Finance Act 2012

Type Act

Publication 2012-03-31

State In force

Source Irish Statute Book

articles 141

(ii) the lesser of the amount transferred to the ARF at the time the benefit crystallisation event occurred and the value of the assets in the ARF at the date of the exercise of the encashment option (in this paragraph referred to as the ‘encashment date’),

(iii) the lesser of the amount transferred to the AMRF at the time the benefit crystallisation event occurred and the value of the assets in the AMRF at the encashment date, or

(iv) the lesser of the value of the assets retained in the vested PRSA at the time the benefit crystallisation event occurred and the value of the assets in the vested PRSA at the encashment date,

B has the meaning assigned to it in the formula in the definition of ‘restricted tax-free lump sum’ in subsection (6)(c)(i) as if in that meaning a reference to specified amount were a reference to other specified amount,

and

C is the amount crystallised by the benefit crystallisation events under the scheme.

(16) (a) Any deemed encashment amount shall be charged to income tax under Case IV of Schedule D.

(b) The relevant manager shall deduct income tax from the deemed encashment amount at the higher rate for the tax year in which the encashment option is exercised and remit it to the Collector-General in accordance with subsection (10).

(c) Paragraphs (a) to (c) of subsection (9) shall apply to a deemed encashment amount regarded as income of the relevant individual under subsection (14)(c) or (15)(c) and charged to income tax in accordance with paragraph (a).

(d) (i) The deduction of income tax by a relevant manager in accordance with paragraph (b) shall include a deduction for a deemed encashment amount in respect of a tax-free lump sum paid under the rules of the private sector scheme from which the assets were, in whole or in part, transferred to the ARF or the AMRF or, as the case may be, in the case of a scheme that is a PRSA, within which the assets were retained in whole or in part.

(ii) (I) In so far as income tax has been charged under subsection (3)(a)(i) or (3)(b)(i)(I) of section 790AA on an excess lump sum (within the meaning of subsection (1)(e) of that section) (in this paragraph referred to as the ‘standard rate income tax’) in respect of a lump sum referred to in subparagraph (i) and deducted by and remitted to the Collector-General by the administrator of the private sector scheme in accordance with subsection (8) of that section, the income tax to be deducted by the relevant manager from the deemed encashment amount in respect of the lump sum shall, where the condition in subparagraph (iii) is met, be reduced by the amount of the standard rate income tax, and

(II) where a deemed encashment amount in respect of a tax-free lump sum has been calculated in accordance with the formula in subsection (15), then in so far as standard rate income tax has been charged in respect of the lump sum, the income tax to be deducted by the relevant manager from the deemed encashment amount shall, where the condition in subparagraph (iii) is met, be reduced by an amount of income tax equivalent to the amount determined by that formula if ‘A’ in the formula was the amount of the standard rate income tax.

(iii) The condition referred to in clauses (I) and (II) of subparagraph (ii) is that the relevant manager obtains from the administrator of the private sector scheme a certificate giving the information set out in paragraphs (a) to (e) of subsection (2) of section 787RA.

(iv) Where income tax on a deemed encashment amount is reduced by an amount of standard rate income tax in accordance with clause (I) or (II) of subparagraph (ii), that amount of standard rate income tax shall not be available for the purposes of section 787RA.

(v) Subsection (6) of section 787R shall, with any necessary modifications, apply to a relevant manager who obtains a certificate under subparagraph (ii) as if the reference in that subsection to a declaration, or declarations, were a reference to a certificate, or certificates, to which subparagraph (ii) applies.

(17) The tax required to be deducted by the relevant manager under subsection (16) shall be satisfied out of the funds in the ARF, the AMRF or, as the case may be, the vested PRSA beneficially owned by the relevant individual and the individual shall allow such deduction and where there are no funds or insufficient funds available out of which the relevant manager may satisfy the tax required to be deducted, the amount of such tax for which there are insufficient funds available (in this section referred to as the ‘unpaid tax’) shall be discharged in accordance with subsection (18).

(18) (a) The unpaid tax referred to in subsection (17) shall be deemed to be tax on a chargeable excess in respect of the relevant individual and shall be paid and remitted to the Collector-General by the administrator of the relevant individual’s public sector scheme at the time of the occurrence of the first benefit crystallisation event in respect of the individual in relation to that scheme and the amount so paid shall be a debt due to the administrator from the individual, or where the individual is deceased, from his or her estate.

(b) The administrator referred to in paragraph (a) shall be reimbursed by the relevant individual for the payment of the unpaid tax that is deemed to be tax on a chargeable excess in the manner provided for in paragraphs (a) and (b) of section 787Q(7).

(c) The deemed tax on a chargeable excess referred to in paragraph (a) shall not be tax on a chargeable excess for any other purpose of this Chapter.

(19) (a) Where an encashment option is exercised in relation to a private sector scheme of a relevant individual in circumstances where a tax-free lump sum was paid and the remainder of that individual’s accrued rights under the scheme were applied by way of—

(i) the purchase of an annuity for the individual, or

(ii) the payment of a pension to the individual from the scheme, or

(iii) the transfer to the individual under the rules of the scheme of an amount on the exercise of an option by the individual under section 772(3A)(a) or 784(2A) and taxed in accordance with section 784(2B) (or, as the case may be, taxed in accordance with that section by virtue of section 772(3B)), or an amount transferred to the individual at the time assets of the PRSA are first made available from the PRSA and taxed in accordance with section 787G(1),

then income tax charged under subsection (16)(a) on the deemed encashment amount in relation to the tax-free lump sum shall be chargeable to tax at the higher rate for the tax year in which the encashment option is exercised and the encashment tax so charged shall, subject to paragraph (c), be deemed to be unpaid tax for the purposes of subsection (18) and discharged in accordance with that subsection as if the reference in paragraph (b) of that subsection to paragraphs (a) and (b) of section 787Q(7) were a reference only to paragraph (b) of section 787Q(7).

(b) Subparagraphs (ii) and (iv) of paragraph (d) of subsection (16) shall, with any necessary modifications, apply to encashment tax referred to in paragraph (a), where the relevant individual obtains from the administrator of the private sector scheme a certificate giving the information set out in paragraphs (a) to (e) of subsection (2) of section 787RA.

(c) Subsection (6) of section 787R shall, with any necessary modifications, apply to a relevant individual who obtains a certificate under paragraph (b) as if the reference in that subsection to a declaration, or declarations, were a reference to a certificate, or certificates, to which paragraph (b) applies.

(20) Where a benefit crystallisation event has occurred in relation to a relevant individual under a private sector scheme in respect of which an encashment option is exercised and the benefit crystallisation event has resulted in the individual being the beneficial owner of the assets in an ARF, an AMRF or, as the case may be, a vested PRSA (in this subsection referred to as the ‘fund’), then where the exercise of the option was in respect of—

(a) the whole of the private sector scheme, the value of the assets in the fund, or

(b) a part of the private sector scheme, the value of the assets in the fund that are deemed to be an encashment amount in accordance with subsection (15),

shall for the purposes of this Part no longer be regarded as assets held in an ARF, an AMRF or, as the case may be, a vested PRSA from the date of the exercise of the option.

(21) Where an encashment option is exercised in respect of a relevant individual the encashment amount or, as the case may be, the deemed encashment amount shall not be—

(a) a benefit crystallisation event for the purposes of this Chapter and Schedule 23B and where that amount relates to a private sector scheme in respect of which one or more than one benefit crystallisation event has occurred before the exercise of the option such benefit crystallisation events or, as the case may be, the portion of such benefit crystallisation events represented by the amount of ‘B’ in the formula in subsection (15)(b), shall be disregarded for the purposes of this Chapter and Schedule 23B,

(b) used by the relevant individual as a contribution to, or the payment of a premium under, a relevant pension arrangement, and

(c) regarded under the provisions of Chapter 2 or 2A as a distribution from an ARF or an AMRF or, as the case may be, as the making available to, or paying to, a PRSA contributor of assets of that amount or value from a PRSA.

(22) Where an encashment option is exercised in respect of a relevant individual in relation to a private sector scheme in respect of which one or more than one benefit crystallisation event has occurred in the relevant period and the deemed encashment amount is the amount of the tax-free lump sum paid or, as the case may be, a part of the tax-free lump sum paid, that amount, or that part, shall be disregarded in determining an excess lump sum (within the meaning of subsection (1)(e) of section 790AA) in respect of a lump sum (within the meaning of that section) that is paid to that individual on or after 8 February 2012.

(23) (a) The persons liable for income tax charged in accordance with subsection (8) or (16) shall be the relevant individual and the administrator of the private sector scheme, the relevant manager referred to in subsection (16) or, as the case may be, the administrator of the public sector scheme referred to in subsection (18) and their liability shall be joint and several.

(b) A person liable for income tax charged in accordance with subsection (8) or (16) shall be so liable whether or not that person or any other person who is liable for the charge is resident or ordinarily resident in the State.”.

(8) Chapter 4 of Part 30 of the Principal Act is amended by inserting the following after section 790C:

“Imputed distribution from certain funds.

790D.— (1) In this section—

‘additional voluntary PRSA contributions’ has the meaning assigned to it by section 787A(1);

‘approved minimum retirement fund’ has the meaning assigned to it by section 784C and for the purposes of this section the expression ‘AMRF’ shall be construed accordingly;

‘approved retirement fund’ has the meaning assigned to it by section 784A and for the purposes of this section the expression ‘ARF’ shall be construed accordingly;

‘contributor’ has the meaning assigned to it by section 787A;

‘excluded distributions’ means one or more of the following:

(a) a specified amount regarded as a distribution or the making available of PRSA assets under subsection (4);

(b) a payment, transfer or assignment of the assets of an ARF to another ARF the beneficial owner of the assets in which is the individual who is beneficially entitled to the assets in the first-mentioned ARF, whether or not the payment, transfer or assignment is made to the individual;

(c) a transaction regarded as a distribution for the purposes of section 784A by virtue of subsection (1A) of that section;

(d) a transfer referred to in section 784C(5)(a);

(e) assets made available from a PRSA, being assets of a kind referred to in section 787G(3);

(f) the circumstances set out in section 787G(4A) in which a PRSA administrator is treated as making assets of a PRSA available to an individual;

(g) a distribution made for the purpose set out in section 784A(3A);

‘other manager’, in relation to an individual who has a relevant fund, means a person, other than the nominee, that is—

(a) a qualifying fund manager,

(b) a PRSA administrator, or

and which manages or administers, as the case may be, on the specified date—

(i) one or more than one ARF,

(ii) one or more than one vested PRSA, or

(iii) one or more than one ARF and one or more than one vested PRSA,

the assets in which are beneficially owned by the individual;

‘Personal Retirement Savings Account’ has the meaning assigned to it by section 787A and for the purposes of this section the expression ‘PRSA’ shall be construed accordingly;

‘PRSA administrator’ has the meaning assigned to it by section 787A;

‘qualifying fund manager’ has the meaning assigned to it by section 784A;

‘relevant distributions’, in relation to an individual, means the aggregate of the amount or value of—

(a) the distributions, if any, made during the tax year by a qualifying fund manager in respect of assets held in—

(i) an ARF, or, as the case may be, ARFs the assets of which are beneficially owned by the individual and managed by that qualifying fund manager, and

(ii) an AMRF, if any, the assets of which are beneficially owned by the individual and managed by that qualifying fund manager, (in this paragraph referred to as the ‘funds’) being funds the assets in which were first accepted into the funds by the qualifying fund manager on or after 6 April 2000,

and

(b) the assets, if any, that a PRSA administrator makes available to, or pays to, the individual or to any other person during the tax year from one or more than one vested PRSA that is beneficially owned by that individual and administered by that PRSA administrator,

less the aggregate of the amount or value of any excluded distributions made during the tax year in respect of assets which are beneficially owned by the individual;

‘relevant fund’ means all of the—

(a) ARFs, and

(b) vested PRSAs,

beneficially owned by the same individual on the specified date other than ARFs the assets in which were first accepted into the funds by the qualifying fund manager before 6 April 2000;

‘specified amount’, for a tax year, means an amount equivalent to the amount determined by the formula—

(A B) - C

100

where the amount so determined is greater than zero and where—

A is the value (in this section referred to as the ‘relevant value’) of the assets in a relevant fund on the specified date, excluding, where appropriate, the value of assets retained by the PRSA administrator as would be required to be transferred to an AMRF if the beneficial owner of the PRSA had opted in accordance with section 787H(1),

B is—

(i) 5, where the relevant value is not greater than €2,000,000, or

(ii) 6, where the relevant value is greater than €2,000,000,

and

C is the amount or value of relevant distributions, if any, made in the tax year;

‘specified date’ means 30 November in the tax year;

‘tax year’ means a year of assessment for income tax purposes;

‘vested PRSA’ means—

(a) a PRSA in respect of which assets of the PRSA have been made available to, or paid to, the PRSA contributor or to any other person, by the PRSA administrator on or after 7 November 2002, other than assets of a kind referred to in paragraphs (b), (c) and (d) of section 787G(3), and for the purposes of this definition the provisions of subsections (4) and (4A) of section 787G shall apply, and

(b) in the case of a PRSA that is a PRSA to which an individual is or was the contributor of additional voluntary PRSA contributions, such a PRSA where benefits become payable to the individual under the main scheme on or after 7 November 2002.

(2) For the purposes of this section, references to the value of an asset in a relevant fund shall, except where the asset is cash, be construed as a reference to the market value of the asset within the meaning of section 548.

(3) This section applies for any tax year in which an individual—

(a) has a relevant fund, and

(b) is aged 60 years or over for the whole of that tax year.

(4) Subject to the other provisions of this section, the specified amount shall for the purposes of subsections (3) and (7)(b) of section 784A or, as the case may be, subsections (1) and (2) of section 787G be regarded as—

(a) where the relevant fund comprises one or more than one ARF, a distribution of that amount from an ARF,

(b) where the relevant fund comprises one or more than one vested PRSA, the making available to, or paying to, the PRSA contributor of assets of that amount or value from a PRSA,

(i) the qualifying fund manager and the PRSA administrator of each ARF and of each PRSA concerned are the same person, a distribution of that amount from an ARF,

(ii) the nominee appointed in accordance with subsection (5) is a qualifying fund manager, a distribution of that amount from an ARF,

(iii) the nominee appointed in accordance with subsection (5) is a PRSA administrator, the making available to, or paying to, the PRSA contributor of assets of that amount or value from a PRSA, or

(iv) the nominee appointed in accordance with subsection (5) is both a qualifying fund manager and a PRSA administrator, a distribution of that amount from an ARF,

not later than the second month of the tax year following the tax year in respect of which the specified amount is determined.

(5) Where—

(a) an individual has a relevant fund and—

(i) the relevant value is €2,000,000 or less,

(ii) the relevant fund comprises—

(I) more than one ARF, or

(II) more than one vested PRSA, or

(III) one or more than one ARF and one or more than one vested PRSA,

and

(iii) in relation to each such relevant fund the qualifying fund manager of each ARF concerned and the PRSA administrator of each vested PRSA concerned are not the same person,

(b) where an individual has a relevant fund and the relevant value is greater than €2,000,000 and subparagraphs (ii) and (iii) of subsection (a) apply,

then the individual referred to in paragraph (a) may, and the individual referred to in paragraph (b) shall, appoint one of those persons (in this section referred to as the ‘nominee’) for the purposes of this section.

(6) Where an individual appoints a nominee in accordance with subsection (5) the individual shall—

(i) inform the other manager or the other managers, as the case may be, of such appointment for the purposes of this section,

(ii) where the appointment under subsection (5) is compulsory, advise the other manager or the other managers, as the case may be, of that fact, and

(iii) provide the other manager or the other managers, as the case may be, with the full name, address and telephone number of the nominee.

(7) Where an individual appoints a nominee in accordance with subsection (5)—

(a) the other manager or the other managers, as the case may be, shall within 14 days of the specified date provide the nominee with a certificate for that tax year stating the aggregate value (subject to paragraph (b)) of the assets on that date in, and the relevant distributions from—

(i) the ARF or ARFs, or

(ii) the vested PRSA or vested PRSAs, or

(iii) the ARF or ARFs and the vested PRSA or vested PRSAs,

managed or administered by the other manager or the other managers,

(b) the aggregate value of the assets referred to in paragraph (a) shall, where the assets are in one or more than one vested PRSA, exclude the value of such assets, if any, retained by the PRSA administrator as would be required to be transferred to an AMRF if the beneficial owner of the PRSA had opted in accordance with section 787H(1), and

(c) the nominee shall keep and retain for a period of 6 years each certificate so provided and on being so required by notice given to the nominee in writing by an officer of the Revenue Commissioners, make available within the time specified in the notice such certificates as may be required by the notice.

(8) Where an individual appoints a nominee in accordance with subsection (5) and the nominee receives a certificate or, as the case may be, certificates provided in accordance with subsection (7)(a), from the other manager or from one or more of the other managers, the specified amount shall be determined by the nominee as if the value of the assets and the relevant distributions stated in each certificate so received were the value of assets in and relevant distributions from an ARF or a vested PRSA managed or administered by the nominee in that tax year.

(9) Where an individual appoints a nominee in accordance with subsection (5) in respect of a relevant fund of a kind referred to in paragraph (a) of that subsection and—

(a) the nominee does not receive a certificate referred to in subsection (7)(a) from the other manager, or

(b) the nominee does not receive a certificate referred to in subsection (7)(a)—

(i) from any of the other managers, or

(ii) from any one or more of the other managers, but not all of them,

then—

(I) where paragraph (a) or (b)(i) applies, the nominee and the other manager or, as the case may be, the nominee and each of the other managers, and

(II) where paragraph (b)(ii) applies, each of the other managers in respect of which the nominee has not received a certificate,

(in this subsection referred to as the ‘relevant manager’) shall determine the specified amount in accordance with this section as if the relevant fund of the individual was comprised solely, as the case may be, of—

(A) the ARF or ARFs,

(B) the vested PRSA or vested PRSAs, or

managed or administered by the relevant manager.

(10) Where an individual appoints a nominee in accordance with subsection (5) in respect of a relevant fund of a kind referred to in paragraph (b) of that subsection and paragraph (a) or (b) of subsection (9) applies, the specified amount shall be determined in accordance with subsection (9) as if B in the formula for the specified amount was 6.

(11) Where an individual has a relevant fund of a kind referred to in subsection (5)(a) and the individual opts not to appoint a nominee as provided for in that subsection, then each person who on the specified date is—

(a) a qualifying fund manager,

(b) a PRSA administrator, or

of one or more than one ARF, one or more than one vested PRSA or, as the case may be, one or more than one ARF and one or more than one vested PRSA comprised in that relevant fund shall determine the specified amount in accordance with this section as if the relevant fund was comprised solely, as the case may be, of—

(i) the ARF or ARFs,

(ii) the vested PRSA or vested PRSAs, or

(iii) the ARF or ARFs and the vested PRSA or vested PRSAs,

managed or administered by each such person.”.

(9) (a) Subsection (1) other than paragraph (d) shall be taken to have effect from 6 February 2011.

(b) Paragraphs (a) to (c) of subsection (3) have effect from 1 January 2012.

(c) Paragraph (d) of subsection (1), subsection (2), paragraphs (d) and (e) of subsection (3), subsections (4) to (6) and paragraph (b) of subsection (7)have effect from 8 February 2012.

(d) Paragraph (f) of subsection (3) has effect from the date of passing of this Act.

(e) Paragraph (a) of subsection (7) has effect from 1 January 2011.

(f) Subsection (8) has effect for the year of assessment 2012 and subsequent years of assessment.

Chapter 4 Income Tax, Corporation Tax and Capital Gains Tax

19. Amendment of section 176 (purchase of unquoted shares by issuing company or its subsidiary) of Principal Act.

19.— (1) Section 176 of the Principal Act is amended in subsection (1)(b)(i) by substituting the following for clause (I):

“(I) on or before 31 October in the year in which inheritance tax is due to be paid in accordance with section 46(2A) of the Capital Acquisitions Tax Consolidation Act 2003 in respect of a taxable inheritance (within the meaning of section 11 of that Act) of the company’s shares taken by that person, a liability to inheritance tax in respect of that inheritance, or”.

(2) This section applies as on and from 8 February 2012.

20. Farm taxation.

20.— The Principal Act is amended—

(a) by inserting the following after section 664:

“Relief for increase in carbon tax on farm diesel.

664A.— (1) In this section—

‘accounting period’, in relation to a person, means—

(a) where the person is a company, an accounting period determined in accordance with section 27, or

(b) where the person is not a company, a period of one year ending on the date to which the accounts of the person are usually made up,

but, where accounts have not been made up or where accounts have been made up for a greater or lesser period than one year, the accounting period shall be such period not exceeding one year as the Revenue Commissioners may determine;

‘carbon tax’ means the carbon charge referred to in section 96(1A) (inserted by section 64(1)(f) of the Finance Act 2010) of the Finance Act 1999;

‘farm diesel’ means the mineral oil described as ‘other heavy oil’ in Schedule 2A to the Finance Act 1999 used by a person in the carrying on of a trade of farming, but does not include such oil used for the purpose of home heating;

‘relevant carbon tax’ means an amount equivalent to the amount determined by the formula—

A - B

where—

A is the amount of the carbon tax included in a deduction in respect of farm diesel in the computation by a person of the amount of the profits or gains of that person to be charged to tax under Case I of Schedule D, and

B is the amount of the carbon tax that would have been included in that deduction if the amount of the carbon tax had been calculated at the rate of €41.30 per 1,000 litres of farm diesel.

(2) Where—

(a) a person carries on in an accounting period a trade of farming in respect of which the person is within the charge to tax under Case I of Schedule D, and

(b) in the computation of the amount of the profits or gains of that trade the person is, apart from this section, entitled to any deduction on account of farm diesel,

then such person shall be entitled in that computation to a further deduction for farm diesel of an amount equal to the relevant carbon tax.”,

(b) in paragraph 1(k) of the Table to section 667B by substituting “Horsemanship;” for “Horsemanship.”,

“(l) Level 6 Specific Purpose Certificate in Farm Administration.”,

and

(d) by inserting the following after section 667B:

“Special provisions for registered farm partnerships.

667C.— (1) In this section—

‘qualifying farmer’ has the meaning assigned to it by section 667B;

‘registered farm partnership’ means a milk production partnership within the meaning of the European Communities (Milk Quota) Regulations 2008 (S.I. No. 227 of 2008).

(2) Subject to subsection (3), where a person is a partner in a registered farm partnership, section 666 shall apply as if in that section—

(a) in subsection (1) ‘50 per cent’ were substituted for ‘25 per cent’, and

(b) the following was substituted for subsection (4)—

‘(4) (a) A deduction shall not be allowed under this section in computing a company’s trading income for any accounting period which ends after 31 December 2015.

(b) Any deduction allowed by virtue of this section in computing the profits or gains of a trade of farming for an accounting period of a person other than a company shall not apply for any purpose of the Income Tax Acts for any year of assessment later than the year 2015.’.

(3) Where a person referred to in subsection (2) is a qualifying farmer, section 667B shall apply for the purposes of this section as if in subsection (5)(a) of that section ‘50 per cent’ were substituted for ‘25 per cent’.

(4) This section shall not apply for any accounting period which ends before 1 January 2012 or ends after 31 December 2015.

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

21. Amendment of Schedule 13 (accountable persons for purposes of Chapter 1 of Part 18) to Principal Act.

21.— Schedule 13 to the Principal Act is amended—

(a) by deleting paragraphs 136, 143, 153 and 170,

(b) by substituting the following for paragraph 177:

“177. Irish Bank Resolution Corporation Limited.”,

“178. Central Bank of Ireland.”,

and

(d) by inserting the following after paragraph 187:

“188. Health and Social Care Professional Council.”.

22. Relevant contracts tax.

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

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

“(c) the installation, alteration or repair in any building or structure of systems of heating, lighting, air-conditioning, soundproofing, ventilation, power supply, drainage, sanitation, water supply, or burglar or fire protection,”,

(b) in section 530(1) by substituting the following for paragraph (ca) in the definition of “construction operations”:

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

“ ‘deduction summary’, in relation to a return period, means a statement (adjusted as appropriate in accordance with regulations made under this Chapter) which the Revenue Commissioners cause to be issued to a registered principal setting out, in summary form—

(a) details in respect of each relevant payment notified by that principal under section 530C which is, in accordance with regulations made under this Chapter, the subject of a valid deduction authorisation at the time of issue of the deduction summary, and

(b) the aggregate amount of tax that is, based on the details referred to in paragraph (a), payable by the principal in respect of the return period,

and includes a statement to the effect that no such relevant payments were notified, where that is the case;”,

(d) in section 530(1) in the definition of “relevant contract”, by substituting “including persons in partnership” for “including a partnership in respect of which the principal has not received a relevant payments card”,

(e) in section 530(1) by inserting the following after the definition of “subcontractor”:

“ ‘technology systems failure’ means circumstances in which the electronic system put in place by the Revenue Commissioners for the efficient operation of this Chapter is not functioning or is not functioning properly at any particular time such that a person is unable to comply with an obligation under this Chapter or regulations made under this Chapter, or circumstances where a person concerned is unable to use the electronic system at any particular time because of a general or partial systems failure of an internet service provider or of an electricity service provider, occurring in the general locality of the person’s place of business;”,

(f) in section 530A(1) by deleting “or” where it last occurs in paragraph (f), by substituting “undertaking, or” for “undertaking.” in paragraph (g) and by inserting the following after paragraph (g):

“(h) a person who carries out the installation, alteration or repair in or on any building or structure of systems of telecommunications.”,

(g) in section 530B(1) by substituting the following for paragraph (a):

“(a) information in relation to—

(i) the identity of the subcontractor, including name and tax reference number,

(ii) the estimated contract value,

(iii) the estimated contract duration, including the estimated start date and estimated end date of the contract,

(iv) the location or locations at which relevant operations under the contract are to take place, and

(v) whether or not a contract is a labour only contract,”,

(h) in section 530B by inserting the following after subsection (1):

“(1A) (a) Before providing the information and declaration referred to in subsection (1), a principal shall be satisfied as to the identity of the subcontractor concerned.

(b) For the purposes of paragraph (a), a principal shall require documentary evidence of identity from the subcontractor and shall make and retain a copy of the documentary evidence provided, or record and retain relevant details from the documentary evidence given.”,

(i) in section 530B by substituting the following for subsection (4):

“(4) The Revenue Commissioners shall make regulations for the purposes of this section and such regulations may—

(a) specify the manner by which principals shall communicate electronically with the Revenue Commissioners,

(b) in the case of a labour only contract, provide for the submission of additional information in relation to the contract,

(c) provide for the issuing of an acknowledgement by the Revenue Commissioners to a principal following notification by the principal of a contract under subsection (1) and for the manner by which such acknowledgement may issue,

(d) provide for notification to a subcontractor by the Revenue Commissioners of details of a contract, including changes to the terms of a contract, in respect of which a principal has notified the Revenue Commissioners under subsection (1) that the subcontractor is a party and for the manner by which such notification may issue,

(e) provide for notification to the Revenue Commissioners by a principal of changes to the terms of a contract which has been notified under subsection (1),

(f) provide for a principal to notify a subcontractor where the Revenue Commissioners are unable to verify the identity of the subcontractor by reference to the name and tax reference number supplied to the Revenue Commissioners by the principal under subsection (1), and

(g) provide for any other related matters.”,

(j) in section 530C by substituting the following for subsection (3):

“(3) The Revenue Commissioners shall make regulations for the purposes of this section and such regulations may—

(a) specify the manner by which principals shall communicate electronically with the Revenue Commissioners,

(b) provide for the details to be supplied by a principal in relation to a payment referred to in subsection (1),

(c) specify the circumstances in which and the means by which a principal may cancel a notification given under subsection (1),

(d) specify the circumstances in which notification under this section is deemed not to have been given,

(e) provide for notification to a subcontractor where a payment notification is cancelled, and

(f) provide for any other related matters.”,

(k) in section 530D by substituting the following for subsection (5):

“(5) The Revenue Commissioners shall make regulations for the purposes of this section and such regulations may—

(a) specify the manner by which the Revenue Commissioners shall communicate electronically with a principal,

(b) provide for the circumstances in which a deduction authorisation shall be valid and for the period of validity of a deduction authorisation,

(d) specify the obligations on a principal to ensure that a deduction summary accurately reflects the details of all relevant payments made, and tax deducted, by a principal in a return period, and

(e) provide for any other related matters.”,

(l) in section 530E(1) by substituting the following for paragraph (c):

“(c) shall be 35 per cent where the Revenue Commissioners have made a determination that the subcontractor is a person to whom neither section 530G nor section 530H apply, and

(d) shall, in the case of a partnership, be the highest rate that would apply to any of the individual partners following a determination by the Revenue Commissioners under section 530I.”,

(m) in section 530F(2) by substituting the following for paragraph (b):

“(b) without prejudice to any other penalty to which the principal may be liable and without prejudice to section 1078, be liable to a penalty of €5,000 or the amount of the tax payable under paragraph (a), whichever is the lesser.”,

(n) in section 530F(3) by substituting the following for paragraph (a):

“(a) Where subsection (2)(a) applies and the principal submits the details of the relevant payment in a return for the relevant return period by the due date for the return and, if appropriate, provides the Revenue Commissioners with such details, in relation to the relevant contract in respect of which the relevant payment was made, as may be required by the Revenue Commissioners, the Revenue Commissioners shall establish the amount of tax that would have been due from the principal in respect of that payment had the rate of tax been the rate of tax last notified by the Revenue Commissioners to the subcontractor concerned under section 530I and, notwithstanding the provisions of subsection (2)(a), the tax due from the principal in respect of that payment by virtue of that subsection shall be the amount so established.”,

(o) in section 530F(3) by inserting the following after paragraph (b):

“(c) The amount of the penalty under subsection (2)(b) shall be calculated without reference to any adjustment of the tax due as a result of the application of paragraph (a).”,

(p) in section 530F by substituting the following for subsection (4):

“(4) Where, in making a relevant payment to a subcontractor, a principal deducts tax from the payment, the principal shall—

(a) provide the subcontractor with a copy of the deduction authorisation related to that payment, or

(b) arrange for the following details from the deduction authorisation to be given to the subcontractor by written or electronic means:

(i) the name and tax reference number of the principal,

(ii) the name and tax reference number of the subcontractor,

(iii) the gross amount of the payment, including the amount of tax deducted,

(iv) the amount of tax deducted,

(v) the rate at which tax was deducted,

(vi) the date of the payment, and

(vii) the unique reference number issued by the Revenue Commissioners on the deduction authorisation.”,

(q) in section 530F by inserting the following after subsection (6):

“(7) Where, due to a persistent technology systems failure, a principal is unable to give notification to the Revenue Commissioners under section 530C(1) and has no option but to make a relevant payment without complying with that provision, subsection (2) shall not apply to that payment if the principal—

(a) deducts tax from that payment at the rate last notified to the principal in respect of the subcontractor concerned, or if there was no such notification, deducts tax at a rate of 35 per cent from that payment,

(b) immediately upon rectification of the technology systems failure notifies the Revenue Commissioners, in accordance with this Chapter or regulations made under this Chapter, that the payment has been made,

(d) pays the tax deducted in accordance with paragraph (a) to the Revenue Commissioners on or before the due date for the making of a return for the period within which the principal notifies the Revenue Commissioners under paragraph (b).

(8) Where a principal complies with the requirements of subsection (7)—

(a) the principal shall be deemed to have deducted tax from a relevant payment in accordance with the terms of a valid deduction authorisation, and

(b) for the purposes of section 530K, the payment shall be deemed to have been made in the return period in which the principal notifies the Revenue Commissioners under subsection (7)(b).

(9) A principal shall, on request, provide the Revenue Commissioners with information in relation to the circumstances and details of a persistent technology systems failure under subsection (7).”,

(r) in section 530G(2) by substituting the following for paragraph (a):

“(a) engaged in the business of carrying out relevant contracts in partnership unless the partnership business itself has complied with the obligations referred to in subsection (1) and the Revenue Commissioners are satisfied that it will continue to comply with those obligations,”,

(s) in section 530H(3) by substituting the following for paragraph (a):

“(a) a person engaged in the business of carrying out relevant contracts in partnership unless the partnership business itself has complied with the obligations referred to in subsection (1) and the Revenue Commissioners are satisfied that it will continue to comply with those obligations, or”,

(t) in section 530H by inserting the following after subsection (3):

“(4) This section also applies to a person who satisfies the Revenue Commissioners that, in all the circumstances, the matter or matters referred to in subsection (1), (2) or (3), which would otherwise cause such person not to be a person to whom this section applies, ought to be disregarded for the purposes of this section.”,

(u) in section 530I by substituting the following for subsection (2):

“(2) Following a determination under subsection (1), the Revenue Commissioners shall notify the subcontractor of the determination and the rate of tax resulting from such determination.”,

(v) in section 530I by inserting the following after subsection (3):

“(4) The Revenue Commissioners shall not be obliged to make a determination under subsection (1)—

(a) until after a period of 30 days has elapsed following the previous determination made by the Revenue Commissioners in respect of a subcontractor,

(b) if an appeal by a subcontractor is awaiting determination under subsection (3), or

(w) in section 530J by substituting the following for subsection (3):

“(3) The Revenue Commissioners shall make regulations for the purposes of this section and such regulations may provide for—

(a) keeping and maintaining the register,

(b) registration and time for registration,

(c) the particulars to be submitted to the Revenue Commissioners for the purposes of registering a person as a principal,

(d) notification of change in relevant details,

(e) notification of cessation as a principal,

(f) cancellation of registration,

(g) the use of electronic means in connection with the registration process, and

(h) any other related matters.”,

(x) in section 530K by substituting the following for subsection (2):

“(2) (a) For the purposes of subsection (1), where the Revenue Commissioners issue, under section 530D(3), a deduction summary to a principal for a return period, the details on that summary shall, for the purposes of the Tax Acts, be deemed to be a return made by the principal to the Collector-General in respect of the return period and the amount of tax specified on that summary shall be deemed to be the amount specified by the principal of his or her tax liability under this Chapter in respect of that return period.

(b) Paragraph (a) does not apply where a principal is required to amend the details on a deduction summary in accordance with regulations made under this section and to submit a return under subsection (1) in accordance with those amended details, and so submits the required return.”,

(y) in section 530K by substituting the following for subsection (5):

“(5) The Revenue Commissioners shall make regulations for the purposes of this section and such regulations may provide for—

(a) the manner by which principals shall communicate electronically with the Revenue Commissioners,

(b) the particulars to be included in the return required under this section,

(c) the obligations on, and the actions to be taken by, a principal to ensure that any relevant payment made by a principal relating to a return period and the tax liability related to that payment are accurately reflected on the return required under this section,

(d) notification to a subcontractor in relation to actions taken by a principal as referred to in paragraph (c), and

(e) any other related matters.”,

(z) in section 530M by substituting the following for subsection (1):

“(1) Notwithstanding the requirements of section 530K(1), and without prejudice to any penalty to which the principal may be liable, a principal may, as appropriate—

(a) make a return required under section 530K(1) after the due date relating to the relevant return period, or

(b) amend a return after the making of the return or the deemed making of a return under section 530K(2) but—

(i) no amendment may be made in relation to any payment which has been the subject of a deduction authorisation under section 530D, and

(ii) no amendment may be made to a return where a Revenue officer has commenced an audit or other investigation in relation to the tax affairs of the principal to whom the return relates for the chargeable period in which the return period falls.”,

(aa) in section 530M by substituting the following for subsection (5):

“(5) The Revenue Commissioners shall make regulations for the purposes of this section and such regulations may provide for—

(a) the manner by which principals shall communicate electronically with the Revenue Commissioners,

(b) the particulars to be included in a return under this section,

(c) the actions to be taken by a principal to ensure that any relevant payment made by a principal relating to a return period and the tax liability related to that payment are accurately reflected on a return under this section,

(d) the format of a return which can be made in a case where a principal is appealing an assessment under section 530N, and

(e) any other related matters.”,

(ab) by substituting the following for section 530P:

“Treatment of deducted tax.

530P.— (1) Where a principal deducts tax from a payment to a subcontractor in accordance with section 530F, such tax shall be treated as a payment on account by the subcontractor—

(a) of income tax for that tax year, where the tax was deducted in the basis period for a tax year, or

(b) of corporation tax for that accounting period, where the tax was deducted in an accounting period of a company.

(2) For the purposes of this Chapter, tax treated in accordance with subsection (1) shall be known as deducted tax.

(3) (a) Deducted tax shall be available for offset by the Revenue Commissioners against other tax liabilities of a subcontractor and in this subsection ‘tax’ has the same meaning as in section 960A.

(b) The Revenue Commissioners shall notify a subcontractor of the amount of deducted tax, if any, which is offset against other tax liabilities of the subcontractor.

(4) Where an assessment to income tax or, as the case may be, corporation tax has been made in relation to a subcontractor for a chargeable period, then deducted tax related to that period less any amount which is either—

(a) required to meet the income tax or, as the case may be, corporation tax liability of the subcontractor, or

(b) offset against other tax liabilities of the subcontractor under subsection (3),

may, subject to section 865, be repaid to the subcontractor.

(5) No repayment of deducted tax shall be made, except in accordance with subsection (4).

(6) No amount of deducted tax shall be treated as a payment on account, set off or refunded more than once and no amount of deducted tax set off under subsection (3) or refunded under subsection (4) shall be treated as a payment on account.”,

(ac) in section 530R(1) by inserting “, and the provisions of section 530P shall, with any necessary modifications, apply” after “them”,

(ad) in section 530R by substituting the following for subsection (2):

“(2) Except where the principal concerned makes a separate payment to each member of the gang or group, a person authorised by the gang or group, or in the case of a partnership, the precedent partner, shall, in respect of tax deducted from relevant payments to the gang or group, give to the Revenue Commissioners—

(a) the name, address and tax reference number of every person in the gang or group, and

(b) details of the proportion of the tax deducted to which each person, named by virtue of this provision, is entitled.”,

(ae) in section 530S by substituting the following for subsection (1):

“(1) Before giving a notification to the Revenue Commissioners under section 530C, a principal shall obtain from the subcontractor concerned a statement setting out appropriate details of the work giving rise to the payment, and the cost of the work, and such statement shall bear the subcontractor’s name, business address and tax reference number.”,

(af) in section 530S(4) by substituting the following for paragraph (b):

“(b) Each subcontractor shall keep and maintain—

(i) a copy of each deduction authorisation supplied by a principal under section 530F(4)(a), or

(ii) a copy of any details given under section 530F(4)(b).”,

(ag) in section 530V by substituting the following for subsection (1):

“(1) Regulations made under this Chapter may contain such incidental, supplemental or consequential provisions as appear to the Revenue Commissioners to be necessary or expedient—

(a) to enable persons to fulfil their obligations under this Chapter or under regulations made under this Chapter, or

(b) to give effect to the proper implementation and efficient operation of the provisions of this Chapter or regulations made under this Chapter.

(1A) Regulations made under this Chapter shall be laid before Dáil Éireann as soon as may be after they are made and, if a resolution annulling those regulations is passed by Dáil Éireann within the next 21 days on which Dáil Éireann has sat after the regulations are laid before it, the regulations shall be annulled accordingly, but without prejudice to the validity of anything previously done under them.

(1B) (a) Anything required to be done by a principal under this Chapter or under regulations made under this Chapter may be done by another person acting under the authority of the principal.

(b) Where anything is done by such other person under the authority of the principal, this Chapter shall apply as if it had been done by the principal.

(c) Anything purporting to have been done by or on behalf of a principal shall for the purposes of this Chapter be deemed to have been done by the principal or by the principal’s authority, as the case may be, unless the contrary is proved.”,

and

(ah) in section 530V by substituting the following for subsection (3):

“(3) Anything to be done by or under this Chapter by the Revenue Commissioners, other than the making of regulations, may be done by any Revenue officer or may, if appropriate, be done through such electronic systems as the Revenue Commissioners may put in place for the time being for any such purpose.”.

(2) This section comes into operation on and from the passing of this Act.

23. Amendment of section 482 (relief for expenditure on significant buildings and gardens) of Principal Act.

23.— Section 482 of the Principal Act is amended in subsection (5) by inserting the following after paragraph (b):

“(ba) Where qualifying expenditure is incurred after 8 February 2012, the 40 days referred to in paragraph (b)(ii)(I)(B) shall, in relation to the chargeable period in which expenditure is incurred, include the days which comprise National Heritage Week, as designated for each year by the Heritage Council, to the extent that it falls within the period referred to in paragraph (b)(ii)(I).”.

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

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

(a) in subsection (1) by inserting the following definition after the definition of “authorised officer”:

“ ‘director’ shall be construed in accordance with section 433(4);”,

(b) in subsection (1), in the definition of “relevant investment”, by substituting “qualifying company,” for “qualifying company.”,

“ ‘specified relevant person’ means any director or secretary of the qualifying company.”,

(d) in subsection (2A)(g)(v) by substituting “subsection (2CA)” for “subsection (2C)(ba)”,

(e) in subsection (2C)(b) by substituting “subject to subsection (2CA),” for “subject to paragraph (ba),”,

(f) in subsection (2C) by deleting paragraph (ba),

(g) in subsection (2C) by deleting “and” before paragraph (d),

(h) in subsection (2C)(d) by substituting “fulfilled,” for “fulfilled.”,

(i) in subsection (2C) by inserting the following after paragraph (d):

“and

(e) if any sum representing—

(i) a repayment of a relevant investment, or

(ii) an amount in connection with a relevant investment, out of the proceeds of exploiting the film—

is paid to an allowable investor company or qualifying individual, as the case may be, before the Revenue Commissioners have notified the company in writing that a compliance report, as referred to in paragraph (d)(iii), has been received by them.”,

(j) by inserting the following after subsection (2C):

“(2CA) (a) Paragraph (b) of subsection (2C) shall not apply to financial arrangements in relation to a transaction, or series of transactions, where such arrangements have been approved by the Revenue Commissioners.

(b) The Revenue Commissioners shall not approve financial arrangements, to which paragraph (b) of subsection (2C) would, but for this subsection, apply unless:

(i) the arrangements relate to either or both—

(I) an investment made in a qualifying film, and

(II) the filming of part of a film in a territory other than a territory referred to in clause (I) or (II) of subsection (2C)(b)(i),

(ii) a request for approval is made by the qualifying company to the Revenue Commissioners before such arrangements are effected,

(iii) the qualifying company demonstrates to the satisfaction of the Revenue Commissioners that it can provide, if requested, sufficient records to enable the Revenue Commissioners to verify—

(I) in the case of an investment, the amount of the investment made in the qualifying company and the person who made the investment, and

(II) in the case of filming in a territory, the amount of each item of expenditure on the production of the qualifying film expended in the territory, whether expended by the qualifying company or by any other person,

and

(iv) they are satisfied that it is appropriate to grant such approval.

(c) In considering whether to grant an approval under this subsection in relation to financial arrangements, the Revenue Commissioners may seek any information they consider appropriate in relation to the arrangements or in relation to any person who is, directly or indirectly, a party to the arrangements.

(d) Where the Revenue Commissioners have approved financial arrangements in accordance with this subsection, no amount of money expended, either directly or indirectly, as part of the arrangements may be regarded, for the purposes of subsection (2A)(g)(iv), as an amount of money expended on either the employment of eligible individuals or on the provision of goods, services and facilities as referred to in that subsection.”,

(k) in subsection (2E)(m) by substituting “subsection (2CA)” for “subsection (2C)(ba)”, and

(l) by inserting the following after subsection (2E):

“(2F) Where a qualifying company fails to provide to the Revenue Commissioners a compliance report as referred to in subsection (2C)(d)(iii), within the time provided for in regulations made under subsection (2E)(h), the specified relevant person shall provide such compliance report to the Revenue Commissioners within 2 months after that time.”.

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

25.— Section 486B(1) of the Principal Act is amended in the definition of “qualifying period” by substituting “31 December 2014” for “31 December 2011”.

26. Income tax relief for investment in corporate trades — employment and investment incentive and seed capital scheme.

26.— (1) Part 16 of the Principal Act (as amended by section 33(1)(a) of the Finance Act 2011 (No. 6 of 2011)) is amended in section 494(3)—

(a) in paragraph (a)(i) by substituting “and which carries on relevant trading activities from a fixed place of business in the State, or” for “where those activities are principally carried on in the State, or”,

(b) in paragraph (a)(ii) by substituting the following for clause (II):

“(II) both the holding of such shares or securities or the making of such loans and the carrying on of relevant trading activities where relevant trading activities are carried on from a fixed place of business in the State.”,

and

(2) Section 33 of the Finance Act 2011 is amended by substituting the following for subsection (2):

“(2) (a) Subject to paragraphs (b) and (c), this section has effect in respect of shares issued on or after 25 November 2011.

(b) This section does not have effect in respect of shares issued before 25 November 2011 and, for all the purposes of Part 16 of the Principal Act in connection with those shares, the Principal Act has effect as if this section had not been enacted.

(c) This section does not have effect in respect of shares issued on or after 25 November 2011 and on or before 31 December 2011 where—

(i) the company issuing the shares, or

(ii) where the shares are acquired by an investment fund, the fund acquiring the shares,

elects by notice in writing to the Revenue Commissioners on or before 31 December 2011 that, for all the purposes of Part 16 of the Principal Act in connection with those shares, the Principal Act has effect as if this section had not been enacted.”.

27. Amendment of Part 29 (patents, scientific and certain other research, know-how and certain training) of Principal Act.

27.— (1) Part 29 of the Principal Act is amended in Chapter 2—

(a) in section 766(1)(a) by deleting “and”, where it last occurs, in subparagraph (IA) of paragraph (iii) of the definition of “expenditure on research and development” and by inserting after that clause—

“(IB) expenditure on research and development shall not include—

(A) except as provided for in subparagraphs (vii) and (viii) of subsection (1)(b), any amount paid to another person to carry on research and development activities, or

(B) expenditure incurred by a company in the management or control of research and development activities where such activities are carried on by another person,

and ‘in the carrying on by it of research and development activities’ shall be construed accordingly, and”,

(b) in section 766(1)(a) by inserting the following after the definition of “group expenditure on research and development”:

“ ‘key employee’ has the meaning ascribed to it by section 472D;”,

(c) in section 766(1)(a) in the definition of “qualifying group expenditure on research and development” by deleting “means an amount equal to the excess of the amount of group expenditure on research and development in relation to a relevant period over the threshold amount in relation to the relevant period;” and substituting the following:

“shall be determined by the following formula—

A + B

where—

A is so much of the amount of group expenditure on research and development in relation to a relevant period as does not exceed €100,000, and

B is the amount equal to the excess of the amount of group expenditure on research and development in relation to the relevant period over the threshold amount in relation to the relevant period,

but the amount of qualifying group expenditure on research and development in relation to a relevant period shall not exceed the amount of group expenditure on research and development in relation to that relevant period;”,

(d) in section 766(1)(a) by inserting the following after the definition of “research and development centre”:

“ ‘specified amount’ means an amount—

(i) paid by the Revenue Commissioners in accordance with subsection (4B) of this section or section 766A(4B), as the case may be, or

(ii) surrendered in accordance with subsection (2A),

and a claim in respect of a specified amount shall be construed accordingly;”,

(e) in section 766(1)(b)(v) by deleting “by or through the State, any board established by statute, any public or local authority or any other agency of the State;” and substituting the following:

“by or through—

(I) the State or another relevant Member State, or

(II) any board established by statute, any public or local authority or any other agency of the State or another relevant Member State;”,

(f) in section 766(1)(b)(vii) by deleting “5 per cent of that expenditure shall be treated as if it were expenditure incurred by the company on the carrying on by it of research and developing activities;” and substituting “the greater of 5 per cent of that expenditure or €100,000, shall, to the extent that it does not exceed the expenditure referred to in clause (I), be treated as if it were expenditure incurred by the company in the carrying on by it of research and development activities;”,

(g) in section 766(1)(b) by substituting the following for sub-paragraph (viii):

“(viii) where in any period a company—

(I) incurs expenditure on research and development, and

(II) pays a sum (not being a sum referred to in clause (II) of subparagraph (vii)) to a person, other than to a person who is connected (within the meaning of section 10) with the company, in order for that person to carry on research and development activities, and notifies that person in writing that the payment is a payment to which this clause applies and that the person may not make a claim under this section in respect of such research and development activities,

then, so much of the sum so paid as does not exceed the greater of 10 per cent of that expenditure or €100,000, shall, to the extent that it does not exceed the expenditure referred to in clause (I), be treated as if it were expenditure incurred by the company in the carrying on by it of research and development activities and expenditure incurred by that other person in connection with the activities referred to in clause (II) shall not be expenditure on research and development;”,

(h) in section 766(2) by deleting “Where” and substituting “Subject to subsection (2A) where”,

(i) by inserting the following after section 766(2):

“(2A) (a) Subject to paragraph (c), where as respects any accounting period a company is entitled to reduce the corporation tax of that accounting period by an amount, in accordance with subsection (2), the company may instead on making a claim in that behalf to the appropriate inspector surrender all or part of that amount to one or such number of key employees as the company may specify but the aggregate of such amounts, attributable to such employees, may not exceed the amount so surrendered.

(b) The part of that amount that may be surrendered by the company may not exceed the corporation tax of the accounting period, which would be chargeable, if no claim could be made in accordance with subsection (2).

(c) A company may not make a claim under this subsection where, at the time of making such a claim the company has a liability (within the meaning of section 960H) in respect of the corporation tax of the accounting period referred to in subsection (2) or a previous accounting period.

(d) A claim in accordance with this subsection shall be made in such form as the Revenue Commissioners may prescribe and the company shall notify the key employee, in writing, of any amount surrendered to that employee.

(2B) Where as respects any accounting period a company makes a claim under subsections (2) and (2A) and in accordance with that claim—

(a) the corporation tax of an accounting period is reduced and an amount is surrendered, and

(b) either or both the amount so reduced or surrendered, as the case may be, is subsequently found not to have been as is authorised by this section,

then, the amount which is not so authorised shall be first attributable to a claim under subsection (2) in priority to a claim under subsection (2A).

(2C) Where in respect of an accounting period, a company makes a claim under subsection (2A) and it is subsequently found that the amount surrendered in accordance with that claim (hereafter in this section referred to as the ‘initial amount’) is not as authorised by this section, then, in relation to each key employee, the amount surrendered, which is authorised by this section, shall be an amount (hereafter in this section referred to as the ‘relevant authorised amount’) determined by the formula—

A B

where—

A is the portion of the initial amount attributable to that key employee in accordance with the claim under subsection (2A),

B is the aggregate amount that may be surrendered by the company for that accounting period as is authorised by this section, and

C is the initial amount,

and the company shall notify the key employee in writing of the relevant authorised amount.”,

(j) by inserting the following after section 766(4B):

“(4C) Where a company (in this section and section 766A referred to as the ‘predecessor’) which has made a claim in accordance with this section ceases to carry on a trade which includes the carrying on by it of research and development activities and another company (in this section and section 766A referred to as the ‘successor’) commences to carry on the trade and those research and development activities (the cessation and commencement referred to in this section and section 766A as the ‘event’) and—

(a) both the predecessor and successor were, at the time of the event, members of the same group of companies within the meaning of section 411(1), and

(b) on or at any time within 2 years after the event the trade and the research and development activities are not carried on otherwise than by the successor,

then the successor may, to the extent that the predecessor has not used an amount to reduce the corporation tax of an accounting period in accordance with subsection (2), surrendered an amount in accordance with subsection (2A) or made a claim under subsection (4A) or (4B), carry forward any excess that the predecessor would have been entitled to carry forward in accordance with subsection (4).”,

(k) by substituting the following for subsection 766(7B):

“(7B) (a) Any amount payable by the Revenue Commissioners to the company or another company by virtue of subsection (4B) shall be deemed to be an overpayment of corporation tax, for the purposes only of section 960H(2).

(b) Any claim in respect of a specified amount shall be deemed for the purposes of section 1077E to be a claim in connection with a credit and, for the purposes of determining an amount in accordance with section 1077E(11) or 1077E(12), a reference to an amount of tax that would have been payable for the relevant periods by the person concerned shall be read as if it were a reference to a specified amount.

(c) Where a company makes a claim in respect of a specified amount and it is subsequently found that the claim is not as authorised by this section or by section 766A, as the case may be, then the company may be charged to tax under Case IV of Schedule D for the accounting period in respect of which the payment was made or the amount surrendered, as the case may be, in an amount equal to 4 times so much of the specified amount as is not so authorised.

(d) Where in accordance with paragraph (c) an inspector makes an assessment in respect of a specified amount, the amount so charged shall for the purposes of section 1080 be deemed to be tax due and payable and shall carry interest as determined in accordance with subsection (2)(c) of section 1080 as if a reference to the date when the tax became due and payable were a reference to the date the amount was paid by the Revenue Commissioners, or a reference to the date the corporation tax of the company for the accounting period in respect of which the amount was surrendered, was payable, as the case may be.”,

(l) in section 766A(1)(a) by inserting the following after the definition of “specified relevant period”:

“ ‘specified time’ in relation to a building or structure means the period of 10 years commencing at the beginning of the accounting period in which the predecessor incurs relevant expenditure on that building or structure;”,

(m) in section 766A(1)(b)(i) by deleting “by the State;” and substituting the following:

“by or through—

(I) the State or another relevant Member State, or

(II) any board established by statute, any public or local authority or any other agency of the State or of another relevant Member State;”,

(n) in section 766A(3) by deleting “then the company” and substituting “then, subject to subsection (3A), the company”, and

(o) by inserting the following after subsection 766A(3):

“(3A) Where an event referred to in section 766(4C) occurs and—

(a) in connection with the event the predecessor transfers to the successor a building or structure in respect of which—

(i) the predecessor had made a claim under section 766A,

(ii) the transfer is a transfer to which section 617 applies, and

(iii) at the time of the transfer either or both the specified relevant period and the specified time had not expired,

(b) on, or at any time within 2 years after, the event, the trade and research and development activities are not carried on otherwise than by the successor, and

(i) in a case where the specified relevant period had not expired, would continue to be a qualifying building if a reference, in the definition of ‘qualifying building’ to activities carried on by the company were construed as a reference to activities carried on by the company and the successor, and

(ii) continues to be used by the successor throughout the remainder of the ‘specified time’ for the purposes of research and development activities,

then—

(I) subparagraphs (i) and (ii) of subsection (3) shall not apply in relation to the transfer by the predecessor,

(II) the successor may, to the extent that the predecessor has not used an amount to reduce the corporation tax of an accounting period in accordance with subsection (2) or made a claim under subsection (4A) or (4B) carry forward any excess that the predecessor would have been entitled to carry forward, in accordance with subsection (4), and

(III) subsection (3) shall have effect as if a reference to the company in subsection (3)(c) and thereafter in subsection (3) were a reference to the successor.”.

(2) (a) Paragraphs (f) and (g) shall apply to accounting periods ending on or after 1 January 2012.

(b) Except where otherwise provided this section applies to accounting periods commencing on or after 1 January 2012.

28. Life assurance policies and investment funds: rates.

28.— (1) The Principal Act is amended in section 730F(1)—

(a) by substituting the following for paragraph (a):

“(a) subject to paragraph (b), where the chargeable event falls on or after 1 January 2001, at the rate of—

(i) 25 per cent where the policyholder is a company, and

(ii) 33 per cent in the case of any other policyholder,”,

and

(b) in paragraph (b) by substituting “(S + 33) per cent” for “(S + 30) per cent”.

(2) The Principal Act is amended in section 730J—

(a) in paragraph (a)(i)(I) by substituting “30 per cent” for “27 per cent”,

(b) in paragraph (a)(i)(II)(A) by substituting “(S + 33) per cent” for “(S + 30) per cent”,

(d) in paragraph (a)(ii)(I) by substituting “(H + 30) per cent” for “(H + 27) per cent”.

(3) The Principal Act is amended in section 730K(1)—

(a) in paragraph (a) by substituting “(S + 33) per cent” for “(S + 30) per cent”, and

(b) in paragraph (b) by substituting “33 per cent” for “30 per cent”.

(4) The Principal Act is amended in Chapter 1A of Part 27—

(a) in section 739D by substituting the following for subsection (5A):

“(5A) The amount referred to in subsection (2)(dd) is the amount determined—

(a) where the unit holder is a company, by the formula—

A x G x 100

100 - (G x 25)

and

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

A x G x 100

100 - (G x 33)

where in relation to the formula in paragraphs (a) and (b)—

A is the appropriate tax payable on the transfer by a unit holder of entitlement to a unit in accordance with subsection (2)(d), and

G is the amount of the gain on that transfer of that unit divided by the value of that unit.”,

(b) in section 739E(1) by substituting the following for paragraph (a):

“(a) subject to paragraph (ba), where the amount of the gain is provided by section 739D(2)(a), at the rate of—

(i) 25 per cent where the unit holder is a company, and

(ii) 30 per cent in any other case,”,

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

(i) 25 per cent where the unit holder is a company, and

(ii) 33 per cent in any other case,”,

(d) in section 739E(1)(ba) by substituting “(S + 33) per cent” for “(S + 30) per cent”,

(e) in section 739G(2)(c) by substituting “section 739E(1)(a)(i)” for “section 739E(1)(a)”, and

(f) in section 739G(2) by substituting the following for paragraph (e):

“(e) where the unit holder is a company, the payment is not a relevant payment and appropriate tax has been deducted from the payment, the amount received by the unit holder shall, subject to paragraph (g), be treated for the purposes of the Tax Acts as the net amount of an annual payment chargeable to tax under Case IV of Schedule D from the gross amount of which income tax has been deducted at the rate specified in section 739E(1)(b)(i),”.

(5) The Principal Act is amended in Chapter 4 of Part 27—

(a) in section 747D(a)(i)(I)(A) by substituting “(S + 33) per cent” for “(S + 30) per cent”,

(b) in section 747D(a)(i)(I)(B) by substituting “30 per cent” for “27 per cent”,

(d) in section 747D(a)(i)(II)(B) by substituting “33 per cent” for “30 per cent”,

(e) in section 747D(a)(ii)(I) by substituting “(H + 30) per cent” for “(H + 27) per cent”,

(f) in section 747E(1) by deleting paragraph (a),

(g) in section 747E(1)(b)(i) by substituting “(S + 33) per cent” for “(S + 30) per cent”, and

(h) in section 747E(1)(b)(ii) by substituting “33 per cent” for “30 per cent”.

(6) (a) Subsection (1) applies and has effect as respects the happening of a chargeable event in relation to a life policy (within the meaning of Chapter 5 of Part 26 of the Principal Act) on or after 1 January 2012.

(b) Subsection (2) applies and has effect as respects the receipt by a person of a payment in respect of a foreign life policy (within the meaning of Chapter 6 of Part 26 of the Principal Act) on or after 1 January 2012.

(c) Subsection (3) applies and has effect as respects the disposal in whole or in part of a foreign life policy (within the meaning of Chapter 6 of Part 26 of the Principal Act) on or after 1 January 2012.

(d) Subsection (4) applies and has effect as respects the happening of a chargeable event in relation to an investment undertaking (within the meaning of section 739B(1) of the Principal Act) on or after 1 January 2012.

(e) Paragraphs (a) to (e) ofsubsection (5) apply and have effect as respects the receipt by a person of a payment in respect of a material interest in an offshore fund (within the meaning of Chapter 4 of Part 27 of the Principal Act) on or after 1 January 2012.

(f) Paragraphs (f) to (h) of subsection (5) apply and have effect as respects the disposal in whole or in part by a person of a material interest in an offshore fund (within the meaning of Chapter 4 of Part 27 of the Principal Act) on or after 1 January 2012.

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

29.— Chapter 5 of Part 26 of the Principal Act is amended—

(a) in section 730D(2)(b)(vi) by substituting “any Court,” for “any Court, or”,

(b) in section 730D(2)(b) by inserting the following after sub-paragraph (vii):

“(viii) a pension scheme being an exempt approved scheme within the meaning of section 774 or a trust scheme to which section 784 or 785 applies, or

(ix) an approved retirement fund within the meaning of section 784A or an approved minimum retirement fund within the meaning of section 784C,”,

(d) in section 730E(3)(e) by inserting the following after sub-paragraph (vii):

“(viii) a pension scheme being an exempt approved scheme within the meaning of section 774 or a trust scheme to which section 784 or 785 applies, or

(ix) an approved retirement fund within the meaning of section 784A or an approved minimum retirement fund within the meaning of section 784C,”.

30. Undertakings for collective investment and unit holders.

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

(a) in section 738(2) by substituting the following for paragraph (b):

“(b) (i) Subject to subparagraph (ii), as respects an undertaking for collective investment which is a company, the corporation tax which is chargeable on its profits on which corporation tax falls finally to be borne for a chargeable period beginning on or after 8 February 2012 shall, for the purposes of the Tax Acts, be such tax, before it is reduced by any credit, relief or other reduction under those Acts, computed as if the rate of corporation tax were 30 per cent.

(ii) For the purposes of this paragraph, as respects an undertaking for collective investment which is a company, where an accounting period of the company begins before 8 February 2012 and ends on or after that date, it shall be divided into 2 parts, one beginning on the date on which the accounting period begins and ending on 7 February 2012, and the other beginning on 8 February 2012 and ending on the date on which the accounting period ends, and both parts shall be treated as if they were separate accounting periods of the company and the corporation tax for the chargeable period ending on 7 February 2012 shall be computed as if the rate of corporation tax were 20 per cent.”,

(b) in section 738(2)(d) by substituting the following for sub-paragraph (i):

“(i) the income tax which is chargeable on the income arising, and the capital gains tax which is chargeable on the chargeable gains accruing, in a year of assessment to the undertaking shall be the amount of such tax, before it is reduced by any credit, relief or other deduction under any provision, other than under this section, of the Tax Acts or the Capital Gains Tax Acts, which is the rate of 30 per cent of the income arising, and the chargeable gains accruing to the undertaking, but, in relation to the year of assessment commencing on 1 January 2012, payments made and gains realised in the period from 1 January 2012 to 7 February 2012 shall be chargeable to income tax or capital gains tax, as the case may be, at the rate of 20 per cent, and”,

(d) in section 739(2)(d), in the construction of “A”, by substituting “is 30” for “is the standard rate per cent for the year of assessment in which the payment is made”, and

(e) in section 739(4)(a)(i) by substituting “rate of 30 per cent” for “standard rate of income tax”.

(2) (a) Paragraphs (c) and (d) of subsection (1) apply as respects payments made on or after 8 February 2012.

(b) Paragraph (e) of subsection (1) applies as respects any disposal made on or after 8 February 2012.

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

31.— Section 739D of the Principal Act is amended—

(a) in subsection (7B)(a) and (b) by substituting “subsection (7) or (9), as the case may be,” for “subsection (7)” in each place, and

(b) by inserting the following after subsection (8D):

“(8E) (a) In this subsection—

‘relevant jurisdiction’ has the same meaning as in section 256F(1) of the Companies Act 1990;

‘scheme of migration’ means either of the following—

(i) a migrating company (within the meaning of section 256F of the Companies Act 1990) which holds an authorisation from the Central Bank of Ireland to carry on business in the State under Part XIII of that Act, and which authorisation has not been revoked, or

(ii) a unit trust which has migrated from a relevant jurisdiction and which holds an authorisation from the Central Bank of Ireland to carry on business in the State as an authorised unit trust scheme under the Unit Trusts Act 1990 or as a unit trust within the meaning of the relevant Regulations, and which authorisation has not been revoked.

(b) Where, under a scheme of migration, a company or a unit trust, as the case may be, comes within the definition of ‘investment undertaking’ in section 739B(1), the following provisions apply—

(i) subject to subparagraph (iii), a gain shall not be treated as arising to that investment undertaking on the happening of a chargeable event in respect of a unit holder holding units in that investment undertaking at the time of the scheme of migration, otherwise than in respect of a unit holder whose name is included in the schedule referred to in subparagraph (ii), where the investment undertaking, within 30 days of the scheme of migration taking place, forwards to the inspector or other officer of the Revenue Commissioners nominated under subsection (7B)(d), a declaration of a kind referred to in subparagraph (ii),

(ii) the declaration referred to in subparagraph (i) is a declaration in writing made and signed by the investment undertaking which—

(I) declares to the best of the investment undertaking’s knowledge and belief that at the time of the scheme of migration no units in that investment undertaking were held by a person who was resident in the State, other than the persons whose names and addresses are set out in the schedule to the declaration, and

(II) contains a schedule which sets out the name and address of each person who, at the time of the scheme of migration, was resident in the State,

and

(iii) a gain which, by virtue of subparagraph (i), would not otherwise be treated as arising to that investment undertaking on the happening of a chargeable event in respect of a unit holder shall nevertheless be treated as so arising where, immediately before the chargeable event, the investment undertaking is in possession of any information which would reasonably suggest that the unit holder is resident in the State.”.

32. Amendment of section 739G (taxation of unit holders in investment undertakings) of Principal Act.

32.— Section 739G(2) of the Principal Act is amended by substituting the following for paragraph (h):

“(h) the amount of a payment made to a unit holder—

(i) by an investment undertaking, or

(ii) arising from the transfer by way of sale, or otherwise, of an entitlement to a unit in an investment undertaking,

shall not be chargeable to income tax or capital gains tax where the unit holder is a company which is not resident in the State or the unit holder, not being a company, is neither resident nor ordinarily resident in the State,”.

33. Amalgamations of investment undertakings and offshore funds.

33.— Part 27 of the Principal Act is amended—

(a) in Chapter 1A by inserting the following after section 739H:

“Investment undertakings: amalgamations with offshore funds.

739HA.— (1) In this section—

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

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

‘offshore state’ has the same meaning as in section 747B(1);

‘scheme of amalgamation’ means an arrangement whereby the assets of an investment undertaking are transferred to an offshore fund of an offshore state in exchange for the issue by the offshore fund of an offshore state of a material interest in that offshore fund to each of the unit holders in the investment undertaking, in proportion to the value of the units held by each unit holder, and as a result of which the value of those units becomes negligible.

(2) The cancellation of units in an investment undertaking arising from an exchange in relation to a scheme of amalgamation shall not be a chargeable event and the amount invested by a unit holder for, and the date of, the acquisition of a material interest in an offshore fund of an offshore state under that scheme shall for the purposes of Chapter 4 be the amount invested by the unit holder for, and the date of, the acquisition of those units in the investment undertaking.”,

and

(b) in Chapter 4 by inserting the following after section 747F:

“Offshore funds: amalgamations with investment undertakings.

747FA.— (1) In this section—

‘investment undertaking’ has the same meaning as in section 739B(1);

‘scheme of amalgamation’ means an arrangement whereby the assets of an offshore fund are transferred to an investment undertaking in exchange for the issue by the investment undertaking of units to each of the persons who have a material interest in the offshore fund, in proportion to the value of that interest, and as a result of which the value of that interest becomes negligible.

(2) Where, in connection with a scheme of amalgamation, a person disposes of a material interest in an offshore fund and receives, in place of that interest, units in an investment undertaking, the disposal of the interest in the offshore fund shall not give rise to a gain but the units acquired in the investment undertaking under that scheme shall for the purposes of Chapter 1A be treated as acquired at the same time and at the same cost as the interest in the offshore fund.”.

34. Amendment of section 747E (disposal of an interest in offshore funds) of Principal Act.

34.— Section 747E of the Principal Act is amended—

(a) in subsection (1) by substituting “Subject to subsection (1A), where on or after” for “Where on or after”, and

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

“(1A) (a) In this subsection—

‘umbrella scheme’ means an offshore fund—

(i) which is divided into a number of sub-funds, and

(ii) in which each person who has a material interest in a sub-fund is entitled to exchange the whole or part of such interest for an interest in another sub-fund of the offshore fund.

(b) A disposal under subsection (1) does not include any exchange by a person who has a material interest in a sub-fund of an offshore fund which is an umbrella scheme, effected by way of a bargain made at arm’s length by that offshore fund, of the whole or part of such interest for an interest in another sub-fund of that offshore fund.

(c) Any exchange referred to in paragraph (b) shall not be regarded as a disposal by a person of a material interest in an offshore fund which is an umbrella scheme.”.

35. Scheme of migration and amalgamation.

35.— Section 739D of the Principal Act is amended in subsection (8D)—

(a) in paragraph (a) by substituting the following for the definition of “scheme of migration and amalgamation”:

“ ‘scheme of migration and amalgamation’ means an arrangement whereby the assets of an offshore fund are transferred to an investment undertaking in exchange for the issue by the investment undertaking of units—

(i) to each of the persons who have an interest in the offshore fund, in proportion to the value of that interest, and as a result of which the value of that interest becomes negligible, or

(ii) to that offshore fund.”,

(b) in paragraph (b) by substituting “Subject to paragraph (d), a gain shall not be treated as arising” for “A gain shall not be treated as arising”,

(c) in paragraph (b)(ii) by substituting “inspector or other officer of the Revenue Commissioners nominated under subsection (7B)(d)” for “Collector-General”, and

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

“(d) A gain which, by virtue of paragraph (b), would not otherwise be treated as arising to an investment undertaking on the happening of a chargeable event in respect of a unit holder shall nevertheless be treated as so arising where, immediately before the chargeable event, the investment undertaking is in possession of any information which would reasonably suggest that the unit holder is resident in the State.”.

36. Amendment of Part 8 (annual payments, charges and interest) of Principal Act.

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