Finance Act 2010

• (a) in subsection (1) by inserting “where the redemption, repayment or purchase does not form part of a scheme or arrangement the main purpose or one of the main purposes of which is to enable the owner of the shares to participate in the profits of the company or of any of its 51 per cent subsidiaries without receiving a dividend” after “shares”,

• (b) by inserting the following after subsection (1):

• “(1A)

  • (a) Where in any accounting period a quoted company makes a payment on the redemption, repayment or purchase of its own shares, the company shall, not later than 12 months from the end of the accounting period, give notice to the Collector-General, or such other officer of the Revenue Commissioners as may be authorised by them for the purposes of this subsection, of—

    • (i) the payment, and

    • (ii) whether the payment is to be treated as not being a distribution by virtue of subsection (1).

  • (b) A notice under paragraph (a) shall be given by a company—

    • (i) in the return required to be made under section 951 for the accounting period of the company in which the payment is made, or

    • (ii) in such manner and form as the Revenue Commissioners may prescribe.”,

and

• (c) in subsection (2) by substituting “subsections (1) and (1A)” for “subsection (1)”.

• (2) This section applies to payments referred to in section 175 of the Principal Act which are made on or after 4 February 2010.

35. Amendment of Part 3 (provisions relating to the Schedule C charge and government and other public securities) of Principal Act.

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

• (a) by substituting the following for section 42:

“Exemption of interest on savings certificates.

42.— (1) In this section—

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

‘EEA state’ means a state which is a contracting party to the EEA Agreement;

‘relevant State’ means—

• (i) a Member State of the European Union, or

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

• (2) The accumulated interest payable in respect of any savings certificate issued by the Minister for Finance, or savings certificates or other similar securities issued by the Government of a relevant State pursuant to rules and conditions which correspond to the rules and conditions contained in regulations issued by the Minister for Finance, under which the purchaser, by virtue of an immediate payment of a specified sum, becomes entitled after a specified period to receive a larger sum consisting of the specified sum originally paid and accumulated interest on that specified sum, shall not be liable to tax so long as the amount of such certificates held by the person who is for the time being the holder of the certificate does not exceed the amount which that person is for the time being authorised to hold under regulations made by the Minister for Finance.”,

• (b) in subsection (1) of section 43 by substituting “resident” for “ordinarily resident”,

• (c) in subsection (4) of section 45 by substituting “resident” for “ordinarily resident”,

• (d) in subsection (5) of section 48 by substituting “resident” for “ordinarily resident”, and

• (e) in section 49 by the substitution of the following for subsection (2):

• “(2) Any stock or other security to which this section applies may be issued with a condition that neither the capital of nor the interest on the stock or other security shall be liable to tax so long as it is shown in the manner directed by the Minister for Finance that the stock or other security is in the beneficial ownership of persons who are not resident in the State, and accordingly as respects every such stock or other security issued, exemption from tax shall be granted.”.

• (2) This section comes into force and takes effect as on and from 4 February 2010.

36. Amendment of section 299 (allowances to lessees) of Principal Act.

36.— (1) Section 299 of the Principal Act is amended—

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

• “(1) Subject to subsection (3), where machinery or plant is let by means of a finance lease (within the meaning of section 76D) to a person, by whom a trade is carried on, on the terms of that person being bound to maintain the machinery or plant and deliver it over in good condition at the end of the lease, and if the burden of the wear and tear of the machinery or plant in fact falls directly on that person, then, for the purposes of sections 283 and 284, the capital expenditure on the provision of the machinery or plant shall be deemed to have been incurred by that person and not by any other person and the machinery or plant shall be deemed to belong to that person and not to any other person.”,

and

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

• “(3)

  • (a) In this subsection ‘lease payments’, ‘lessee’ and ‘lessor’ have, respectively, the same meanings as in section 80A.

  • (b) Subsection (1) shall only apply where—

    • (i) the lessor and lessee jointly elect, or

    • (ii) where the lessor is not a person within the charge to tax under Schedule D, the lessee elects,

    that this section shall apply for the purposes of sections 283 and 284 by giving notice in writing to the inspector on or before the specified return date for the chargeable period (within the meaning of section 950) in a form approved by the Revenue Commissioners and containing such particulars relating to the lessor and lessee and in connection with the lease as may be specified in the approved form.

  • (c) Where this section applies—

    • (i) the amount to be deducted in computing the profits or gains to be charged to tax under Case 1 of Schedule D for any chargeable period of the lessee in relation to lease payments to be paid in respect of the finance lease, shall be the amount in respect of those lease payments which in accordance with generally accepted accounting practice would be deducted in a profit and loss account for that period, and accordingly, the aggregate amount (referred to in subparagraph (ii) as the ‘aggregate deductible amount’) to be deducted in computing the profits or gains to be charged to tax under Case 1 of Schedule D for any chargeable period of the lessee in relation to lease payments to be paid in respect of and over the term of the lease, shall be the amount in relation to those lease payments which in accordance with generally accepted accounting practice would be deducted in the profit and loss account over the term of the lease, and

    • (ii) where capital expenditure deemed to have been incurred by the lessee would otherwise exceed the amount by which the aggregate amount of lease payments to be paid in respect of the lease exceeds the aggregate deductible amount, then the amount of capital expenditure on the provision of plant and machinery for the purposes of subsection (1) shall be deemed to be the amount by which the aggregate amount of the lease payments made in respect of and over the term of the lease exceeds the aggregate deductible amount.”.

• (2) This section applies to chargeable periods (within the meaning of Part 9 of the Principal Act) commencing on, or after, the passing of this Act.

37. Amendment of Chapter 4 (interest payments by certain deposit takers) of Part 8 of Principal Act.

37.— (1) Chapter 4 of Part 8 of the Principal Act is amended—

• (a) in section 256(1) by inserting the following definition after the definition of “pension scheme”:

“ ‘PRSA provider’ has the same meaning as in Part X of the Pensions Act 1990;”,

• (b) in section 256(1) in paragraph (i) of the definition of “ re levant deposit ” by deleting “or”,

• (c) in section 256(1) in paragraph (j) of the definition of “relevant deposit” by substituting “subsection (1B), or” for “subsection (1B);”,

• (d) in section 256(1) in the definition of “relevant deposit” by inserting the following after paragraph (j):

• “(k) which is made by, and the interest on which is beneficially owned by, a PRSA provider where the PRSA provider has provided the relevant deposit taker with the number assigned to that provider by the Revenue Commissioners;”,

• (e) in section 256 by inserting the following after subsection (2):

• “(3) As respects any specified deposits, the relevant deposit taker shall obtain the tax reference number (within the meaning of section 885) of the person making the deposit and the person making the deposit shall provide the tax reference number.”,

• (f) in section 258(4) by substituting the following for paragraphs (a) and (b):

• “(a) Notwithstanding subsection (3), a relevant deposit taker shall for each year of assessment pay an amount of appropriate tax to the Collector-General within 21 days of each of the following dates in that year of assessment—

  • (i) 31 March,

  • (ii) 30 June, and

  • (iii) 30 September.

• (b) The amount to be paid—

  • (i) within 21 days of 31 March as referred to in paragraph (a)(i) shall not be less than the amount of appropriate tax which would be due and payable by the relevant deposit taker for the year of assessment concerned under subsection (3) if the total amount of the relevant interest which had accrued in the period commencing on 1 January and ending on 31 March,

  • (ii) within 21 days of 30 June as referred to in paragraph (a)(ii) shall not be less than the amount of appropriate tax which would be due and payable by the relevant deposit taker for the year of assessment concerned under subsection (3) if the total amount of the relevant interest which had accrued in the period commencing on 1 April and ending on 30 June, and

  • (iii) within 21 days of 30 September as referred to in paragraph (a)(iii) shall not be less than the amount of appropriate tax which would be due and payable by the relevant deposit taker for the year of assessment concerned under subsection (3) if the total amount of the relevant interest which had accrued in the period commencing on 1 July and ending on 30 September,

  in that year of assessment on all relevant deposits held by the relevant deposit taker in that period (and no more) had been paid by it in that year of assessment.”,

• (g) in section 259(4) by substituting the following for paragraph (a):

• “(a) (i) Subject to subparagraph (ii) and notwithstanding section 258(3), a relevant deposit taker shall for each year of assessment pay to the Collector-General, within 21 days of each of the dates referred to in subparagraphs (i), (ii) and (iii) of section 258(4)(a) (each of which dates, as the case may be, is referred to in the Table to this subparagraph as the ‘relevant quarterly date’) in that year of assessment, an amount on account of appropriate tax which shall be not less than the amount determined by the formula set out in the Table to this subparagraph, and any amount on account of appropriate tax so paid by the relevant deposit taker for a year of assessment shall be treated as far as may be as a payment on account of any appropriate tax due and payable by it for that year of assessment under section 258(3).

TABLE

A — (B — C)

3

where—

A is the amount of appropriate tax which would be due and payable by the relevant deposit taker for the year of assessment (in this Table referred to as ‘the relevant year’) in accordance with section 258(3) if the total amount of the relevant interest which had accrued in the period of 12 months ending on the relevant quarterly date in the relevant year on all relevant deposits held by the relevant deposit taker in that period (and no more) had been paid by it in the relevant year,

B is the amount of appropriate tax which was due and payable by the relevant deposit taker for the year of assessment preceding the relevant year in accordance with section 258(3), and

C is an amount equal to the lesser of the amount at B and the amount treated, in accordance with this subsection or section 258(4), as paid by the relevant deposit taker on account of the appropriate tax due and payable by it for the year of assessment preceding the relevant year.

- (ii) Notwithstanding section 258(3), the aggregate of the amounts on account of appropriate tax due in accordance with subparagraphs (i) and (iii) shall not, in any event, be less than the amount determined by the formula set out in the Table to this subparagraph.

  TABLE

  A — (B — C)

  where—

  A is the amount of appropriate tax which would be due and payable by the relevant deposit taker for the year of assessment (in this Table referred to as ‘the relevant year’) in accordance with section 258(3) if the total amount of the relevant interest which had accrued in the period of 12 months ending on 30 September in the relevant year on all relevant deposits held by the relevant deposit taker in that period (and no more) had been paid by it in the relevant year,

  B is the amount of appropriate tax which was due and payable by the relevant deposit taker for the year of assessment preceding the relevant year in accordance with section 258(3), and

  C is an amount equal to the lesser of the amount at B and the amount treated, in accordance with this subsection or section 258(4), as paid by the relevant deposit taker on account of the appropriate tax due and payable by it for the year of assessment preceding the relevant year.

- (iii) Where, for any year of assessment the amount computed in accordance with subparagraph (ii) exceeds the aggregate of the amounts computed in accordance with subparagraph (i), and without prejudice to the obligation to pay any amount computed in accordance with subparagraph (i), that excess shall be paid by the relevant deposit taker to the Collector-General within 21 days of 30 September in that year of assessment and shall be treated as far as may be as a payment on account of any appropriate tax due and payable by it for that year of assessment under section 258(3).”,

• (h) in section 260(4) by substituting the following for paragraph (a):

• “(a) in accordance with section 258(4) or 259(4), as may be appropriate, a relevant deposit taker makes a payment on account of appropriate tax in respect of specified interest as if, in relation to each specified deposit held by it, the references—

  • (i) in section 258(4), to each of the periods referred to in subparagraphs (i), (ii) and (iii) of paragraph (b) of section 258(4) in the year of assessment, were a reference to the period beginning on the date on which the specified deposit was made and ending on each date referred to in subparagraphs (i), (ii) and (iii) of section 258(4)(a), as the case may be, in the year of assessment,

  • (ii) in section 259(4)(i), where it occurs in the meaning assigned to ‘A’, to the period of 12 months ending on each of the dates referred to in subparagraphs (i), (ii) and (iii) of section 258(4)(a) in the relevant year, were a reference to the period beginning on the date on which the specified deposit was made and ending on each date referred to in subparagraphs (i), (ii) and (iii) of section 258(4)(a), as the case may be, in the year of assessment, and

  • (iii) in section 259(4)(ii), where it occurs in the meaning assigned to ‘A’, to the period of 12 months ending on 30 September in the relevant year, were a reference to the period beginning on the date on which the specified deposit was made and ending on 30 September in the year of assessment,

  and”,

and

• (i) in section 262 by substituting “shall furnish to every person entitled to any relevant interest on a relevant deposit held by the relevant deposit taker” for “shall, when requested to do so by any person entitled to any relevant interest on a relevant deposit held by the relevant deposit taker, furnish to that person,”.

• (2)
• (a) Paragraphs (a) to (d) of subsection (1) apply as respects any payment or crediting of relevant interest (within the meaning of Chapter 4 of Part 8 of the Principal Act) made on or after the date of the passing of this Act.

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

• (c) Paragraphs (f) to (i) of subsection (1) come 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.

38. Amendment of section 481 (relief for investment in films) of Principal Act.

38.— The Principal Act is amended in section 481—

• (a) in subsection (3) by deleting “an amount equal to 125 per cent of the amount” and substituting “the amount”, and

• (b) in subsection (8) by deleting “125 per cent of the relevant deduction” and substituting “the amount of the relevant deduction”.

39. Specified financial transactions.

39.— The Principal Act is amended by inserting the following after Part 8—

“PART 8A

Specified Financial Transactions

Chapter 1

Interpretation

Interpretation.

267N.— (1) For the purpose of this Part—

‘asset’ has the same meaning as in section 532;

‘charges on income’ has the same meaning as in section 243;

‘credit return’ means—

• (a) in the case of a credit transaction within the meaning of paragraph (a) or (b) of the definition of ‘credit transaction’, the excess of the consideration accruing to the finance undertaking from the borrower in respect of the asset over the consideration paid or payable by the finance undertaking for that asset, and

• (b) in the case of a credit transaction within the meaning of paragraph (c) of the definition of ‘credit transaction’, the excess of the consideration (including any consideration paid or payable for the use of the asset during the period of the arrangement) accruing to the finance undertaking from the borrower in respect of the interest of the finance undertaking in the asset over the consideration paid or payable by the finance undertaking for that asset;

‘credit transaction’ means—

• (a) an arrangement whereby a finance undertaking acquires an asset for the purpose of disposing of the full interest in that asset to a borrower in circumstances where—

  • (i) the consideration paid or payable by the borrower exceeds the consideration paid or payable by the finance undertaking for the asset,

  • (ii) all or part of that consideration is not required to be paid until a date later than the date of the disposal, and

  • (iii) the excess of the consideration paid or payable to the finance undertaking by the borrower in respect of the asset over the consideration paid or payable by the finance undertaking for the asset is equivalent to the return on a loan of money at interest,

• (b) an arrangement whereby a finance undertaking acquires an asset and—

  • (i) immediately disposes of its full interest in that asset to a borrower for a consideration which exceeds the consideration paid or payable by the finance undertaking for the asset,

  • (ii) the borrower acquires and immediately disposes of the full interest in that asset to another person for a consideration which is at least 95 per cent of the consideration paid or payable by the finance undertaking for the acquisition of that asset,

  • (iii) all or part of the consideration for the acquisition of the asset by the borrower is not required to be paid by the borrower until a date later than the date of the purchase of the asset, and

  • (iv) the excess of the consideration paid or payable to the finance undertaking by the borrower in respect of the asset over the consideration paid or payable by the finance undertaking for the asset is equivalent to the return on a loan of money at interest,

  or

• (c) an arrangement whereby—

  • (i) a finance undertaking and a borrower jointly acquire an asset, or

  • (ii) a finance undertaking acquires an interest in an asset from a borrower, in circumstances where the borrower retains an interest in that asset,

  on terms whereby—

  - (I) the borrower—
  
  - (A) in the circumstances referred to in subparagraph (i) has exclusive use of the asset immediately and, in the circumstances referred to in subparagraph (ii), retains exclusive use of the asset immediately, as the case may be,
  
  - (B) is exclusively entitled to any income, profit or gain arising from or attributable to the asset (including any increase in the value of the asset), and
  
      - (C) agrees to make payments to the finance undertaking amounting to the aggregate of the consideration paid or payable by the finance undertaking for the acquisition of its interest in the asset and any consideration paid or payable by the borrower for the use of the asset during the period of the arrangement,
  
      - (II) the excess of the consideration (including any consideration paid or payable for the use of the asset during the period of the arrangement) accruing to the finance undertaking from the borrower in respect of the interest of the finance undertaking in the asset over the consideration paid or payable by the finance undertaking for the asset is equivalent to the return on a loan of money at interest, and
  
      - (III) the finance undertaking’s interest in the asset passes either immediately or by the end of a specified period of time, to the borrower for a consideration which exceeds the consideration paid by the finance undertaking for the asset;
  
        ‘deposit transaction’ means a transaction whereby—
  

• (a) a person deposits a sum of money with a relevant deposit taker on terms under which it or any part of it may be repaid, either on demand or at a time or in circumstances agreed by or on behalf of the person making the deposit and the relevant deposit taker,

• (b) the relevant deposit taker makes or credits a payment or a series of payments (in this Part referred to as the ‘deposit return’) over a period of time to the person—

  • (i) out of any profit resulting from the use of that money, and

  • (ii) in proportion to the money deposited by the person;

  ‘finance company’ means a company whose income consists of either or both of the following—

• (a) income from the leasing of plant and machinery, and

• (b) income from the carrying on of specified financial transactions;

‘financial institution’ has the same meaning as in section 891B;

‘finance undertaking’ means a finance company or a financial institution;

‘investment certificate’ means a security which—

• (a) is issued by a qualifying company to a person in order to establish the claim of that person over the rights and obligations represented by the certificate,

• (b) entitles the owner to an amount equivalent to a share in the profits or losses derived from an asset held by the qualifying company which issued the certificate, in proportion to the number and value of the certificates owned,

• (c) is issued to the public, and

• (d) is wholly or partly treated in accordance with generally accepted accounting practice as a financial liability of the qualifying company which issued the certificate;

‘investment return’ means—

• (a) the excess (if any) of the consideration paid by the qualifying company on redemption of an investment certificate over the consideration paid in respect of that certificate by the beneficial owner to whom the certificate was first issued, and

• (b) any other payments (if any) made from time to time by the qualifying company to the beneficial owner from profits or gains derived by the qualifying company from the asset and in consideration of the holding of the investment certificate;

‘ investment transaction ’ means a transaction whereby a person acquires investment certificates and receives an investment return;

‘loan’ means any loan or advance or any other arrangement whatever by virtue of which an amount equivalent to interest is paid or payable;

‘ owner ’, in relation to any security, means at any time the person who would be entitled, if the securities were redeemed at that time by the issuer, to the proceeds of the redemption, and ‘owned’ shall be construed accordingly;

‘public’ means individuals generally, companies generally, or individuals and companies generally;

‘ qualifying company ’ means a company which—

• (a) is resident in the State,

• (b) issues investment certificates to investors, and

• (c) redeems the investment certificates after a specified period of time;

‘relevant deposit’, ‘relevant deposit taker’ and ‘relevant interest’ have, respectively, the meanings assigned to them by section 256;

‘specified financial transaction’ means—

• (a) a credit transaction,

• (b) a deposit transaction, or

• (c) an investment transaction,

but a transaction shall not be a specified financial transaction if the terms of the transaction are not such as would reasonably have been expected if the parties to the transaction were independent persons acting at arm’s length.

• (2) Any reference in this Part to consideration—

  • (a) paid or payable by a borrower or a finance undertaking shall be construed as a reference to the aggregate of amounts paid or payable by the borrower or finance undertaking, as the case may be,

  • (b) shall not include any amount in respect of which a borrower or a finance undertaking may claim—

    • (i) a deduction under section 12 of the Value-Added Tax Act 1972, or

    • (ii) a refund of value-added tax under an order under section 20(3) of that Act,

    and

  • (c) shall not include any amount chargeable by a finance undertaking in respect of fees, charges or similar payments.

  Chapter 2

  Credit Return

  Treatment of credit return.

  267O.— (1) Subject to section 130, a credit return shall be treated for all the purposes of the Tax Acts as if it were interest paid or payable, as the case may be, on a loan made by the finance undertaking to the borrower, or a security issued by the borrower to the finance undertaking, as the case may be, and the return shall be chargeable to tax accordingly.

• (2) The amount of the credit return shall not be regarded as expenditure on an asset for the purpose of an allowance under Part 9, section 670, Part 29 or any other provision of the Tax Acts relating to the making of allowances in accordance with Part 9.

• (3) The amount of the credit return shall not be regarded as expenditure on an asset for the purpose of section 552.

Treatment of credit transaction.

267P.— (1) A reference to a loan in section 122 or in Part 8 shall be deemed to include a reference to a credit transaction.

• (2) Acquisitions and disposals of an asset by the finance undertaking for the purpose of a credit transaction, within the meaning of paragraph (a) or (b) of the definition of ‘credit transaction’ in section 267N shall, where the finance undertaking is carrying on a trade which consists of or includes specified financial transactions, be regarded as made in the course of that trade.

• (3) The borrower shall not be treated as having incurred a loss, for any purpose of the Tax Acts, on the disposal of the asset in the circumstances referred to in paragraph (b)(ii) of the definition of ‘credit transaction’ in section 267N.

• (4) The finance undertaking shall not be entitled to any allowance under Part 9, section 670, Part 29 or any other provision of the Tax Acts relating to the making of allowances in accordance with Part 9, in respect of expenditure incurred on assets acquired for the purpose of entering into a credit transaction.

• (5) Where an asset is acquired by a borrower under a credit transaction, in the circumstances referred to in paragraph (c)(i) of the definition of ‘credit transaction’ in section 267N, the borrower shall be deemed to have acquired the full interest in that asset for the purpose of claiming any allowance under Part 9, section 670, Part 29 or any other provision of the Tax Acts relating to the making of allowances in accordance with Part 9.

• (6) The disposal of the borrower’s interest in the asset to the financial undertaking, in the circumstances referred to in paragraph (c)(ii) of the definition of ‘credit transaction’ in section 267N, shall not be construed as an event giving rise to an allowance or charge, as the case may be, within the meaning of section 274 or 288.

• (7) The acquisition of an asset by the borrower, in the circumstances referred to in paragraph (c)(III) of the definition of ‘credit transaction’ in section 267N, shall not be construed as expenditure on an asset for the purpose of claiming any allowance under Part 9, section 670, Part 29 or any other provision of the Tax Acts relating to the making of allowances in accordance with Part 9.

• (8) Except in respect of a claim to any allowance referred to in subsection (5), no part of the consideration paid or payable by the borrower to the finance undertaking, other than an amount equal to the credit return, may be treated by the borrower as an amount which may be deducted in the computation of the profits or gains to be charged to tax under Schedule D.

Chapter 3

Deposit Return

Treatment of deposit return.

267Q.— Subject to section 130, a deposit return shall be treated for all the purposes of the Tax Acts as if it were relevant interest paid on a deposit of money and for this purpose—

- (*a*) Chapter 4 of Part 8 shall apply to the deposit return as if it were relevant interest on a relevant deposit, and

- (*b*) the relevant deposit taker shall not be regarded as carrying on a trade in partnership with the beneficial owner of the deposit for the purposes of Part 43 merely by virtue of the deposit arrangement.

  Chapter 4

  *Investment Certificates and Returns*

  Treatment of investment return.

  267R.— Subject to section 130, the Tax Acts shall apply to an investment return as if that investment return were interest on a security and the return shall be chargeable to tax accordingly.

  Treatment of certificate owner.

  267S.— (1) For the purposes of the Tax Acts, the owner of the investment certificate shall not be regarded as having a legal or beneficial interest in the assets held by the qualifying company.

• (2) Income, profits, gains or losses arising from or attributable to the assets held by the qualifying company (including any increase or decrease in the value of the asset) shall be income, profits, gains or losses, as the case may be, of the qualifying company and the qualifying company shall be chargeable to corporation tax accordingly.

• (3) The owner of the investment certificate shall not be entitled to an allowance under Part 9, section 670, Part 29 or any other provision of the Tax Acts relating to the making of allowances in accordance with Part 9 in respect of expenditure on the assets held by the qualifying company.

Chapter 5

Reporting

Reporting.

267T.— Part 38 in so far as it relates to the reporting of interest payments shall apply to a deposit return, a credit return or an investment return as if that return were an interest payment.

Chapter 6

Application

Application.

267U.— (1) This Part shall apply to a specified financial transaction between a finance undertaking or a qualifying company, as the case may be, and another person where the finance undertaking or the qualifying company, as the case may be, makes an election in writing to the inspector (within the meaning of section 950).

• (2) An election under this section—

  • (a) shall be made in a form approved by the Revenue Commissioners and containing such particulars relating to the finance undertaking or the qualifying company, as the case may be, and the transaction as may be specified in that form, and

  • (b) may be made either in respect of an individual transaction or in respect of a series of transactions of a similar nature.

• (3) Where an election is made in accordance with this section—

  • (a) this Part shall apply to that transaction or series of transactions, and

  • (b) the finance undertaking or the qualifying company, as the case may be, shall notify any borrower or owner, as the case may be, who is a party to a specified financial transaction, that the transaction is a specified financial transaction.

  Transactions to avoid tax.

  267V.— This Part shall not apply to any transaction unless that transaction has been undertaken 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 avoidance of liability to income tax, corporation tax, capital gains tax, value-added tax, stamp duty or capital acquisitions tax.”.

40. Interest payments to residents in relevant territories.

40.— (1) The Principal Act is amended in section 198—

• (a) in subsection (1)(a) by substituting the following for the definition of “arrangements”:

“ ‘arrangements’ means arrangements having the force of law by virtue of section 826(1) or arrangements made with the government of a territory which on completion of the procedures set out in section 826(1) will have the force of law;”,

• (b) in the definition of “ relevant territory ”—

• (i) in paragraph (i) by inserting “or” after “the State,”,

• (ii) in paragraph (ii) by deleting “made, or” and inserting “made;”, and

• (iii) by deleting paragraph (iii),

• (c) in subsection (1)(b)(i) by inserting “and have effect in accordance with the provisions of those arrangements” after “have been made”, and

• (d) by substituting the following for subsection (1)(c)(ii):

• “(ii) a company shall not be chargeable to income tax in respect of interest paid by a relevant person (within the meaning of section 246) in the ordinary course of a trade or business carried on by that person—

  • (I) if the company is not resident in the State but is regarded for the purposes of this subsection as being a resident of a relevant territory which imposes a tax that generally applies to interest receivable in that territory by companies from sources outside that territory, or

  • (II) where the interest—

  • (A) is exempted from the charge to income tax under arrangements made with the government of a territory outside the State having the force of law under the procedures set out in section 826(1), or

  • (B) would be exempted from the charge to income tax if arrangements made, on or before the date of payment of the interest, with the government of a territory outside the State, that do not have the force of law under the procedures set out in section 826(1), had the force of law when the interest was paid,”.

• (2) The Principal Act is amended in section 246(3) by substituting the following for paragraph (h)—

• “(h) interest, other than interest referred to in paragraphs (a) to (g), paid by a relevant person in the ordinary course of a trade or business carried on by that person to a company—

  • (I) which, by virtue of the law of a relevant territory, is resident in the relevant territory for the purposes of tax and that relevant territory imposes a tax that generally applies to interest receivable in that territory by companies from sources outside that territory, or

  • (II) where the interest—

  • (A) is exempted from the charge to income tax under arrangements made with the government of a territory outside the State having the force of law under the procedures set out in section 826(1), or

  • (B) would be exempted from the charge to income tax if arrangements made, on or before the date of payment of the interest, with the government of a territory outside the State, that do not have the force of law under the procedures set out in section 826(1), had the force of law when the interest was paid,

  except where such interest is paid to that company in connection with a trade or business which is carried on in the State by that company through a branch or agency.”.

• (3) This section applies to interest paid on or after the date of passing of this Act, other than interest paid under an agreement entered into before that date.

41. Credit for foreign tax.

41.— (1) Section 71 of the Principal Act is amended by inserting the following after subsection (3):

• “(3A)

  • (a) In this subsection ‘foreign tax’ means a tax chargeable and payable under the law of a territory other than the State which corresponds to income tax or corporation tax.

  • (b) Where income arising outside the State is chargeable to tax under Case III of Schedule D and a payment is made under the law of a territory other than the State to the person in receipt of the income by reference to foreign tax paid by another person, then the amount of income so chargeable shall be increased by an amount equal to the amount of the payment.”.

• (2) Schedule 24 to the Principal Act is amended in paragraph 9A—

• (a) in subparagraph (3) by substituting “subparagraphs (3B) and (5)” for “subparagraph (5)”,

• (b) by inserting the following after subparagraph (3A):

• “(3B) Where a payment is made under the law of a territory other than the State to any person by reference to tax paid under the law of a territory other than the State in relation to a relevant dividend paid by a company, then the amount of the credit to be allowed under subparagraph (3) against corporation tax attributable to the profits represented by the dividend shall be reduced by an amount equal to the amount of the payment.”,

and

• (c) in subparagraph (4) by substituting “subparagraphs (3) and (3B)” for “subparagraph (3)”.

• (3) This section applies to income and dividends received on or after 4 February 2010.

42. Transfer pricing.

42.— (1) The Principal Act is amended by inserting the following after Part 35:

“PART 35A

TRANSFER PRICING

Interpretation.

835A.— (1) In this Part—

‘arrangement’ means any agreement or arrangement of any kind (whether or not it is, or is intended to be, legally enforceable);

‘ authorised officer ’ means an officer of the Revenue Commissioners authorised by them in writing for the purposes of this Part;

‘ chargeable period ’ has the same meaning as in section 321(2);

‘Commission Recommendation ’ means Commission Recommendation 2003/361/EC of 6 May 2003 ⁴ concerning the definition of micro, small and medium-sized enterprises;

‘double taxation relief arrangements ’ means arrangements having effect by virtue of section 826;

‘group’ means a company which has one or more 75 per cent subsidiaries together with those subsidiaries;

‘relevant activities’, in relation to a person who is one of the persons between whom an arrangement is made, means that person’s activities—

• (a) which comprise the activities in the course of which, or with respect to which, that arrangement is made, and

• (b) which are not activities carried on either separately from the activities referred to in paragraph (a) or for the purpose of a different part of that person’s business;

‘relevant person ’, in relation to an arrangement, means a person who is within the charge to tax under Case I or II of Schedule D in respect of profits or gains or losses, the computation of which profits or gains or losses takes account of the results of the arrangement;

‘tax’ means income tax or corporation tax.

• (2) References in this Part to ‘control’, in relation to a company, shall be construed in accordance with section 11.

Meaning of associated.

835B.— (1) For the purposes of this Part—

- (*a*) 2 persons are associated at any time if at that time—

    - (i) one of the persons is participating in the management, control or capital of the other, or

    - (ii) the same person is participating in the management, control or capital of each of the 2 persons,

      and

- (*b*) a person (in this paragraph referred to as the ‘first person’) is participating in the management, control or capital of another person at any time only if that other person is at that time—

    - (i) a company, and

    - (ii) controlled by the first person.

• (2)

  • (a) For the purposes of this section a company shall be treated as controlled by an individual if it is controlled by the individual and persons connected with the individual.

  • (b) For the purposes of this subsection a person is connected with an individual if that person is a relative (within the meaning of section 433(3)(a)) of that individual.

  Basic rules on transfer pricing.

  835C.— (1) Subject to this Part, this section applies to any arrangement—

  • (a) involving the supply and acquisition of goods, services, money or intangible assets,

  • (b) where, at the time of the supply and acquisition, the person making the supply (in this Part referred to as the ‘supplier’) and the person making the acquisition (in this Part referred to as the ‘acquirer’) are associated, and

  • (c) the profits or gains or losses arising from the relevant activities are within the charge to tax under Case I or II of Schedule D in the case of either the supplier or the acquirer or both.

• (2)

  • (a) If the amount of the consideration payable (in this Part referred to as the ‘ actual consideration payable ’) under any arrangement to which this section applies exceeds the arm’s length amount, then the profits or gains or losses of the acquirer that are chargeable to tax under Case I or II of Schedule D shall be computed as if the arm’s length amount were payable instead of the actual consideration payable.

  • (b) If the amount of the consideration receivable (in this Part referred to as the ‘ actual consideration receivable’) under any arrangement to which this section applies is less than the arm’s length amount, then the profits or gains or losses of the supplier that are chargeable to tax under Case I or II of Schedule D shall be computed as if the arm’s length amount were receivable instead of the actual consideration receivable.

• (3) For the purposes of this section the ‘arm’s length amount’ in relation to an arrangement is the amount of the consideration that independent parties would have agreed in relation to the arrangement had those independent parties entered into that arrangement.

Principles for construing rules in accordance with OECD Guidelines.

835D.— (1) In this section—

‘Article 9(1) of the OECD Model Tax Convention’ means the provisions which, at the date of the passing of the Finance Act 2010, were contained in Article 9(1) of the Model Tax Convention on Income and Capital published by the OECD;

‘OECD’ means the Organisation for Economic Cooperation and Development;

‘transfer pricing guidelines’ means the guidelines approved on 13 July 1995 by the Council of the OECD (in this definition referred to as the ‘OECD Council’) as its Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations—

- (*a*) supplemented by—

    - (i) the report on intangible property and services noted by the OECD Council on 11 April 1996,

    - (ii) the report on cost contribution arrangements noted by the OECD Council on 24 July 1997, and

    - (iii) such additional guidance, published by the OECD on or after the date of the passing of the *Finance Act 2010*, as may be designated by the Minister for Finance for the purposes of this Part by order made under subsection (3),

      and

- (*b*) modified by updates approved by the OECD Council on 16 July 2009.

• (2) For the purpose of computing profits or gains or losses chargeable to tax under Case I or II of Schedule D, this Part shall be construed to ensure, as far as practicable, consistency between—

  • (a) the effect which is to be given to section 835C, and

  • (b) the effect which, in accordance with the transfer pricing guidelines, would be given if double taxation relief arrangements incorporating Article 9(1) of the OECD Model Tax Convention applied to the computation of the profits or gains or losses, regardless of whether such double taxation relief arrangements actually apply,

  but this section shall not apply for the purposes of construing this Part to the extent that such application of the section would be contrary to the provisions of double taxation relief arrangements that apply to the computation of those profits or gains or losses.

• (3) The Minister for Finance may, for the purposes of this Part, by order designate any additional guidance referred to in paragraph (a)(iii) of the definition of ‘transfer pricing guidelines’ in subsection (1) as being comprised in the transfer pricing guidelines.

• (4) Every order made by the Minister for Finance under subsection (3) 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.

Small or medium-sized enterprise.

835E.— (1) This Part does not apply in computing for any chargeable period the profits or gains or losses of a person if that person is a small or medium-sized enterprise for that chargeable period.

• (2) For the purposes of this section ‘small or medium-sized enterprise’ means an enterprise which would fall within the category of micro, small and medium-sized enterprises as defined in the Annex to the Commission Recommendation (in this section referred to as the ‘Annex’) if—

  • (a) in the case of an enterprise which is in liquidation or administration, the rights of the liquidator or administrator (in that capacity) were left out of account when applying Article 3(3)(b) of the Annex in determining for the purposes of this Part whether—

    • (i) that enterprise, or

    • (ii) any other enterprise (including that of the liquidator or administrator),

    is a small or medium-sized enterprise,

  • (b) Article 3 of the Annex had effect with the omission of paragraph 5 of that Article,

  • (c) the first sentence of Article 4(1) of the Annex had effect as if the data to apply to—

    • (i) the headcount of staff, and

    • (ii) the financial amounts,

    were the data relating to the chargeable period referred to in subsection (1) (instead of the period described in the said first sentence of Article 4(1) of the Annex) and calculated on an annual basis, and

  • (d) Article 4 of the Annex had effect with the omission of the following provisions—

    • (i) the second sentence of paragraph 1 of that Article,

    • (ii) paragraph 2 of that Article, and

    • (iii) paragraph 3 of that Article.

    Document-ation and enquiries.

    835F.— (1) A relevant person in relation to an arrangement to which section 835C(1) applies shall have available such records as may reasonably be required for the purposes of determining whether, in relation to the arrangement, the income of the person chargeable to tax under Case I or II of Schedule D has been computed in accordance with this Part.

• (2) The records referred to in subsection (1) shall be prepared on a timely basis and subsection (3) of section 886 shall apply to such records as it applies to records required by that section.

• (3) Sections 900 and 901 shall apply to records referred to in subsection (1) as if they were books, records or documents within the meaning of section 900 and as if the reference to an authorised officer in section 900 were a reference to an authorised officer within the meaning of section 835A(1).

• (4) Notwithstanding any other provisions of the Tax Acts, enquiries relating to compliance with this Part may only be initiated by an authorised officer.

Elimination of double counting.

835G.— (1) Where—

- (*a*) the profits or gains or losses of a person (in this section referred to as the ‘ first-mentioned person’), that are chargeable to tax under Case I or II of Schedule D, are, by virtue of section 835C, computed as if, instead of the actual consideration payable or receivable under the terms of an arrangement, the arm’s length amount in relation to that arrangement were payable or receivable as the case may be, and

- (*b*) the other party (in this section referred to as the ‘affected person’) to the arrangement is within the charge to tax under Schedule D in respect of the profits or gains or losses arising from the relevant activities,

  then, subject to subsections (2) and (3), on the making of a claim by the affected person, the profits or gains or losses of the affected person arising from the relevant activities that are chargeable to tax under Schedule D shall be computed as if, instead of the actual consideration receivable or payable by the affected person under the terms of the arrangement, the arm’s length amount (determined in accordance with section 835C) in relation to that arrangement were receivable or payable as the case may be.

• (2)

  • (a) Subsection (1) shall not affect the credits to be brought into account by the affected person in respect of closing trading stocks, for any chargeable period.

  • (b) For the purposes of this subsection ‘trading stock’, in relation to a trade, has the same meaning as it has for the purposes of section 89.

• (3) Subsection (1) shall not apply in relation to an arrangement unless and until the tax due and payable by the first-mentioned person for the chargeable period, in respect of which the profits or gains or losses are, by virtue of section 835C, computed as if, instead of the actual consideration payable or receivable under the terms of an arrangement, the arm’s length amount in relation to that arrangement were payable or receivable, as the case may be, has been paid.

• (4) Where the profits or gains of an affected person are reduced by virtue of subsection (1) then the amount of foreign tax (if any) for which relief may be given under any double taxation relief arrangements or paragraph 9DA or 9FA of Schedule 24 shall be reduced by the amount of foreign tax which would not be or have become payable if, for the purposes of that tax, instead of the actual consideration payable or receivable under the terms of any arrangement to which subsection (1) applies, the arm’s length amount (determined in accordance with section 835C) in relation to that arrangement were payable or receivable by the affected person as the case may be.

• (5)

  • (a) Where, in relation to an arrangement—

    • (i) the persons, who apart from this paragraph would be the affected person and the first-mentioned person, are members of the same group,

    • (ii) the arrangement is comprised of activities within the meaning of paragraph (a) of the definition of ‘excepted operations’ in section 21A, and

    • (iii) the persons referred to in subparagraph (i) jointly elect that this section shall apply,

    then section 835C and this section shall not apply in relation to that arrangement.

  • (b) An election under paragraph (a) shall be made by notice in writing to the inspector on or before the specified return date for the chargeable period (within the meaning of section 950) for the chargeable period of the person who, apart from paragraph (a), would be the first-mentioned person, and the notice shall set out the facts necessary to show that the persons referred to in paragraph (a)(i) are entitled to make the election.

• (6) Any adjustments required to be made by virtue of this section may be made by the making of, or the amendment of, an assessment.

Capital allowances.

835H.— Section 835C shall not apply in computing any deductions or additions to be made in taxing a trade under the provisions of the Tax Acts which relate to allowances and charges in respect of capital expenditure.”.

• (2) This section applies for chargeable periods beginning on or after 1 January 2011 in relation to any arrangement (within the meaning of section 835A(1) (inserted by this section) of the Principal Act) other than any such arrangement the terms of which are agreed before 1 July 2010.

Chapter 5 Corporation Tax

43. Intangible assets, etc.

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

• (a) in section 288(3C) by substituting “10 years” for “15 years”,

• (b) in section 291—

• (i) in subsection (1) by substituting “Subject to subsection (3), where a person carrying on a trade has incurred” for “Where a person carrying on a trade incurs”, and

• (ii) in subsection (2)—

• (I) by substituting “Subject to subsection (3), in any case where” for “In any case where”,

• (II) in paragraph (a) by substituting “has incurred” for “incurs”, and

• (III) in paragraph (b) by substituting “having incurred” for “incurring”,

• (c) in section 291 by inserting the following after subsection (2):

• “(3) Subject to subsection (4), where the person is a company, this section shall operate as if computer software or a right to use or otherwise deal with computer software were construed as being any such software or any such right—

  • (a) which is provided for computer systems or processes or computer operated machinery or equipment for use in the operation of the trade carried on by the company, and

  • (b) (i) the provision of which does not limit or restrict the person from whom the company acquired the software or the right in—

    • (I) the use of that software or exercise of that right, or

    • (II) the provision of that software or granting of that right to other persons,

    or

    • (ii) which is not provided for activities of managing, developing or exploiting that software or that right for the purposes of receiving a royalty or other sum in respect of the use of that software or the exercise of that right by other persons.

• (4)

  • (a) Subject to paragraph (b), where a company elects in writing, subsection (3) shall not apply to expenditure, specified in the election, incurred by it after 4 February 2010 and before 4 February 2012 on computer software or on a right to use or otherwise deal with computer software.

  • (b) An election under paragraph (a) shall be made in the return required to be made under section 951 for the accounting period of the company in which the expenditure is incurred and shall not be made later than 12 months from the end of the accounting period in which the capital expenditure, giving rise to the claim, is incurred.”,

• (d) in section 291A(1) in the definition of “specified intangible asset” by inserting the following after paragraph (c):

• “(ca) computer software or a right to use or otherwise deal with computer software other than such software or such right construed in accordance with section 291(3),”,

• (e) in section 291A(1) in the definition of “specified intangible asset” by inserting the following after paragraph (f):

• “(fa) any application for the grant or registration of anything within paragraphs (a) to (f),”,

• (f) in section 291A(1) in the definition of “specified intangible asset” by substituting the following for paragraph (g):

• “(g) secret processes or formulae or other secret information concerning industrial, commercial or scientific experience, whether protected or not by patent, copyright or a related right, including know-how within the meaning of section 768,”,

• (g) in section 291A(1)(h) by inserting “, but this paragraph does not relate to a licence within the meaning of section 2 of the Intoxicating Liquor Act 2008” after “intended”,

• (h) in section 291A(2) by substituting “has incurred” for “incurs”,

• (i) in section 291A(3)—

• (i) in paragraph (a) of the construction of “A” in the formula in that subsection by substituting “amortisation and any impairment” for “amortisation or depreciation”, and

• (ii) in the construction of “B” in the formula in that subsection by substituting “amortisation and any impairment” for “amortisation or depreciation”,

and

• (j) in section 291A(5) by substituting the following for paragraph (a):

• “(a) In relation to the activities of a company carried on as part of a trade—

  • (i) the whole of such activities, if any, that—

    • (I) comprise the sale of goods or services which are goods or services that derive the greater part of their value from, or

    • (II) consist of managing, developing or exploiting,

    a specified intangible asset or specified intangible assets in respect of which allowances under this Chapter have been made to the company, and

  • (ii) such parts of other such activities, if any, being parts that—

    • (I) consist of managing, developing or exploiting such assets, or

    • (II) contribute to the value of goods or services by using such assets,

    are referred to in paragraph (b) as ‘relevant activities’ and shall be treated for the purposes of the Tax Acts, other than any provisions of those Acts relating to the commencement or cessation of a trade, as a separate trade (in paragraph (b) and subsection (6) referred to as a ‘relevant trade’) which is distinct from any other trade or part of a trade carried on by the company.”.

• (2)
• (a) Paragraphs (a) to (f) and (h) to (j) of subsection (1) apply to expenditure incurred by a company after 4 February 2010.

• (b) Paragraph (g) of subsection (1) has effect as respects any allowance to be made for an accounting period commencing on or after 1 January 2010.

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

44.— (1) The Principal Act is amended by substituting the following for Schedule 4A:

“SCHEDULE 4A

TABLE

(Class of Technology)	(Description)	(Minimum Amount)
(1)	(2)	(3)
Motors and Drives	Motor: An 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 electric 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
Information and Communications Technology (ICT)	High Efficiency Enterprise ICT Hardware and Software: ICT infrastructure hardware or software systems for business applications specifically designed to achieve very high levels of energy efficiency and that meet specified efficiency criteria. Energy Saving ICT Cooling: Equipment designed to achieve very high operational cooling efficiency and that meet specified efficiency criteria. Advanced ICT Electrical Management: Systems for power switching control with the aim of achieving optimal energy efficiency, and that meet specified efficiency criteria.	€1,000
Heating and Electricity Provision	Advanced Heating and Electricity Generation: Equipment for generating heat or electricity or both, with the resulting energy stream intended primarily for on-site use and that meet specified efficiency criteria. Energy Saving Control Systems: Systems specifically designed to maximise energy efficiency of new or existing efficient heating or electricity generation equipment or both and that meet specified efficiency criteria.	€1,000
Process and Heating, Ventilation and Air-conditioning (HVAC) Control Systems	Efficient Heat Conservation and Recovery: Equipment or systems or both specially designed to control, conserve or recover any generated heating and cooling energy and that meet specified efficiency criteria. Advanced Liquid and Gas Handling Equipment: Equipment for energy-efficient on-site transfer of liquid or gas or both, meeting specified efficiency criteria. Includes very high efficiency pumps, fans, blowers and other liquid/gas handling equipment.	€1,000
Electric and Alternative Fuel Vehicles	Electric Vehicles and Associated Charging Equipment: Electric and part electric vehicles with a motor size >1kW, and relevant required charging equipment, that meet specified efficiency criteria. Alternative Energy Vehicle Conversions: Equipment for the conversion to 100% bio-fuel for existing commercial diesel vehicles, that meet specified efficiency criteria.	€1,000
Refrigeration and Cooling Systems	Efficient Industrial Refrigeration and Cooling: Equipment specifically designed to achieve very high operational refrigeration or cooling efficiencies in industrial and commercial applications and that meet specified efficiency criteria. Energy Saving Control Systems: Systems specifically designed to maximise the energy efficiency of new or existing efficient refrigeration or cooling equipment and that meet specified efficiency criteria.	€1,000
Electro-mechanical Systems	Advanced Industrial Electro-mechanical equipment: Direct electrically powered mechanical equipment designed to achieve very high operational efficiencies in industrial applications and that meet specified efficiency criteria. Energy Saving Electrical Management Systems: Systems specifically designed to maximise the energy efficiency of new or existing efficient electrically powered equipment and that meet specified efficiency criteria.	€1,000
Catering and Hospitality Equipment	High Efficiency Catering Equipment: Equipment for commercial catering applications specifically designed to achieve very high levels of energy efficiency and that meet specified efficiency criteria. Energy Saving Laundry Solutions: Commercial laundry equipment specifically designed to operate at very high efficiencies and that meet specified efficiency criteria.	€1,000

”.

• (2) This section comes into operation on such day as the Minister for Finance may by order appoint.

45. Amendment of section 486C (relief from tax for certain start-up companies) of Principal Act.

45.— (1) Section 486C of the Principal Act is amended—

• (a) in subsection (1)(a) by inserting the following definition before the definition of “EEA Agreement”:

“ ‘ Commission Regulation (EC) No. 1998/2006 ’ means Commission Regulation (EC) No. 1998/2006 of 15 December 2006 ⁵ on the application of Articles 86 and 87 of the Treaty to de minimis aid;”,

• (b) in subsection (2)(a)—

• (i) by inserting “or 2010” after “2009”,

• (ii) by deleting “or” at the end of subparagraph (iii), and

• (iii) in subparagraph (iv) by substituting “section 441, or” for “section 441.”,

• (c) in subsection (2)(a), by inserting the following after subparagraph (iv):

• “(v) the activities of which form part of an undertaking to which subparagraphs (a) to (h) of Article 1 of Commission Regulation (EC) No. 1998/2006 apply.”,

and

• (d) by inserting the following after subsection (11):

• “(12) Notwithstanding any obligation to maintain secrecy or any other restriction on the disclosure of information imposed by or under statute or otherwise, the Revenue Commissioners or any officer authorised by them for the purposes of this subsection may—

  • (a) disclose to any board established by statute, any public or local authority or any other agency of the State (in this paragraph referred to as a ‘relevant body’) information relating to the amount of relief granted to a company under this section, being information which is required by the relevant body concerned for the purpose of ensuring that the ceilings on aid set out in Commission Regulation (EC) No. 1998/2006 are not exceeded, and

  • (b) provide to the European Commission such information as may be requested by the European Commission in accordance with Article 3 of Commission Regulation (EC) No. 1998/2006.”.

• (2) This section has effect in relation to accounting periods beginning on and from 1 January 2009.

46. Unilateral relief (royalty income).

46.— (1) The Principal Act is amended in Schedule 24—

• (a) in paragraph 4(5)(a) by substituting “paragraphs 9D and 9DB” for “paragraph 9D”,

• (b) in paragraph 4(5)(b)—

• (i) in subclause (iii) by deleting “and”, and

• (ii) in subclause (iv) by inserting “, and” after “that paragraph)”,

• (c) in paragraph 4(5)(b) by inserting the following after subclause (iv):

• “(v) the amount of income of a company treated for the purposes of paragraph 9DB as referable to an amount of relevant royalties (within the meaning of that paragraph),”,

and

• (d) by inserting the following after paragraph 9DA:

“Unilateral Relief (royalty income)

9DB. (1) (a) In this paragraph—

‘relevant foreign tax’, in relation to royalties receivable by a company, means tax—

• (i) which under the laws of any foreign territory has been deducted from the amount of the royalty,

• (ii) which corresponds to income tax or corporation tax,

• (iii) which has not been repaid to the company,

• (iv) for which credit is not allowable under arrangements, and

• (v) which, apart from this paragraph, is not treated under this Schedule as reducing the amount of income;

‘relevant royalties’ means royalties receivable by a company—

• (i) which fall to be taken into account in computing the trading income of a trade carried on by the company, and

• (ii) from which relevant foreign tax is deducted;

‘royalties’ means payments of any kind as consideration for—

• (i) the use of, or the right to use—

  • (I) any copyright of literary, artistic or scientific work, including cinematograph films and software,

  • (II) any patent, trade mark, design or model, plan, secret formula or process,

  or

• (ii) information concerning industrial, commercial or scientific experience.

• (b) For the purposes of this paragraph—

  • (i) the amount of corporation tax which apart from this paragraph would be payable by a company for an accounting period and which is attributable to an amount of relevant royalties shall be an amount equal to 12.5 per cent of the amount by which the amount of the income of the company referable to the amount of the relevant royalties exceeds the relevant foreign tax, and

  • (ii) the amount of any income of a company referable to an amount of relevant royalties in an accounting period shall, subject to paragraph 4(5), be taken to be such sum as bears to the total amount of the trading income of the company for the accounting period before deducting any relevant foreign tax the same proportion as the amount of relevant royalties in the accounting period bears to the total amount receivable by the company in the course of the trade in the accounting period.

• (2) Where, as respects an accounting period of a company, the trading income of a trade carried on by the company includes an amount of relevant royalties, the amount of corporation tax which, apart from this paragraph, would be payable by the company for the accounting period shall be reduced by so much of 87.5 per cent of any relevant foreign tax borne by the company in respect of relevant royalties in that period as does not exceed the corporation tax which would be so payable and which is attributable to the amount of the relevant royalties.

• (3)

  • (a) This paragraph shall not apply as respects any accounting period of a company which is a relevant accounting period within the meaning of section 442.

  • (b) Subsection (2) of section 442 shall apply for the purposes of this paragraph as it applies for the purposes of Part 14.”.

• (2) This section applies in respect of royalties received on or after 1 January 2010.

47. Carry forward of unrelieved foreign tax.

47.— (1) Schedule 24 to the Principal Act is amended in paragraph 9FA—

• (a) in subparagraph (2)(b) by substituting “subparagraphs (3) and (4)” for “subparagraph (3)”, and

• (b) by inserting the following after subparagraph (3):