 27 of Principal Act.

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

(a) in section 739B(1) in paragraph (ccc) of the definition of “ chargeable event ” by inserting “where such ending is not otherwise a chargeable event within the meaning of this section,” after “of a relevant period,”,

(b) in section 739D—

(i) in subsection (2)—

(I) in paragraph (dd) by inserting “except as a consequence of a gain arising on a chargeable event within the meaning of paragraph (ccc) in section 739B(1),” after “entitlement to a unit,”, and

(II) by substituting the following for paragraph (ddd):

“(ddd) where the chargeable event is the ending of a relevant period in relation to a unit of a unit holder—

(i) the excess (if any) of the value of the unit, without having regard to any amount of appropriate tax (within the meaning of section 739E) thereby arising, held by the unit holder on the day of that ending over the total amount invested in the investment undertaking by the unit holder for the acquisition of the unit, and where the unit was otherwise acquired by the unit holder, the amount so invested to acquire that unit shall be the value of the unit at the time of its acquisition by the unit holder, or

(ii) in a case where the investment undertaking has made an election under subsection (5B), the amount determined under that subsection, and”,

(ii) in subsection (2A) by substituting the following for paragraph (a):

“(a) a chargeable event occurs in relation to an investment undertaking in respect of a unit holder, and”,

(iii) in subsection (3), in the construction of C, by substituting “before the chargeable event, reduced by any amount of first tax (within the meaning of section 739E (1A)(a)),” for “before the chargeable event”,

(iv) in subsection (4), in the construction of C, by substituting “before the chargeable event, reduced by any amount of first tax (within the meaning of section 739E (1A)(a)),” for “before the chargeable event”, and

(v) by inserting the following after subsection (5A):

“(5B) (a) The election referred to in paragraph (ddd) of subsection (2) is an irrevocable election made by an investment undertaking in respect of all its unit holders at the time of the election or at any other time and the amount is as determined by the formula—

A1 — A2

where—

A1 is the value of the unit at the later of 30 June or 31 December prior to the date of the chargeable event,

and

A2 is—

(i) the total amount invested in the investment undertaking by the unit holder for the acquisition of the unit, and where the unit was otherwise acquired by the unit holder, the amount so invested to acquire that unit shall be the value of the unit at the time of its acquisition by the unit holder, or

(ii) if a chargeable event to which paragraph (ccc) of section 739B(1) refers has previously occurred, the value of the unit at the later of 30 June or 31 December prior to the date of the latest of such chargeable events.

(b) On the first occasion that the investment undertaking is required to compute a gain on the happening of a chargeable event within the meaning of paragraph (ccc) in section 739B(1) in respect of a unit holder, and—

(i) the gain is computed in accordance with paragraph (a), the investment undertaking will be deemed to have made the election specified in that paragraph, or

(ii) the gain is not computed in accordance with paragraph (a), an election under paragraph (a) shall not be made.”,

(i) in subsection (1A)—

(I) in paragraph (a)—

(A) by substituting the following for the definition of “ first tax ”:

“ ‘ first tax ’, in relation to a unit of a unit holder, means the appropriate tax that was accounted for and paid in accordance with section 739F in respect of a chargeable event within the meaning of paragraph (ccc) of the definition of ‘chargeable event’ in section 739B(1) in relation to an investment undertaking in respect of the unit and which has not been repaid;”,

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

“ ‘ new gain ’, in relation to a unit of the unit holder, means a gain referred to in section 739D(2A) in respect of that unit;”,

(II) in paragraph (b)—

(A) by substituting the following for subparagraph (ii):

“(ii) Where such relevant proportion exceeds such second tax, an amount equal to the amount of the excess shall—

(I) (A) be paid by the investment under-taking to the unit holder in respect of the unit,

(B) be included in a return under section 739F(2), and

(C) be treated as an amount which may be set off against appropriate tax payable by the investment under-taking in respect of any chargeable event in the period for which such a return is made, or any subsequent period,

(II) if the investment undertaking so elects, in writing to the Revenue Commissioners, be paid by the Revenue Commissioners to the unit holder in respect of the unit on receipt of a claim by the unit holder but only if immediately before the chargeable event the value of the number of units of the investment undertaking in respect of which, if a gain had arisen, would be treated as arising to the investment undertaking on the happening of a chargeable event does not exceed 15 per cent of the value of the total number of units of the investment undertaking at that time,

and where the investment undertaking has advised the unit holder, in writing, that clause (II) applies and has supplied the unit holder with the necessary information to enable the claim to be made to the Revenue Commissioners, then the investment undertaking shall be deemed to have made the election specified in that clause; otherwise the election under that clause shall not be made.”,

and

(B) by deleting subparagraph (iii),

(ii) in subsection (2) by substituting “Subject to subsection (2A), an investment undertaking” for “An investment undertaking”,

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

“(2A) (a) Subsection (2) shall not apply in relation to a chargeable event to which paragraph (ccc) in section 739B(1) refers where—

(i) immediately before the chargeable event the value of the number of units in the investment undertaking, or if an umbrella scheme exists in the sub-fund concerned, in respect of which any gains arising would be treated as arising to the investment undertaking, or the sub-fund as the case may be, on the happening of a chargeable event is less than 10 per cent of the value of the total number of units in the investment undertaking, or the sub-fund as the case may be, at that time, and

(ii) the investment undertaking has made an election, in writing, to the Revenue Commissioners that it will make in respect of each year of assessment a statement (including where it is the case, a statement with a nil amount) to the Revenue Commissioners in electronic format approved by them, on or before 31 March in the year following the year of assessment, which specifies in respect of each person who is a unit holder—

(I) the name and address of the person,

(II) the value at the end of the year of assessment of the units to which the person is entitled at that time, and

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

(b) Where paragraph (a) applies—

(i) the investment undertaking shall advise the unit holder concerned, in writing, that paragraph (a) applies,

(ii) the statement specified in paragraph (a)(ii) shall be made by the investment undertaking in accordance with that paragraph, and

(iii) the unit holder shall be deemed for that chargeable period to be a chargeable person for the purposes of sections 951 and 1084, and the return of income to be delivered by the person for that chargeable period shall include the following particulars:

(I) the name and address of the investment undertaking, and

(II) the gains arising on the chargeable event.”,

(d) in section 739G by inserting the following after subsection (2):

“(2A) Where a gain arises on a chargeable event to which paragraph (ccc) in section 739B(1) refers, and section 739E(2) does not apply to that chargeable event by virtue of subsection (2A) of that section, then such gain—

(a) shall be treated for the purposes of the Tax Acts as arising to the unit holder, constituting profits or gains chargeable to tax under Case IV of Schedule D at the rate specified in section 739E(1)(b), and

(b) shall not be reckoned in computing total income for the purposes of the Tax Acts,

and section 188, and the reductions specified in Part 2 of the Table to section 458, shall not apply as regards the tax so charged.”,

and

(e) in section 739H—

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

“(1A) For the purposes of subsection (1) a reference in the definition of ‘exchange’ to an investment undertaking includes a reference to a sub-fund of an umbrella scheme where the exchange concerned is between 2 or more sub-funds of different umbrella schemes.

(1B) Subsection (1A) shall not apply unless the exchange concerned is effected for bona fide commercial reasons and not primarily for the purpose of avoiding liability to taxation.”,

and

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

“(2) The cancellation of old units arising from an exchange in relation to a scheme of reconstruction or amalgamation shall not be a chargeable event and the amount invested by a unit holder for, and the date of, the acquisition of the new units shall for the purposes of this Chapter be the amount invested by the unit holder for, and the date of, the acquisition of the old units.”.

(2) (a) Paragraphs(a), (b), (c) and (d) of subsection (1) apply and have effect as respects any chargeable event (within the meaning of section 739B(1) of the Principal Act) occurring on or after the passing of this Act.

(b) Paragraph (e) of subsection (1) applies and has effect as respects any exchange (within the meaning of section 739H(1) of the Principal Act) in relation to a scheme of reconstruction or amalgamation occurring on or after the passing of this Act.

40. Amendment of section 768 (allowance for know-how) of Principal Act.

40.— (1) Section 768 of the Principal Act is amended—

(a) by substituting the following for subsection (3):

“(3) Where—

(a) a person acquires a trade or part of a trade and, together with the trade or the part of the trade, know-how used in the trade or part of the trade, or

(b) (i) a person acquires a trade or part of a trade, and

(ii) a person connected (within the meaning of section 10) with the person acquires know-how used in the trade or the part of the trade,

then no amount shall be allowed to be deducted under this section in respect of expenditure incurred on the acquisition of the know-how.

(3A) The amount which shall be allowed to be deducted under this section in respect of expenditure incurred by a person on know-how shall be limited to the amount which has been incurred wholly and exclusively on the acquisition of know-how for bona fide commercial reasons and was not incurred as part of a scheme or arrangement the main purpose or one of the main purposes of which is the avoidance of tax.”,

and

(b) by inserting the following after subsection (4):

“(5) (a) The Revenue Commissioners may, in relation to a claim by a person that expenditure is allowed to be deducted in accordance with subsection (2)—

(i) consult with any person (in this subsection referred to as an ‘expert’) who in their opinion may be of assistance in ascertaining the extent to which such expenditure is incurred on know-how, and

(ii) notwithstanding any obligation as to secrecy or other restriction on the disclosure of information imposed by, or under, the Tax Acts or any other statute or otherwise, but subject to paragraph (b), disclose any detail in the person’s claim under this section which they consider necessary for such consultation.

(b) (i) Before disclosing information to any expert under paragraph (a), the Revenue Commissioners shall make known to the person—

(I) the identity of the expert who they intend to consult, and

(II) the information they intend to disclose to the expert.

(ii) Where the person shows to the satisfaction of the Revenue Commissioners (or on appeal to the Appeal Commissioners) that disclosure of such information to that expert could prejudice the person’s trade, then the Revenue Commissioners shall not make such disclosure.”.

(2) This section applies as respects any chargeable period (within the meaning of section 321(2) of the Principal Act) ending on or after 31 January 2008.

41. Expenditure involving crime.

41.— (1) The Principal Act is amended by inserting the following section after section 83:

“83A.— (1) In computing any income chargeable to tax under Schedule D, no deduction shall be made for any expenditure incurred—

(a) in making a payment the making of which constitutes the commission of a criminal offence, or

(b) in making a payment outside of the State where the making of a corresponding payment in the State would constitute a criminal offence.

(2) Any expenditure specified in subsection (1) shall not be included in computing any expenses of management in respect of which relief may be given under the Tax Acts.”.

(2) This section applies as respects any chargeable period (within the meaning of section 321(2) of the Principal Act) ending on or after 31 January 2008.

42. Certain transfers of assets between companies.

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

(a) in section 615(2)(a)—

(i) in subparagraph (ii) by substituting “before that time,” for “before that time, and”, and in subparagraph (iii) by substituting “of the business), and” for “of the business)”, and

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

“(iv) the company acquiring the assets is not an authorised investment company (within the meaning of Part XIII of the Companies Act 1990) that is an investment undertaking (within the meaning of section 739B),”,

and

(b) in section 617(1) by substituting the following for paragraph (c):

“(c) the other company—

(i) is resident in the State at the time of the disposal or the asset is a chargeable asset in relation to that company immediately after that time, and

(ii) is not an authorised investment company (within the meaning of Part XIII of the Companies Act 1990) that is an investment undertaking (within the meaning of section 739B),”.

(2) This section applies as respects a transfer, or as the case may be a disposal, on or after 18 February 2008.

Chapter 4 Corporation Tax

43. Tax treatment of certain dividends, etc.

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

(a) in section 21A(3) by substituting “but subject to subsection (4) and section 21B” for “but subject to subsection (4)”, and

(b) by inserting the following section after section 21A:

“Tax treatment of certain dividends.

21B.— (1) (a) In this section—

‘ profits ’, in relation to a company for a period, means—

(i) where the profit and loss account, or income statement, of the company for that period is required to be laid before the annual general meeting of the company, the amount of profits, after taxation, as shown in that profit and loss account, or that income statement, and

(ii) in any other case, the amount of profits, after taxation, as shown in the profit and loss account, or income statement, of the company which is prepared in accordance with an accounting framework that, in the territory in which the company is incorporated, is generally accepted as presenting a fair view of the profit for that period;

‘ relevant territory ’ means—

(i) a Member State of the European Communities, or

(ii) not being such a Member State, a territory with the government of which arrangements having the force of law by virtue of section 826(1) have been made;

‘ trading profits ’, in relation to a company for a period, means the aggregate of so much of the profits of the company for that period as are, on a just and reasonable basis, attributable to—

(i) the carrying on by the company of a trade, and

(ii) the amount of dividends received by the company which are treated as trading profits by virtue of this section,

but does not include amounts attributable to profits, or to dividends received by a company which are paid out of profits, of an excepted trade (within the meaning of section 21A).

(b) For the purposes of this section—

(i) references to a company by which a dividend is paid apply only to a company that throughout the period out of the profits of which the dividend was paid was, by virtue of the law of a relevant territory, resident for the purposes of tax in such a relevant territory, and for this purpose ‘ tax ’, in relation to a relevant territory, means any tax imposed in the relevant territory which corresponds to corporation tax in the State,

(ii) so much of a dividend received by a company (in this subparagraph referred to as the ‘first-mentioned company’) which is paid by another company out of trading profits, or an amount treated by this section as trading profits, of the other company shall be treated as trading profits of the first-mentioned company,

(iii) subject to subparagraph (iv), the period out of the profits of which a dividend is paid by a company shall be—

(I) if the dividend is paid by the company for a specified period, that period,

(II) if the dividend is not paid for a specified period but is paid out of specified profits, the period in which those profits arise, or

(III) if the dividend is not paid by the company for a specified period nor out of specified profits, the last period for which accounts of the company were made up and which ended before the dividend became payable,

and

(iv) where, as respects a period identified in accordance with subparagraph (iii) or this subparagraph, the total dividend exceeds the profits available for distribution for that period, then so much of the dividend as is equal to the excess shall be treated as paid out of profits of the preceding period (other than profits of that period which were, or were treated for the purposes of this subparagraph as, previously distributed), and such period shall be treated as a period identified by subparagraph (iii) for the purposes of the further application of this subparagraph where required.

(2) For the purposes of this section—

(a) subject to paragraph (b), so much of a dividend paid by a company for a period, as bears to the amount of that dividend the same proportion as the amount of trading profits of the company for that period bears to the total profits of the company for that period, shall be treated as paid out of trading profits of the company, and

(b) a dividend received by a company (in this paragraph referred to as the ‘receiving company’) within the charge to corporation tax in the State which is paid by a company (in this paragraph referred to as the ‘paying company’) out of the profits of a period shall be treated as paid out of trading profits of the paying company for that period if—

(i) not less than 75 per cent of the total profits of the paying company for the period are trading profits, and

(ii) the value at the end of the accounting period in which the dividend is received by the receiving company of assets (other than specified assets) used by the receiving company, and each company of which the receiving company is the parent company (within the meaning of section 626B), during that period for the purposes of the carrying on by those companies of a trade or trades is not less than 75 per cent of the value at the end of that period of the assets (other than specified assets) of those companies, and for this purpose an asset shall be treated as a specified asset if it consists of—

(I) shares of one of those companies held by another of those companies, or

(II) loans made by one of those companies to another of those companies.

(3) Subject to subsection (4), this section applies as respects an accounting period of a company where the company receives a dividend chargeable under Case III of Schedule D from another company and the dividend is paid by the other company out of trading profits of the other company.

(4) Where the income of a company (in this subsection referred to as the ‘first-mentioned company’) which is chargeable under Case III of Schedule D for an accounting period of the company includes a dividend paid to the company by another company and the first-mentioned company—

(a) does not own, directly or indirectly, either alone or together with a person who is connected (within the meaning of section 10) with the first-mentioned company, more than 5 per cent of the share capital of the other company, and

(b) does not hold more than 5 per cent of the voting rights in the other company,

then the dividend shall be treated for the purposes of subsection (3) as a dividend received by the first-mentioned company which is paid by the other company out of trading profits of the other company.

(5) Where a company proves that this section applies as respects an accounting period of the company and makes a claim in that behalf, then subsection (3) of section 21A shall not apply to so much of any income of the company chargeable under Case III of Schedule D as consists of a dividend received by the company from another company if the dividend is paid by the other company out of trading profits of the other company.

(6) A claim by a company under this section as respects an accounting period of the company shall be included with the return under section 951 which falls to be made by the company for the accounting period.”,

(i) in paragraph (a) by deleting “and” and in paragraph (b) by substituting “income, and” for “income,”, and

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

“(c) income to which section 21A(3) does not apply by virtue of section 21B,”,

(d) in section 396A(3)—

(i) in paragraph (a) by deleting “and” and in paragraph (b) by substituting “income, and” for “income,”, and

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

“(c) income to which section 21A(3) does not apply by virtue of section 21B,”,

(e) in section 420A(3)(a)—

(i) in subparagraph (i) by deleting “and” and in subparagraph (ii) by substituting “income, and” for “income,”, and

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

“(iii) income to which section 21A(3) does not apply by virtue of section 21B,”,

and

(f) in Schedule 24, by substituting the following for paragraph 9E:

“9E. (1) (a) In this paragraph—

‘ foreign company ’ means a company resident outside the State;

‘ unrelieved foreign tax ’ has the meaning assigned to it in subparagraph (2);

‘ unrelieved foreign tax in respect of specified dividends ’ has the meaning assigned to it in subparagraph (3).

(b) For the purposes of this paragraph—

(i) a dividend is a relevant dividend if it is received by a company (in this clause referred to as the ‘receiving company’) from a company which is not resident in the State (in this clause referred to as the ‘paying company’) and the paying company is related to the receiving company (within the meaning of paragraph 9B(5)(b)), and

(ii) the aggregate amount of corporation tax payable by a company for an accounting period in respect of any dividends received by the company in the accounting period from foreign companies means so much of the corporation tax that, apart from this paragraph, would be payable by the company for that accounting period as would not have been payable had those dividends not been received by the company.

(2) (a) Where, as respects a relevant dividend received in an accounting period by a company and which is charged to corporation tax in accordance with section 21A, any part of the foreign tax cannot, apart from this paragraph, be allowed as a credit against any of the Irish taxes and, accordingly, the amount of income representing the dividend is treated under paragraph 7(3)(c) as reduced by that part of the foreign tax, then an amount determined by the formula—

100—R x D

100

where—

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

D is the amount of the part of the foreign tax by which the income is to be treated under paragraph 7(3)(c) as reduced,

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

(b) The aggregate amount of corporation tax payable by a company for an accounting period in respect of relevant dividends received by the company in that accounting period from foreign companies shall be reduced by the unrelieved foreign tax of that accounting period.

(c) Where the unrelieved foreign tax in relation to an accounting period of a company exceeds the aggregate amount of corporation tax payable by the company for the accounting period in respect of relevant dividends received by the company in that accounting period from foreign companies, the excess shall be carried forward and treated as unrelieved foreign tax of the next succeeding accounting period, and so on for succeeding accounting periods.

(3) (a) In this subparagraph ‘ specified dividend ’ means a relevant dividend which is not charged to corporation tax in accordance with section 21A.

(b) Where, as respects a specified dividend received in an accounting period by a company, any part of the foreign tax cannot, apart from this paragraph, be allowed as a credit against any of the Irish taxes and, accordingly, the amount of income representing the dividend is treated under paragraph 7(3)(c) as reduced by that part of the foreign tax, then an amount determined by the formula—

100—R x D

100

where—

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

D is the amount of the part of the foreign tax by which the income is to be treated under paragraph 7(3)(c) as reduced,

shall be treated for the purposes of clause (c) as unrelieved foreign tax in respect of specified dividends of that accounting period.

(c) The aggregate amount of corporation tax payable by a company for an accounting period in respect of specified dividends received by the company in that accounting period from foreign companies shall be reduced by the unrelieved foreign tax in respect of specified dividends of that accounting period.

(d) Where the unrelieved foreign tax in respect of specified dividends in relation to an accounting period of a company exceeds the aggregate amount of corporation tax payable by the company for the accounting period in respect of specified dividends received by the company in that accounting period from foreign companies, the excess shall be carried forward and treated as unrelieved foreign tax in respect of specified dividends of the next succeeding accounting period, and so on for succeeding accounting periods.”.

(2) This section shall be deemed to have applied as respects a dividend received on or after 1 January 2007.

44. Amendment of Part 13 (close companies) of Principal Act.

44.— (1) Part 13 of the Principal Act is amended—

(a) in section 434—

(i) in subsection (2) by substituting “and subject to subsection (3A) the distributions of a company” for “, the distributions of a company”, and

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

“(3A) (a) Where a close company pays a dividend, or makes a distribution, to another close company, the companies may jointly elect, by giving notice to the Collector-General in such manner as the Revenue Commissioners may require, that the dividend, or as the case may be the distribution, is to be treated for the purposes of section 440 as not being a distribution.

(b) Where notice is given in accordance with paragraph (a), the dividend, or as the case may be the distribution, shall be treated—

(i) for the purposes of section 440 as not being a distribution, and

(ii) for the purposes of subsection (5) as not being franked investment income.

(c) An election by a company under paragraph (a) as respects an accounting period shall be included with the return under section 951 which falls to be made by the company for the accounting period.”.

and

(b) in section 441(6)(a) by substituting “Subsections (2), (3), (3A), (6) and (7)” for “Subsections (2), (3), (6) and (7)”.

(2) This section applies as respects a dividend paid, or distribution made, on or after 31 January 2008.

45. Amendment of Part 24 (taxation of profits of certain mines and petroleum taxation) of Principal Act.

45.— (1) Part 24 of the Principal Act is amended—

(a) by renumbering section 697 as section 696A, and

(b) by inserting the following after section 696A (renumbered by paragraph (a)):

Profit Resource Rent Tax

Interpretation and application (Chapter 3).

696B.— (1) In this Chapter—

‘ cumulative field expenditure ’, in relation to an accounting period of a company in respect of a taxable field, means the aggregate of the taxable field expenditure of the company in respect of the taxable field—

(a) for that accounting period, and

(b) for any preceding accounting period beginning on or after 1 January 2007;

‘ cumulative field profits ’, in relation to an accounting period of a company in respect of a taxable field, means the aggregate of the net taxable field profits of the company in respect of the taxable field—

(a) for that accounting period, and

(b) for any preceding accounting period beginning on or after 1 January 2007,

after deducting the amount of any loss incurred in respect of the taxable field for any such period;

‘ net taxable field profits ’, in relation to an accounting period of a company, means the taxable field profits of the company for the accounting period after deducting the amount of corporation tax (if any) which would, apart from this Chapter, be payable by the company for the accounting period if the tax were computed on the basis of those profits;

‘ profit ratio ’, in relation to an accounting period of a company in respect of a taxable field, means an amount determined by the formula—

where—

A is the cumulative field profits of the company in respect of the taxable field in relation to that accounting period, and

B is the cumulative field expenditure of the company in respect of the taxable field in relation to that accounting period;

‘ profit resource rent tax ’ has the meaning given to it in section 696C;

‘ specified licence ’ means—

(a) an exploration licence, or a reserved area licence, that is granted on or after 1 January 2007, or

(b) a licensing option;

‘ taxable field ’ means an area in respect of which a petroleum lease entered into following on from a specified licence is in force;

‘ taxable field expenditure ’, in relation to an accounting period of a company, means the aggregate of the amounts of capital expenditure which consist of—

(a) abandonment expenditure,

(b) development expenditure, and

incurred by the company for the accounting period in respect of a taxable field;

‘ taxable field profits ’, in relation to an accounting period of a company, means the amount of the petroleum profits of the company in respect of a taxable field, after making all deductions and giving or allowing all reliefs that for the purposes of corporation tax are made from, or given or allowed against, or are treated as reducing—

(a) those profits, or

(b) income or chargeable gains, if any, included in those profits.

(2) For the purposes of this Chapter—

(a) the interpretations in section 684 shall apply, with any necessary modifications, in relation to expenditure and activities carried on under a specified licence as they would apply in relation to expenditure and activities carried on under a licence within the meaning of section 684 if such a licence was a specified licence, and

(b) capital expenditure incurred on or after 1 January 2007 by a company in an area which is not a taxable field but which subsequently becomes a taxable field (or part of such a field) shall be treated as if it had been incurred by the company on the day on which the area first becomes a taxable field (or part of such a field).

(3) (a) Where a company carries on a petroleum trade and that petroleum trade includes petroleum activities carried on under a specified licence, such activities shall, for the purposes of this Chapter, be treated in respect of each taxable field as a separate petroleum trade distinct from all other activities carried on by the company as part of the trade.

(b) For the purposes of paragraph (a), any necessary apportionment shall be made in computing taxable field profits or taxable field expenditure of a company and the method of apportionment adopted shall be such method as appears to the inspector or on appeal the Appeal Commissioners to be just and reasonable.

(c) Subject to paragraph (d) the provisions of sections 687 to 690 shall apply for the purposes of this Chapter in relation to any activities treated under paragraph (a) as a separate trade as they apply to a petroleum trade within the meaning of those sections.

(d) For the purposes of applying this Chapter, in relation to an accounting period of a company in respect of a taxable field, no account shall be taken of any charges paid, interest payable or a loss incurred—

(i) by any other company, or

(ii) by the first-mentioned company,

in respect of activities other than activities in relation to that field.

Charge to profit resource rent tax.

696C.— (1) Where for an accounting period of a company the profit ratio of the company in relation to a taxable field is equal to 1.5 or more, an additional duty of corporation tax (in this Chapter referred to as a ‘profit resource rent tax’) shall be charged on the profits of the company in accordance with the provisions of this Chapter.

(2) Profit resource rent tax shall be charged on the profits to which this Chapter applies of a company for an accounting period at the rate of—

(a) 5 per cent, where the profit ratio is less than 3,

(b) 10 per cent, where the profit ratio is equal to or greater than 3 and less than 4.5,

(3) The profits to which this Chapter applies as respects any taxable field for an accounting period of a company shall—

(a) in respect of any accounting period in relation to which—

(i) the profit ratio is equal to or greater than 1.5, and

(ii) the profit ratio for the immediately preceding accounting period was less than 1.5,

be determined by the formula—

{A — (B x 1.5)} x 1010010

100 — R

where—

A is the cumulative field profits of the company in respect of the taxable field in relation to the accounting period,

B is the cumulative field expenditure of the company in respect of the taxable field in relation to the accounting period, and

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

and

(b) in respect of any other accounting period of the company, be the taxable field profits of the company in respect of the taxable field for the accounting period.

Provisions relating to groups (Chapter 3).

696D.— (1) Where taxable field expenditure in respect of a taxable field is incurred by a company (in this section referred to as the ‘first company’) and

(a) another company is a wholly-owned subsidiary of the first company, or

(b) the first company is, at the time the taxable field expenditure is incurred, a wholly-owned subsidiary of another company (in this section referred to as the ‘parent company’),

then, the expenditure or so much of it as the first company specifies, may at the election of that company be deemed to be taxable field expenditure in respect of the taxable field incurred—

(i) in the case referred to in paragraph (a), by such other company (being a wholly-owned subsidiary of the first company) as the first company specifies, and

(ii) in the case referred to in paragraph (b), by the parent company or by such other company (being a wholly-owned subsidiary of the parent company) as the first company specifies.

(2) Where under subsection (1) taxable field expenditure incurred by a first company is deemed to have been incurred by another company (in this subsection referred to as the ‘other company’)—

(a) the expenditure shall be deemed to have been incurred by the other company at the time at which the expenditure was actually incurred by the first company, and

(b) in the application of this Chapter the expenditure shall—

(i) be deemed to have been incurred by the other company for the purposes of determining the cumulative field expenditure of that company, and

(ii) be deemed not to have been incurred by the first company for the purposes of determining the cumulative field expenditure of that company.

(3) The same expenditure shall not be taken into account in relation to the determination of cumulative expenditure for more than one taxable field by virtue of this section.

(4) Subsection (5) of section 694 applies for the purposes of subsection (1) as it applies for the purposes of that subsection.

Returns (Chapter3).

696E.— (1) In this section ‘ prescribed form ’ means a form prescribed by the Revenue Commissioners or a form used under the authority of the Revenue Commissioners, and includes a form which involves the delivery of a statement by any electronic, photographic or other process approved of by the Revenue Commissioners.

(2) A company carrying on petroleum activities under a specified licence shall, in addition to the return required to be delivered under section 951, prepare and deliver to the Collector-General at the same time as, and together with, the return required under section 951 on or before the specified return date for the chargeable period a full and true statement in a prescribed form of the details required by the form in respect of—

(a) the amounts constituting the aggregate of the cumulative field expenditure for each field,

(b) the amounts constituting the aggregate of the cumulative field profits for each field,

(d) the amount of profit resource rent tax, if any, payable in respect of each field,

and of such further particulars in relation to this Chapter as may be required by the prescribed form.

(3) An officer of the Revenue Commissioners may make such enquiries or take such actions within his or her powers as he or she considers necessary for the purposes of determining the accuracy or otherwise of any details or particulars contained in the statement referred to in subsection (2).

(4) Subsections (9) and (10) of section 951 shall apply to a statement required to be delivered under this section as they apply to a return required to be delivered under that section, and for that purpose a reference in those subsections to a return, other than a reference to the specified return date for the chargeable period, shall be construed as a reference to a statement under this section.

(5) Section 1052 shall apply to a failure by a person to deliver a statement under this section or the details or particulars referred to in subsection (3) as it applies to a failure to deliver a return referred to in section 1052.

Collection and general provisions.

696F.— (1) The provisions of the Corporation Tax Acts relating to—

(a) assessments to corporation tax,

(b) appeals against such assessments (including the rehearing of appeals and the statement of a case for the opinion of the High Court), and

shall apply in relation to a profit resource rent tax charged under section 696C as they apply to corporation tax charged otherwise than under this Chapter.

(2) (a) Any amount of profit resource rent tax payable in accordance with this Chapter without the making of an assessment shall carry interest at the rate of 0.0273 per cent for each day or part of a day from the date when the amount becomes due and payable until payment.

(b) Section 1080 shall apply in relation to interest payable under paragraph (a) as it applies in relation to interest payable under section 1080.”.

(2) This section is deemed to have applied in the case of profits in respect of any petroleum lease entered into following on from a licensing option or from an exploration licence, or a reserved area licence, awarded by the Minister for Communications, Energy and Natural Resources after 1 January 2007.

46. Acceleration of wear and tear allowances for certain energy-efficient equipment.

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

(a) by inserting the following section after section 285:

“285A.— (1) In this section—

‘ energy-efficient equipment ’ means equipment, named on and complying with the criteria stated on the specified list, provided for the purposes of a trade and which at the time it is so provided is unused and not second-hand;

‘ relevant period ’ means the period commencing on the date on which the first order is made under subsection (4) and ending 3 years after that date;

‘ the specified list ’ means the list of energy-efficient equipment which—

(a) complies with subsections (3) and (4), and

(b) is maintained for the purposes of this section by Sustainable Energy Ireland — The Sustainable Energy Authority of Ireland;

‘ Table ’ means the Table in Schedule 4A.

(2) Subject to this section, where for any chargeable period a wear and tear allowance is to be made under section 284 to a company which has incurred capital expenditure on the provision of energy-efficient equipment for the purposes of a trade carried on by that company, section 284(2) shall apply as if the reference in paragraph (ad) of that section to 12.5 per cent were a reference to 100 per cent.

(3) The specified list shall contain only such equipment that—

(a) is in a class of technology specified in column (1) of the Table, and

(b) is of a description for that class of technology specified in column (2) of the Table.

(4) For the purposes of this section, the Minister for Communications, Energy and Natural Resources, after consultation with and the approval of the Minister for Finance—

(a) shall by order make the specified list—

(i) stating the energy efficiency criteria to be met for, and

(ii) naming the eligible products in,

each class of technology specified in column (1) of the Table, and

(b) may by order amend the specified list—

(i) stating energy efficiency criteria to be met for, or

(ii) naming eligible products in,

any class of technology specified in column (1) of the Table.

(5) Subsection (2) shall not apply—

(a) where the person to whom the allowance is to be made in accordance with section 284 is not a company, or

(b) where the energy-efficient equipment is leased, let or hired to any person.

(6) Subsection (2) shall not apply in respect of expenditure incurred in a chargeable period on the provision of energy-efficient equipment in relation to a class of technology where the amount of that expenditure is less than the minimum amount specified in column (3) of the Table in relation to that class of technology.

(7) (a) Subsection (2) shall not apply in respect of expenditure incurred on the provision of equipment where that expenditure is not incurred in the relevant period.

(b) Where—

(i) expenditure on equipment is incurred on or after 31 January 2008 but before the first order is made under subsection (4), and

(ii) that equipment would have qualified as energy-efficient equipment under this section had such an order been made at the time the expenditure was incurred,

then this section shall apply as if the order had been made at that time.

(8) Where this section applies to capital expenditure incurred by a company on the provision of energy-efficient equipment and that equipment would not, apart from this section, be treated as machinery or plant, then that equipment shall be treated as machinery or plant for the purposes of this Chapter and Chapter 4 of this Part.

(9) Any order made by the Minister for Communications, Energy and Natural Resources for the purpose of this section shall be laid before Dáil Éireann as soon as may be after it is made and, if a resolution annulling the order is passed by Dáil Éireann within the next 21 days on which Dáil Éireann has sat after the order is laid before it, the order shall be annulled accordingly, but without prejudice to the validity of anything previously done thereunder.”,

and

(b) by inserting the following after Schedule 4:

“SCHEDULE 4A

(Class of Technology)	(Description)	(Minimum Amount)
(1)	(2)	(3)
Motors and Drives	Motor: An asynchronous electric motor with a power rating of 1.1kW or greater, either standalone or as part of other equipment, meeting a specified efficiency standard. Variable speed drive: A drive that is specifically designed to drive an AC induction motor in a manner that rotates the motor’s drive shaft at a variable speed dictated by an external signal.	€1,000
Lighting	Lighting units, comprising fittings, lamps, and associated control gear, that meet specified efficiency criteria, or lighting control systems designed to improve the efficiency of lighting units. Includes occupancy sensors and high efficiency signs.	€3,000
Building Energy Management Systems	Computer-based systems, designed primarily to monitor and control building energy use with the aim of optimising energy efficiency and meeting specified efficiency standards.	€5,000

.”.

(2) Subsection (1) 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.

47. Preliminary tax.

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

(a) in section 958—

(i) in subsection (1)(a)—

(I) by inserting the following definitions after the definition of “pre-preceding chargeable period”:

“ ‘ relevant accounting standards ’ has the same meaning as in Schedule 17A;

‘ relevant company ’ means a company in respect of which profits or gains for the purposes of Case I or II of Schedule D are computed in accordance with relevant accounting standards, which are, or include, relevant accounting standards in relation to profits or gains or losses on financial assets or liabilities;”,

and

(II) in the definition of “ relevant limit ” by substituting “€200,000” for “€150,000”,

(ii) in subsection (4D)(b), by substituting the following for “no amount were included in the chargeable person’s profits for the chargeable period in respect of chargeable gains on the disposal by the person of assets in the part of the chargeable period which is after the date by which the first instalment for the chargeable period is payable in accordance with subsection (2A),”:

“no amount were included in the chargeable person’s profits for the chargeable period—

(i) in respect of chargeable gains on the disposal by the person of assets in the part of the chargeable period which is after the date by which, or

(ii) in the case of a relevant company, in respect of profits or gains or losses accruing, and not realised, in the chargeable period on financial assets or financial liabilities as are attributable to changes in value of those assets or liabilities in the part of the chargeable period which is after the end of the month immediately preceding the month in which,

the first instalment for the chargeable period is payable in accordance with subsection (2A),”,

and

(iii) in subsection (4E), by substituting the following for paragraph (b):

“(b) the preliminary tax so paid by the chargeable person for the chargeable period is not less than 90 per cent of the amount which would be payable by the chargeable person for the chargeable period if no amount were included in the chargeable person’s profits for the chargeable period—

(i) in respect of chargeable gains on the disposal by the person of assets in the part of the chargeable period which is after the date by which, or

preliminary tax for the chargeable period is payable in accordance with subsection (2B), and”,

and

(b) by deleting subparagraph (6) of paragraph 4 of Schedule 17A.

(2) (a) Subject to paragraph (b) this section has effect for any period of account beginning on or after 1 January 2005.

(b) Subsection (1)(a)(i)(II) has effect as respects accounting periods in respect of which preliminary tax is payable after 5 December 2007.

48. Purchase of own shares — supplementary.

48.— (1) The Principal Act is amended by inserting the following section after section 176:

“176A.— (1) Subject to subsection (2), no sum shall be deducted in computing the amount of the profits or gains charged to tax under Case I or II of Schedule D in respect of any payment that is treated by virtue of section 175 or 176 as not being a distribution.

(2) Subject to section 81(2)(n), subsection (1) shall not apply to so much of any payment as consists of expenditure incurred by a company to the extent that it is incurred on shares acquired by the company and given by it as consideration for goods or services, or to an employee or director of the company.”.

(2) This section applies as respects accounting periods ending on or after 31 January 2008.

49. Amendment of Schedule 24 (relief from income tax and corporation tax by means of credit in respect of foreign tax) to Principal Act.

49.— (1) Schedule 24 to the Principal Act is amended—

(a) in paragraph 4(2A) (inserted by the Finance Act 2006) by substituting “foreign tax in respect of any income of a company (in this subparagraph referred to as ‘that income’), being income (other than income from a trade carried on by the company through a branch or agency in a territory other than the State) which is taken into account” for “foreign tax in respect of any income of a company (in this subparagraph referred to as ‘that income’), being income which is taken into account”, and

(b) by inserting the following after paragraph 9G (inserted by the Finance Act 2006):

“Dividends paid out of transferred profits

9H(1) This paragraph applies in any case where—

(a) under the law of a territory outside the State, tax is paid by a company (in this paragraph referred to as the ‘first company’) resident outside the State in respect of any of its profits,

(b) some or all of those profits become profits of another company (in this paragraph referred to as the ‘second company’) resident outside the State otherwise than by virtue of the payment of a dividend to the second company, and

(2) Where this paragraph applies, then for the purposes of allowing credit under this Schedule for foreign tax in respect of profits of the first company attributable to any dividends paid—

(a) by any company (whether or not the second company) resident outside the State,

(b) to a company resident in the State,

this Schedule shall apply with any necessary modifications as if the second company had paid the tax paid by the first company in respect of those profits of the first company which have become profits of the second company in accordance with subparagraph (1)(b).

(3) Subparagraphs (1) and (2) are subject to the following limitations—

(a) the credit against corporation tax allowable to a company resident in the State shall not exceed the amount which would have been allowable to that company had those profits become profits of the second company by virtue of the payment of a dividend by the first company to the second company, and

(b) no tax shall be taken into account in respect of profits referred to in subparagraph (1) where such profits become the profits of the second company by virtue of a scheme or arrangement the purpose or one of the main purposes of which is the avoidance of tax.”.

(2) (a) (i) Subject to subparagraph (ii)(1)(a) applies as on and from 31 January 2008.

(ii) Subsection (1)(a) shall be deemed to have applied as respects any company as on and from 1 January 2006, if an election in writing is made by the company to the Revenue Commissioners to that effect.

(b) Subsection (1)(b) applies to dividends paid on or after 31 January 2008.

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

50.— (1) Section 766 of the Principal Act is amended in subsection (1)(a) in the definition of “threshold amount”—

(a) in paragraph (i) by substituting “1 January 2014” for “1 January 2010”, and

(b) in paragraph (ii) by substituting “10 years” for “3 years”.

(2) This section applies to accounting periods commencing on or after 1 January 2008.

51. Dividends paid in connection with disposals of shares or securities.

51.— (1) The Principal Act is amended by inserting the following after section 591—

“591A.— (1) For the purposes of this section, a dividend paid, or a distribution made, by a company to a person in respect of shares or securities of the company in connection with a disposal of shares in the company shall be treated as being abnormal if the amount or value of the dividend, or as the case may be the distribution, exceeds the amount that could reasonably have been expected to be paid, or as the case may be made, in respect of the shares or securities of the company if there were no such disposal of the shares or securities.

(2) Where, in connection with the disposal by a person of any shares or securities of a company, there exists any scheme, arrangement or understanding by virtue of which, either directly or indirectly, an abnormal dividend is paid, or an abnormal distribution is made—

(a) where the person is a company, to that person or to any company connected (within the meaning of section 10) with that person, and

(b) where the person is not a company, to any company connected (within the meaning of section 10) with the person,

then, for the purposes of the Capital Gains Tax Acts, the amount or value of the dividend paid, or distribution made, to the person or, as the case may be, to the connected person, shall be treated as consideration received by the person for the disposal of the shares or securities, and shall be ignored for the purposes of the Tax Acts.

(3) Subsection (2) does not apply if it is shown that the scheme, arrangement or understanding is effected for bona fide commercial reasons and is not, or does not form part of, any scheme, arrangement or understanding of which the main purpose or one of the main purposes is avoidance of liability to tax.”.

(2) This section applies as respects a dividend paid, or a distribution made, on or after 19 February 2008.

52. Amendment of Schedule 4 (exemption of specified non-commercial state sponsored bodies from certain tax provisions) to Principal Act.

52.— (1) Schedule 4 to the Principal Act is amended by inserting the following after paragraph 26:

“26A. Commission for Communications Regulation.”.

(2) Subsection (1) is deemed to have come into force and have taken effect as on and from 1 December 2002.

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

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

(a) by substituting the following for paragraph (b) of subsection (3):

“(b) then deducting from the relevant sum any amounts allowed under sections 243A, 396A or 420A against the company’s income for the relevant accounting period from the sale of those goods.”,

and

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

“(5A) Where any part of the profits of an accounting period of a company is charged to corporation tax in accordance with section 21A, then for the purposes of this section, the relevant corporation tax shall be reduced by an amount determined by the formula—

1R0 x S

100

where—

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

S is an amount equal to so much of the profits of the company for the accounting period as are charged to tax in accordance with section 21A.

(5B) Notwithstanding section 4(4)(b), the income of a company, referred to in the expression ‘total income brought into charge to corporation tax’, for the accounting period for the purposes of subsection (2) shall be the sum determined by section 4(4)(b) for that period reduced—

(a) by any amounts allowed under sections 243A, 396A or 420A, and

(b) by an amount equal to so much of the profits of the company for the accounting period as are charged to tax in accordance with section 21A.”.

(2) (a) Subsection (1)(a) has effect for accounting periods ending on or after 18 February 2008.

(b) Subsection (1)(b) shall be deemed to have had effect for accounting periods ending on or after 31 January 2007.

Chapter 5 Capital Gains Tax

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

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

(a) in section 598—

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

“(3A) Where compensation has been received by a person under the scheme for compensation in respect of the decommissioning of fishing vessels implemented by the Minister for Agriculture, Fisheries and Food in accordance with Council Regulation (EC) No. 1198/2006 of 27 July 2006, relief under subsection (2) shall apply as if the period referred to in paragraph (i) of the definition of ‘qualifying assets’ in subsection (1)(a) were 6 years and the age referred to in subsection (2) were 45 years.”, and

(ii) by inserting the following after subsection (7):

“(8) This section shall not apply to a disposal of qualifying assets unless it is shown that the disposal is made for bona fide commercial reasons and does not form part of any arrangement or scheme of which the main purpose or one of the main purposes is the avoidance of liability to tax.”,

and

(b) by inserting the following after section 598:

“Relief on dissolution of farming partnerships.

598A.— (1) In this section—

‘ farming ’ and ‘ trade ’ have the same meanings as in the Income Tax Acts;

‘ farming partnership ’ means a partnership comprised of individuals which carries on or has carried on the trade of farming;

‘ relevant asset ’ means an asset which is jointly owned by the partners in a farming partnership;

‘ relevant disposal ’ means a disposal which arises on the occasion of the partition of a relevant asset.

(2) This section applies where a relevant asset has been owned and used for the purposes of farming by the farming partnership for a period of not less than 10 years ending with the relevant disposal.

(3) Notwithstanding subsection (2), where one of the partners acquired his or her share of a relevant asset by way of inheritance, the period of ownership and use of that asset shall be deemed to have commenced on the date on which the person entered into partnership with the other partner or partners in the farming partnership.

(4) Where a relevant disposal arises in respect of a relevant asset, a gain shall not be treated as accruing in respect of that disposal and the relevant asset shall be treated for the purposes of the Capital Gains Tax Acts as having been acquired at the same time and for the same consideration as it was originally acquired by the partner who disposed of that asset.

(5) This section shall not apply if, until the disposal, the asset formed part of the trading stock of the farming trade carried on by the farming partnership or, if the asset is acquired as trading stock, for the purposes of a trade carried on by the partner acquiring the asset.”.

(2) (a) Paragraph (a)(i) of subsection (1) 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.

(b) Paragraph (a)(ii) of subsection (1) applies to disposals made on or after 31 January 2008.

(c) Paragraph (b) of subsection (1 applies to disposals made on or after the date of the passing of this Act and will apply until 31 December 2013.

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

55.— (1) Section 603A of the Principal Act is amended—

(a) in subsection (1A) by substituting “€500,000” for “€254,000”, and

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

“(2A) For the purposes of subsection (2) ‘disposal’ includes a simultaneous disposal by both parents.”.

(2) (a) Paragraph (a) of subsection (1) applies to disposals made on or after 5 December 2007.

(b) Paragraph (b) of subsection (1) shall be deemed to have applied from 6 December 2000.

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

56.— (1) Schedule 15 to the Principal Act is amended in Part 1 by inserting the following after paragraph 40:

“41. The Commission for Communications Regulation.

42.

The Digital Hub Development Agency.”.

(2) (a) As respects the Commission for Communications Regulation, subsection (1) is deemed to have applied as on and from 1 December 2002.

(b) As respects the Digital Hub Development Agency, subsection (1) is deemed to have applied as on and from 1 January 2008.

PART 2 Excise

Chapter 1 Electricity Tax

57. Interpretation (Chapter 1).

57.— (1) In this Chapter and in Schedule 2—

“ accounting period ” means a calendar year, or such other period as the Commissioners may prescribe for the purposes of payment and returns under section 60;

“ business use ” has the same meaning that it has in Article 11 of the Directive;

“ claimant ” means a person claiming repayment under section 64;

“ CN Code ” means a Community subdivision to the combined nomenclature of the European Communities referred to in Article 1 of Council Regulation (EEC) No. 2658/87 of 23 July 1987 as amended by Council Regulation (EEC) No. 2031/2001 of 6 August 2001;

“ Commissioners ” means the Revenue Commissioners;

“ consumer ” means a person who receives electricity for consumption;

“ Directive ” means Council Directive No. 2003/96/EC of 27 October 2003;

“ dwelling ” means a premises or part of a premises used primarily as a residence;

“ electricity ” means electricity falling within CN Code 2716;

“ electronic means ” includes electrical, digital, magnetic, optical, electromagnetic, biometric, photonic means of transmission of data and other forms of related technology by means of which data is transmitted;

“ household use ” means use in a dwelling, other than for the purposes of any business activity in such dwelling;

“ local authority ” has the same meaning that it has in the Local Government Act 2001;

“ mixed supply ” means a single supply of electricity to a consumer for more than one use, where such uses are not all chargeable at the same rate of tax;

“ non-business use ” means any use other than business use and includes household use, and use by a public authority or a local authority;

“ officer ” means an officer of the Commissioners;

“ prescribed ” means prescribed by regulations made by the Commissioners under section 66;

“ public authority ” has the same meaning that it has in section 2 of the Local Government Act 2001 and includes any body prescribed by the Minister for the Environment, Heritage and Local Government pursuant to paragraph (g) of that definition;

“ supplier ” means an entity which supplies electricity to a consumer for consumption by such consumer as a user;

“ supply ” means a quantity of electricity supplied to a consumer;

“ tax ” means electricity tax within the meaning of subsection (1) of section 58;

“ unit ” means a megawatt hour.

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

58. Charging and rates.

58.— (1) In addition to any other duty which may be chargeable, and subject to the provisions of this Chapter and any regulations made under it, a duty of excise, to be known as electricity tax, shall be charged, levied and paid at the rates specified in Schedule 2 on all electricity supplied in the State to consumers.

(2) Subsection (1) shall apply to all electricity supplied by a supplier, for consumption by such supplier, where the average quantity so supplied in a calendar year exceeds 50 units.

59. Liability.

59.— (1) Tax shall be charged at the time the electricity is supplied by a supplier to a consumer.

(2) Except where subsection (3), (4) or (5) applies, a supplier shall be accountable for and liable to pay the tax charged on the electricity supplied by such supplier.

(3) Any supplier that is not established in the State shall establish a company in the State, and that company shall be liable to pay the tax due on the electricity supplied by such supplier, and shall assume all the functions and responsibilities of the supplier under this Chapter and any regulations under section 66.

(4) A supplier shall not be liable for any deficiency in the amount of tax charged on a supply of electricity, where such amount has been calculated in accordance with section 60.

(5) A consumer shall be liable for any deficiency in the amount of tax charged on a supply of electricity, where such deficiency has resulted from false or misleading information furnished to a supplier by such consumer.

60. Returns and payment.

60.— (1) For the purposes of section 59, a supplier shall, before the end of the month following an accounting period, deliver to an officer a return in such form as the Commissioners may require, of—

(a) the units supplied during such accounting period for business use and non-business use,

(b) in respect of the reliefs under section 63, the number of such units that have been deemed by the supplier to have qualified for relief under each paragraph of subsection (1) of that section.

(2) For the purposes of subsection (1), the supplier shall, in accordance with prescribed criteria, deem whether a supply is taxable at a rate set down in Schedule 2 or is relieved from tax under section 63.

(3) The Commissioners may require that the return under subsection (1) be delivered to them by electronic means.

(4) (a) Except where paragraph (b) applies, the supplier shall, in accordance with the return under subsection (1), pay the amount of tax due in respect of an accounting period before the end of the month following such accounting period, and such supplier shall ensure that the Commissioners are authorised to debit such amount from the account of such supplier in a financial institution.

(b) Without prejudice to paragraph (a), where it is estimated that the tax liability of a supplier for an accounting period will exceed €100,000, the Commissioners may require such supplier to pay the tax due in respect of interim periods, determined by them, during such accounting period, and any such interim period shall not be less than one month or greater than 6 months.

(c) Where paragraph (b) applies, the supplier shall pay the amount of tax due in respect of an interim period before the end of the month following such interim period, and shall ensure that the Commissioners are authorised to debit such amount from the account of such supplier in a financial institution.

61. Mixed supply.

61.— (1) In the case of a mixed supply, except where subsection (2) or (3) applies, tax shall, as appropriate, be charged on the quantity of electricity supplied for each use.

(2) In the case of a mixed supply involving household use, it shall be assumed that any quantity up to one unit of such supply has been supplied for such use during each calendar month in an accounting period.

(3) In the case of a mixed supply involving business and non-business use (other than household use), it shall be assumed that any quantity up to one unit of such supply has been supplied for business use during each calendar month in an accounting period.

62. Registration.

62.— Every supplier shall register with the Commissioners in accordance with such procedures as the Commissioners may prescribe or otherwise impose.

63. Reliefs.

63.— (1) Without prejudice to any other relief from tax which may apply, and subject to such conditions as the Commissioners may prescribe or otherwise impose, a relief from tax shall be granted on any electricity which is shown to the satisfaction of the Commissioners—

(a) to have been supplied for household use,

(b) to have been generated from renewable sources,

(c) to have been produced from environmentally friendly heat and power cogeneration, where such cogeneration meets the requirements for high-efficiency cogeneration under Directive 2004/8/EC of the European Parliament and of the Council of 11 February 2004,

(d) to have been used for chemical reduction, or in electrolytic or metallurgical processes,

(e) to have been used for combined heat and power generation,

(f) to have been used for the production of electricity or in connection with such production,

(g) to have been produced on board a boat or other craft.

(2) (a) For the relief under paragraph(b) of subsection (1), electricity shall be considered to have been generated from renewable sources if it is—

(i) of solar, wind, wave, tidal or geothermal origin,

(ii) of hydraulic origin produced in a hydroelectric installation,

(iii) generated from biomass or from products produced from biomass,

(iv) generated from fuel cells.

(3) For the relief under paragraph(c) of subsection (1), a determination as to whether the cogeneration concerned meets the requirements for high-efficiency cogeneration under Council Directive 2004/8/EC, shall be made by a competent authority designated for that purpose by the Minister for Finance.

(4) (a) The amount of the relief under paragraph (b) of subsection (1) shall be determined by the formula—

A x P 1 x R 1 + A x P 2 x R 2

where—

A is the total units from renewable sources, supplied by the claimant during the payment period,

P 1 is the percentage of the total units, supplied by the claimant during the payment period, that was subject to tax at the rate for business use,

P 2 is the percentage of the total units, supplied by the claimant during the payment period, that was subject to tax at the rate for non-business use,

R 1 is the rate for business use, and

R 2 is the rate for non-business use.

(b) The amount of the relief under paragraph (c) of subsection (1) shall be determined by the formula—

C x P 1 x R 1 + C x P 2 x R 2

where—

C is the total units produced from environmentally friendly heat and power cogeneration, supplied by the claimant during the payment period,

P 1 is the percentage of the total units, supplied by the claimant during the payment period, that was subject to tax at the rate for business use,

P 2 is the percentage of the total units, supplied by the claimant during the payment period, that was subject to tax at the rate for non-business use,

R 1 is the rate for business use, and

R 2 is the rate for non-business use.

(c) (i) For the purposes of paragraphs (a) and (b), where the total units produced from renewable sources or from environmentally friendly heat and power cogeneration (as the case may be) cannot otherwise be determined, a determination shall be made by reference to the data on the fuel mix in respect of the supplier concerned, as published by the Commission for Energy Regulation.

(ii) For the purposes of subparagraph (i) the data on the fuel mix shall be that in respect of the most recent year for which the Commission for Energy Regulation has published such data.

64. Repayments.

64.— (1) Effect may be given to the reliefs under paragraphs (b), (c) and (d) of subsection (1) of section 63 by means of repayment.

(2) (a) Claims for repayment under this section shall be in such form as the Commissioners may direct and shall be in respect of electricity supplied during an accounting period.

(b) Except where the Commissioners may in any particular case otherwise allow, a repayment may not be made unless the claim is made within 6 months following the end of each such accounting period.

(3) Repayments in respect of relief under paragraphs(b) and (c) of subsection (1) of section 63 shall be made to the supplier of the electricity concerned.

65. Offence and penalty.

65.— (1) It is an offence under this subsection for any person to contravene or fail to comply with any provision of this Chapter, or any regulation made under section 66, or any condition imposed under this Chapter, or under such regulation in relation to such provision.

(2) Without prejudice to any other penalty to which a person may be liable, a person convicted of an offence under subsection (1) is liable on summary conviction to a fine of €5,000.

(3) Where an offence under subsection (1) is committed by a body corporate and the offence is shown to have been committed with the consent or connivance of any person who, when the offence was committed, was a director, manager, secretary or other officer of the body corporate, or a member of the committee of management or other controlling authority of the body corporate, that person shall also be deemed to be guilty of an offence and may be proceeded against and punished as if guilty of the first-mentioned offence.

66. Regulations (Chapter 1).

66.— The Commissioners may, for the purposes of managing, securing and collecting electricity tax, or for the protection of the revenue derived from that tax, make regulations.

67. Care and management (Chapter 1).

67.— Electricity tax imposed by this Chapter is placed under the care and management of the Commissioners.

68. Commencement (Chapter 1).

68.— This Chapter comes into operation on 1 October 2008.

Chapter 2 Miscellaneous

69. Amendment of Chapter 1 of Part 2 (consolidation and modernisation of general excise law) of Finance Act 2001.

69.— (1) Chapter 1 of Part 2 of the Finance Act 2001 is amended—

(a) by inserting the following after section 108:

“Warehousing.

108A.— (1) Subject to subsections (2) and (3), the following shall take place only in a tax warehouse—

(a) the production and processing of excisable products, and

(b) the holding of excisable products under a suspension arrangement.

(2) Subsection (1)(a) does not apply to—

(a) coal within the meaning of section 94 (as amended by Finance Act 2006) of the Finance Act 1999,

(b) any operation by which the user of mineral oil makes its re-use possible in his or her own undertaking, and where the mineral oil tax already paid on that mineral oil is not less than that which would be due if the mineral oil resulting from such operation was liable to excise duty,

(i) the proper excise duty on such excisable products has already been paid, and

(ii) the amount so paid is not less than the amount chargeable on the mixture or blend.

(3) Without prejudice to the generality of subsection (1)(a), the Commissioners may, where a written application is made to them, exempt from that subsection—

(a) operations during which small quantities of excisable products are produced incidentally, and

(b) subject to such conditions as they deem fit to impose, production and processing operations involving excisable products on which the proper excise duty has already been paid, and where the amount so paid is not less than the excise duty that would be chargeable following such production or processing.

(4) Excisable products held under a suspension arrangement in a tax warehouse are deemed to be so held until such time as such products are removed from the tax warehouse.

(5) An authorised warehousekeeper, or any person acting on behalf of such warehousekeeper, shall provide such appliances, facilities and assistance as an officer may reasonably require to take account of any excisable products or materials, and allow an officer at any reasonable time to use anything so provided.”,

and

(b) by substituting the following for section 109:

“Authorisation of warehouse-keepers and approval of tax warehouses.

109.— (1) In this section—

‘ applicant ’ means a person who has applied in writing for authorisation under subsection (2);

‘ authorised ’ means authorised as an authorised warehousekeeper under this section;

‘ conditions of authorisation ’ means the conditions referred to in subsection (2)(c);

‘ excise law ’ means the statutes which relate to the duties of excise and the instruments relating to those duties made under statute;

‘ proprietor ’, in relation to a tax warehouse, means the authorised warehousekeeper who, for the time being, has possession or control of such tax warehouse;

‘ tenant ’, in relation to a tax warehouse, means an authorised warehousekeeper who has been accepted by a proprietor as a tenant in such tax warehouse in accordance with subsection (4).

(2) The Commissioners may, under this section, authorise a person, who has applied to them in writing,—

(a) as the proprietor of a tax warehouse or tax warehouses approved in relation to such proprietor in accordance with subsection (5), or as a tenant in accordance with subsection (4),

(b) for specific activities, in relation to specific types of excisable products, in such tax warehouse or tax warehouses, and

(3) (a) An applicant shall only be authorised under subsection (2) where it is shown to the satisfaction of the Commissioners that such applicant or, where the applicant is a company, any director or person having control of such company within the meaning of section 11 of the Taxes Consolidation Act 1997 (No. 39 of 1997), can satisfy the conditions of authorisation.

(b) An applicant shall only be authorised where it is shown to the satisfaction of the Commissioners that the business activity to be carried out in the tax warehouse is to be undertaken with a view to the realisation of profits from legitimate trade in excisable products.

(c) No applicant may be authorised where such applicant or, where the applicant is a company, any director or person having control of such company within the meaning of section 11 of the Taxes Consolidation Act 1997, has in the 10 years prior to such application been convicted of any indictable offence under the Acts referred to in section 1078 (1) of the Taxes Consolidation Act 1997, or any corresponding offence under the law of another Member State.

(d) No applicant shall be authorised who does not hold a current tax clearance certificate issued under section 1094 of the Taxes Consolidation Act 1997.

(e) No applicant shall be authorised for the production or processing of excisable products who does not hold a current licence for such production or processing, where such licence is required under excise law.

(4) Without prejudice to subsections (2) and (3), an applicant who has applied in relation to a tax warehouse of which he or she is not to be the proprietor, may only be so authorised where—

(a) such applicant has been accepted by the proprietor to be a tenant in that tax warehouse,

(b) the terms of that acceptance, including a statement of the responsibilities of the proprietor in relation to products to be held by the tenant, are set out in a document signed or sealed by both and approved by an officer, and

(5) (a) A premises or place shall be approved as a tax warehouse in relation to the authorisation of a proprietor, and such approval shall terminate when such authorisation is revoked or, for any other reason, ceases to have effect.

(b) The approval of a tax warehouse shall be subject to such requirements as the Commissioners may think fit to impose in any particular case, and such requirements shall be included in the conditions of authorisation of the proprietor.

(6) (a) The details of the authorisation, including the conditions of authorisation, shall be set down in a document, referred to in this section as the “authorisation document”.

(b) The authorisation document shall be signed by the applicant and by an officer, and it shall, unless another date is specified, be effective from the date on which it is so signed.

(7) (a) The proprietor shall at all times be responsible for the excise duty on the excisable products held in the tax warehouse, and shall, where required under the conditions of authorisation, provide security, at a level specified in the authorisation document, for such excise duty.

(b) Without prejudice to paragraph (a) a tenant may be required under the conditions of authorisation, to provide security for the products held by such tenant in the tax warehouse.

(c) Any authorised warehouse-keeper who dispatches excisable products from a tax warehouse under a suspension arrangement shall, before any such dispatch, provide security, at a level specified in the authorisation document, for the excise duty on such products.

(8) An authorised warehousekeeper shall inform an officer of any changes or proposed changes that are relevant to the conditions of authorisation including, in the case of a proprietor, any changes or proposed changes to the tax warehouse.

(9) The Commissioners may at any time, following such notice as is reasonable in the circumstances, vary the conditions of authorisation.

(10) Where an authorised warehousekeeper is a company, the authorisation of such warehousekeeper, and the approval of any tax warehouse of which such warehousekeeper is the proprietor, shall expire immediately upon a change of control of such company, within the meaning of section 11 of the Taxes Consolidation Act 1997.

(11) Before the date when an authorised warehousekeeper ceases to act as such, all excisable products held by such authorised warehousekeeper, or by any tenant in respect of whom he or she acts as proprietor, shall be either—

(a) removed from the tax warehouse, either on payment of the proper excise duty or under a suspension arrangement, or

(b) otherwise disposed of to the satisfaction of an officer.

(12) Authorisation under this section is at all times subject to the conditions of authorisation, and the Commissioners may revoke an authorisation where the authorised warehousekeeper—

(a) contravenes or fails to comply with such conditions,

(b) contravenes or fails to comply with any provision of excise law relating to the excisable products in respect of which the authorisation has been granted, or

(13) Where the Commissioners propose to revoke an authorisation, they shall inform the holder of that authorisation of that intention, and afford such holder an opportunity to make representations to them in relation to the matter.

(14) (a) Subject to paragraph (b), this section as amended by section 69 of the Finance Act 2008 shall, as appropriate, apply to all authorisations and approvals granted under this section prior to it being so amended.

(b) The conditions attaching to any authorisation or approval granted under this section prior to its amendment by section 69 of the Finance Act 2008 shall remain in force until such time as such conditions are varied in accordance with subsection (9).”.

(2) This section comes into operation on 1 October 2008.

70. Amendment of Part 2 (consolidation and modernisation of general excise law) of Finance Act 2001.

70.— (1) Part 2 of the Finance Act 2001 is amended—

(a) in section 121(a)(i) by inserting “108A,” after “provision of sections”,

(b) in section 124A(1)(a) by substituting “109” for “109(5)”,

(i) in subsection (1) by inserting “, or from,” after “(other than a dwelling) in”, and

(ii) in paragraph (a) of subsection (1) by inserting “, or the supply of electricity,” after “in section 97(1)”,

and

(d) in section 144A(2) by inserting “108A,” after “by section”.

(2) This section comes into operation on 1 October 2008.

71. Rates of mineral oil tax.

71.— (1) The Finance Act 1999 is amended by substituting the following for Schedule 2 to that Act, as amended by section 59(a) of the Finance Act 2007:

“SCHEDULE 2

With effect as on and from 1 November 2008.

Description of Mineral Oil	Rate of Tax
Light Oil: Petrol Aviation gasoline Heavy Oil: Used as a propellant Used for air navigation Used for private pleasure navigation Kerosene used other than as a propellant Fuel oil Other heavy oil Liquefied Petroleum Gas: Used as a propellant Other liquefied petroleum gas Coal: For business use For other use	€442.68 per 1,000 litres €442.68 per 1,000 litres €368.05 per 1,000 litres €368.05 per 1,000 litres €368.05 per 1,000 litres €00.00 €14.78 per 1,000 litres €47.36 per 1,000 litres €63.59 per 1,000 litres €00.00 €4.18 per tonne €8.36 per tonne

”.

(2) Section 59 of the Finance Act 2007 is amended by deleting paragraph (b).

(3) This section shall come into operation on 1 November 2008.

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

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

(a) in section 94(1)—

(i) by deleting the definitions of “alumina”, “leaded petrol”, “super unleaded petrol”, and “unleaded petrol”,

(ii) by inserting the following definition after the definition of “off-road dumper”:

“ ‘ petrol ’ means any light oil, other than aviation gasoline, suitable for use as a propellant;”,

(iii) by substituting the following definition for the definition of “private pleasure craft”:

“ ‘private pleasure navigation’ means navigation in any craft, by its owner or the natural or legal person who enjoys its use either through hire or through any other means, for other than commercial purposes, and in particular other than for the carriage of passengers or goods, the supply of services for consideration or for the purposes of public authorities;”,

(b) in section 96—

(i) in paragraph(a) of subsection (2A) by substituting “petrol” for “unleaded petrol” in both places where it occurs,

(ii) in paragraph(b) of subsection (2A) by deleting “with a maximum sulphur content as provided for in that Schedule”,

“Private pleasure navigation.

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