Energy (Windfall Gains in the Energy Sector) (Temporary Solidarity Contribution) Act 2023

PART 1 Preliminary and General

1. Short title and commencement

1. (1) This Act may be cited as the Energy (Windfall Gains in the Energy Sector) (Temporary Solidarity Contribution) Act 2023.

(2) This Act shall come into operation on such day or days as the Minister may appoint by order or orders either generally or with reference to any particular purpose or provision, and different days may be so appointed for different purposes or different provisions, including the amendments of the provisions specified in the Schedule effected by section 24.

2. Interpretation

2. (1) In this Act—

“Act of 1997” means the Taxes Consolidation Act 1997;

“amended assessment” means a Revenue assessment amended by a Revenue officer under section 959Y(1)(b) of the Act of 1997, as applied by section 10;

“Appeal Commissioner” has the same meaning as it has in the Finance (Tax Appeals) Act 2015;

“assessment” means an assessment to temporary solidarity contribution that is made under this Act and, unless the context otherwise requires, includes a self assessment;

“average taxable profits in respect of the reference years” has the same meaning as it has in Part 24B of the Act of 1997;

“chargeable period” means the 12 month period commencing on 1 January in each of the years 2022 and 2023;

“Collector-General” means the Collector-General appointed under section 851 of the Act of 1997;

“company” means a body corporate;

“Council Regulation” means Council Regulation (EU) 2022/1854 of 6 October 2022[^2] on an emergency intervention to address high energy prices;

“electronic means” has the same meaning as it has in section 917EA of the Act of 1997;

“energy company” means a company that generates at least 75 per cent of its turnover in a chargeable period from relevant activities;

“Minister” means the Minister for the Environment, Climate and Communications;

“relevant activities” means economic activities, carried on in the State or in a designated area (within the meaning of the Maritime Jurisdiction Act 2021), in the field of the extraction, mining or refining of natural gas, coal, petroleum or manufacture of coke oven products as referred to in Regulation (EC) No. 1893/2006 of the European Parliament and of the Council of 20 December 2006 [^3];

“return” means the return that is required to be prepared and delivered to the Revenue Commissioners under section 8;

“Revenue assessment” has the meaning assigned to it by section 11(1);

“Revenue officer” means an officer of the Revenue Commissioners;

“self assessment” means an assessment by an energy company, or by a person acting under the authority of an energy company, of the amount of temporary solidarity contribution payable by the energy company in respect of a chargeable period;

“specified date” means, as the case may be—

(a) 23 September 2023, in respect of the chargeable period commencing on 1 January 2022, or

(b) 23 September 2024, in respect of the chargeable period commencing on 1 January 2023;

“taxable profits” has the same meaning as it has in Part 24B of the Act of 1997;

“temporary solidarity contribution” has the meaning assigned to it by section 4(1).

(2) A word or expression which is used in this Act and which is also used in the Council Regulation has, unless the context otherwise requires, the same meaning in this Act as it has in the Council Regulation.

3. Expenses

3. The expenses incurred by the Minister in the administration of this Act shall, to such extent as may be approved by the Minister for Public Expenditure, National Development Plan Delivery and Reform, be paid out of moneys provided by the Oireachtas.

PART 2 Provisions relating to temporary solidarity contribution

4. Temporary solidarity contribution

4. (1) There shall be charged, levied and paid a levy to be known as the “temporary solidarity contribution” on the taxable profits of each energy company in respect of each chargeable period.

(2) The amount of temporary solidarity contribution to be charged in respect of a chargeable period shall be any positive amount calculated as—

(A - (B x 1.2)) x 0.75

where—

A is the taxable profits in respect of the chargeable period, and

B is the average taxable profits in respect of the reference years.

(3) The temporary solidarity contribution shall be due and payable by an energy company to the Revenue Commissioners on or before the specified date in respect of the chargeable period concerned.

5. Anti-avoidance

5. (1) Where there is an arrangement which has the effect of reducing the amount of taxable profits and it is reasonable to consider that—

(a) the arrangement was not made for bona fide commercial reasons, and

(b) the main purpose, or one of the main purposes, of the arrangement is to avoid or reduce the amount of temporary solidarity contribution paid or to be paid under this Act,

then the effect of the arrangement shall not be taken into account for the purposes of calculating taxable profits.

(2) In this section, “arrangement” has the same meaning as it has in section 835A of the Act of 1997.

6. Care and management of temporary solidarity contribution

6. (1) The temporary solidarity contribution shall be under the care and management of the Revenue Commissioners.

(2) Part 37 of the Act of 1997 shall apply to the temporary solidarity contribution, subject to the following modifications:

(a) the definition of chargeable period in section 865(1)(a) shall be construed as if “has the same meaning as it has in the Energy (Windfall Gains in the Energy Sector) (Temporary Solidarity Contribution) Act 2023” were substituted for “has the meaning assigned to it by section 321”;

(b) a reference to a chargeable person or a chargeable person (within the meaning of Part 41A) in section 865 shall be construed as a reference to an energy company;

(c) a reference to corporation tax in sections 849, 861, 863, 864, 865, 865B, 872 and 874 shall be construed as including a reference to temporary solidarity contribution;

(d) a reference to the Tax Acts in sections 851, 851A, 852, 856, 858, 859, 860, 861, 864, 865, 865A, 865B, 868, 869, 873, 874 and 874A shall be construed as including a reference to this Act;

(e) a reference to accounting period in section 863 shall be construed as a reference to chargeable period;

(f) the definition of relevant period in section 865B shall be construed as including the following paragraph after paragraph (e):

“(ea) in the case of temporary solidarity contribution (within the meaning of the Energy (Windfall Gains in the Energy Sector) (Temporary Solidarity Contribution) Act 2023), the chargeable period (within the meaning of that Act) in respect of which the repayment arises,”;

(g) in section 870—

(i) a reference to the Capital Gains Tax Acts shall be construed as including a reference to this Act,

(ii) a reference to tax shall be construed as including a reference to temporary solidarity contribution, and

(iii) a reference to assessment shall be construed as a reference to an assessment within the meaning of this Act.

(3) Any act to be performed or function to be discharged by the Revenue Commissioners which is authorised by this Act may be performed or discharged by any one or more Revenue officers acting under their authority.

7. Notice to Revenue Commissioners

7. (1) Each energy company shall be required to give notice to the Revenue Commissioners that the company is an energy company in the form and manner specified by the Revenue Commissioners.

(2) A notice under subsection (1) shall contain—

(a) the name of the energy company,

(b) the registered address of the company,

(c) the corporation tax number of the company, and

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

(3) The notice referred to in subsection (1) shall be delivered to the Revenue Commissioners on or before—

(a) 30 August 2023, or

(b) 30 August 2024, where the company first becomes an energy company in the chargeable period commencing on 1 January 2023.

(4) An energy company shall not be required to give notice under this section more than once.

(5) A notice referred to in subsection (1) shall be given by electronic means and through such electronic systems as the Revenue Commissioners may make available for the time being for any such purpose, and the relevant provisions of Chapter 6 of Part 38 of the Act of 1997 shall apply.

8. Returns

8. (1) Each energy company shall prepare and deliver to the Revenue Commissioners a full and true return for a chargeable period, in the prescribed form, on or before the specified date.

(2) Without prejudice to the generality of subsection (1), the Revenue Commissioners may require the following information to be included in a return:

(a) the amount of taxable profits for the chargeable period;

(b) the amount of average taxable profits in respect of the reference years;

(c) the amount of temporary solidarity contribution payable for the chargeable period;

(d) such further particulars as may be required by the prescribed form.

(3) Every return prepared and delivered under subsection (1) shall include a self assessment.

(4) A self assessment shall be made in, and as part of, the return, by reference to the particulars contained in that return and the self assessment shall include such further particulars as the Revenue Commissioners may require.

(5) A return and a self assessment may be amended in accordance with section 959V of the Act of 1997, as applied by section 10.

(6) A return (including an amended return referred to in subsection (5)) shall—

(a) be signed by the person who prepares the return,

(b) include a declaration by the person signing it that the return is, to the best of that person’s knowledge and belief, correct and complete, and

(c) be made by electronic means and through such electronic systems as the Revenue Commissioners may make available for the time being for any such purpose, and the relevant provisions of Chapter 6 of Part 38 of the Act of 1997 shall apply.

(7) In this section, “prescribed form” means a form prescribed by the Revenue Commissioners or a form used under the authority of the Revenue Commissioners.

9. Action by person acting under authority

9. (1) A return may be prepared and delivered by an energy company or by another person acting under the authority of the energy company.

(2) Where a return is prepared and delivered by a person acting under the authority of an energy company, this Act and the Act of 1997, as applied by this Act, shall apply as if the return had been prepared and delivered by the energy company.

(3) Anything required or allowed to be done by an energy company under this Act or the Act of 1997, as applied by this Act, may be done by a person acting under the authority of an energy company.

10. Assessments and enquiries

10. (1) Sections 959V, 959Y, 959Z, 959AA, 959AC, 959AD, 959AE, 959AU and 959AV(1) of the Act of 1997 shall apply to the temporary solidarity contribution, subject to the following modifications:

(a) a reference to a chargeable person shall be construed as a reference to an energy company;

(b) a reference to a chargeable period shall be construed as a reference to a chargeable period within the meaning of this Act;

(c) a reference to income, profits or gains or, as the case may be, chargeable gains shall be construed as a reference to taxable profits;

(d) a reference to a return shall be construed as a reference to a return within the meaning of this Act;

(e) a reference to the specified return date for the chargeable period shall be construed as a reference to the specified date;

(f) a reference to tax shall be construed as including a reference to temporary solidarity contribution;

(g) a reference to assessment, Revenue assessment or self assessment, as the case may be, shall be construed as a reference to an assessment, Revenue assessment or self assessment within the meaning of this Act, as the case may be;

(h) a reference to the Acts shall be construed as including a reference to this Act;

(i) the reference in section 959V(5) to section 959L shall be construed as a reference to section 9.

(2) Section 959Z of the Act of 1997 shall apply to the temporary solidarity contribution as if—

(a) the following subsection, subject to the modifications referred to in subsection (1), were substituted for subsection (3):

“(3) Subject to subsections (3A) and (4), any enquiries or actions to which either subsection (1) or (2) applies shall not be made in the case of an energy company (within the meaning of the Energy (Windfall Gains in the Energy Sector) (Temporary Solidarity Contribution) Act 2023) for a chargeable period at any time after the expiry of the period of 4 years commencing at the end of the year in which the energy company has delivered a return for the chargeable period.”,

and

(b) the following subsection, subject to the modifications referred to in subsection (1), were inserted after subsection (3):

“(3A) (a) Nothing in this section shall be construed as preventing the making of enquiries or taking of actions regarding the composition or calculation of the average taxable profits in respect of the reference years, included in a return for the chargeable period, within the period of 4 years commencing at the end of the year in which the energy company has delivered that return.

(b) In this subsection, ‘average taxable profits in respect of the reference years’ and ‘energy company’ have the same meaning, respectively, as in the Energy (Windfall Gains in the Energy Sector) (Temporary Solidarity Contribution) Act 2023.”.

11. Revenue assessment

11. (1) An assessment under section 959Y of the Act of 1997, as applied by section 10, of the amount of temporary solidarity contribution payable by an energy company in respect of a chargeable period shall be referred to in this Act as a “Revenue assessment”.

(2) A Revenue assessment shall be made by a Revenue officer and shall involve an assessment of—

(a) the amount of taxable profits for the chargeable period,

(b) the average taxable profits in respect of the reference years,

(c) the amount of temporary solidarity contribution payable by the energy company for the chargeable period, and

(d) the balance of temporary solidarity contribution, taking account of any amount of temporary solidarity contribution paid directly by the energy company to the Collector-General for the chargeable period which under this Act—

(i) is due and payable by the energy company to the Revenue Commissioners for the chargeable period, or

(ii) is overpaid by the energy company for the chargeable period and which, subject to this Act, is available for offset or repayment by the Revenue Commissioners.

(3) A Revenue assessment shall include the amount of any surcharge due for the chargeable period under section 17(1).

(4) Where a Revenue officer makes a Revenue assessment, any self assessment previously made shall, for the purposes of determining the energy company’s liability to pay temporary solidarity contribution for the chargeable period, be treated as if it had not been made and shall be void for such purposes.

12. Notice of Revenue assessment

12. (1) A Revenue officer shall give notice of a Revenue assessment to the energy company.

(2) A notice of a Revenue assessment, under subsection (1), may be given by the Revenue officer in writing or by electronic means.

(3) Where a return is prepared and delivered in accordance with section 8(1) by another person acting under the authority of the energy company, a copy of the notice of the Revenue assessment shall be given to that other person.

(4) A notice of a Revenue assessment shall include details of—

(a) each matter referred to in paragraphs (a) to (d) of section 11(2),

(b) the amount of any surcharge which, under section 17(1), is due for the chargeable period,

(c) the name of the Revenue officer who is giving notice of the Revenue assessment and the address of the Revenue office at which that officer is based, and

(d) the period allowed under section 15 for giving notice of appeal against the assessment to which the notice relates.

13. Amended assessment

13. Sections 10, 11 and 12 shall apply to an amended assessment as they apply to a Revenue assessment, subject to any necessary modifications.

14. Application of expression of doubt

14. Where—

(a) an energy company includes a letter of expression of doubt with a return for corporation tax purposes in accordance with section 959P of the Act of 1997, and

(b) by reason of the amendment of an assessment referred to in subsection (5) of that section there is—

(i) an increase in the taxable profits in a chargeable period, or

(ii) a decrease in the average taxable profits in respect of the reference years,

then any additional temporary solidarity contribution that is due under an amended assessment, following the amendment referred to in paragraph (b), shall be due and payable in accordance with section 959AU(2) of the Act of 1997, as applied by section 10.

15. Appeal to Appeal Commissioners

15. (1) An energy company aggrieved by a Revenue assessment or an amended assessment made on that company may appeal that assessment or amended assessment, as the case may be, within 30 days after the date of the notice of assessment or the amended assessment, as the case may be, to the Appeal Commissioners in accordance with section 949I of the Act of 1997.

(2) Section 949O of the Act of 1997 shall apply to the temporary solidarity contribution as if the following subparagraphs were substituted for subparagraphs (v) and (vi) in subsection (3)(b):

“(v) section 114 of the Value-Added Tax Consolidation Act 2010,

(vi) section 149 of the Finance (Local Property Tax) Act 2012, or

(vii) section 18 of the Energy (Windfall Gains in the Energy Sector) (Temporary Solidarity Contribution) Act 2023,”.

(3) No appeal may be made against—

(a) a surcharge imposed under this Act where that is the energy company’s sole ground for the appeal, other than where the ground for the appeal relates to a matter referred to in section 17(4),

(b) a self assessment, or

(c) the amount of any taxable profits specified in a self assessment.

16. Obligation to keep certain records