Corporation Tax Act, 1976

Groups of companies: definitions.

129.—(1) For the purposes of this section and the following sections of this Part—

(a) references to a company, subject to section 138 (7), apply only to a company, as that expression is limited by subsection (2), which is resident in the State;

(b) a principal company, and all its 75 per cent. subsidiaries form a group, and where a principal company is a member of a group as being itself a 75 per cent. subsidiary that group shall comprise all its 75 per cent. subsidiaries;

(c) “principal company” means a company of which another company is a 75 per cent. subsidiary;

(d) in applying the definition of “75 per cent. subsidiary” in section 156 (subsidiaries) any share capital of a registered industrial and provident society shall be treated as ordinary share capital; and

(e) “group” and “subsidiary” shall be construed with any necessary modifications where applied to a company incorporated under the law of a country outside the State.

(2) For the purposes referred to in subsection (1) references to a company apply only to—

(a) a company within the meaning of the Companies Act, 1963 , and

(b) a company which is constituted under any other Act or a charter or letters patent or (although resident in the State) is formed under the law of a country or territory outside the State, and

(c) a registered industrial and provident society within the meaning of section 218 of the Income Tax Act, 1967 .

(3) For the purposes referred to in subsection (1) a group remains the same group so long as the same company remains the principal company of the group, and if at any time the principal company of a group becomes a 75 per cent. subsidiary of another company the group of which it was the principal company before that time shall be regarded as the same as the group of which that other company, or one of which it is a 75 per cent. subsidiary, is the principal company, and the question whether or not a company has ceased to be a member of a group shall be determined accordingly.

(4) For the purposes referred to in subsection (1) the passing of a resolution or the making of an order, or any other act, for the winding up of a company shall not be regarded as the occasion of that company, or of any 75 per cent. subsidiary of that company, ceasing to be a member of a group of companies.

(5) The following sections of this Part, except in so far as they relate to recovery of tax, shall also have effect in relation to bodies from time to time established by or under any enactment for the carrying on of any industry or part of an industry, or of any undertaking, under national ownership or control as if they were companies within the meaning of those sections, and as if any such bodies charged with related functions and subsidiaries of any of them formed a group, and as if also any two or more such bodies charged at different times with the same or related functions were members of a group:

Provided that this subsection shall have effect subject to any enactment by virtue of which property, rights, liabilities or activities of one such body fall to be treated for corporation tax as those of another.

(6) For the purposes of this Part—

(a) section 35 of the Capital Gains Tax Act, 1975 (close company transferring assets at undervalue), shall not apply where the transfer is a disposal to which section 130 (1) applies;

(b) paragraph 6 of Schedule 1 to the Capital Gains Tax Act, 1975 (part disposals), and all other provisions for apportioning on a part disposal expenditure which is deductible in computing a gain, shall be operated before the operation of, and without regard to,—

(i) section 130 (1),

(ii) any other enactment making an adjustment to secure that neither a gain nor a loss occurs on a disposal;

(c) a “non-resident group” of companies—

(i) in the case of a group, none of the members of which is resident in the State, means that group, and

(ii) in the case of a group, two or more members of which are not resident in the State, means the members which are not resident in the State,

and for the purposes of this paragraph “group” shall be construed in accordance with subsections (1) (without paragraph (a)), (3) and (4).

(7) For the purposes of section 36 of the Capital Gains Tax Act, 1975 (non-resident company)—

(a) sections 130 to 133 shall apply in relation to non-resident companies which are members of a non-resident group of companies, as they apply in relation to companies resident in the State which are members of a group of companies,

(b) sections 135 and 137 shall apply as if for any reference therein to a group of companies there were substituted a reference to a non-resident group of companies, and as if references to companies were references to companies not resident in the State.