Finance Act, 1980

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Provisions relating to relief under Part IV (profits from export of certain goods) of Corporation Tax Act, 1976.

42.—(1) Save as is provided for in subsections (2) and (3), relief from corporation tax shall not be given under Part IV of the Corporation Tax Act, 1976 , in respect of any accounting period or part of an accounting period falling after the 31st day of December, 1980.

(2) (a) Subject to subsection (4), the provisions of subsection (1) shall not prevent relief being given under Part IV of the Corporation Tax Act, 1976 , to a company in relation to a trade carried on by it where the company, in the course of the trade, has at any time prior to the 1st day of January, 1981, exported out of the State any goods within the meaning of Part IV of the Corporation Tax Act, 1976 .

(b) Subject to subsection (4), where—

(i) a company (hereafter in this paragraph referred to as “the succeeding company”) succeeds to a trade or a part of a trade which, on or after the 1st day of January, 1981, was carried on by another company (hereafter in this paragraph referred to as “the original company”),

(ii) the original company has or could have made a claim to relief, by virtue of paragraph (a) or subsection (3), in relation to the trade or the part of the trade under Part IV of the Corporation Tax Act, 1976 , and

(iii) the original company had not ceased by virtue of subsection (4) to be entitled to claim relief under the said Part IV in relation to the trade or the part of the trade,

then the provisions of the said Part IV shall apply to the succeeding company as if the original company and the succeeding company were respectively the original company and the succeeding company within the meaning of section 62 (3) of the said Act.

(c) Where—

(i) subsequent to the succession described in paragraph (b) (1), another company (hereafter in this paragraph referred to as “the second succeeding company”) succeeds to a trade or a part of a trade of the company referred to in the said paragraph (b) as “the succeeding company” and which is hereafter in this paragraph referred to as “the first succeeding company”, and

(ii) that trade or that part of a trade is a trade or a part of a trade to which the said paragraph (b) applied,

then the said paragraph (b) shall apply with any necessary modifications as if the first succeeding company were the company referred to in the said paragraph (b) as “the original company” and as if the second succeeding company were the company referred to in the said paragraph (b) as “the succeeding company” and so on as regards any later such successions.

(3) Subject to subsection (4), the provisions of subsection (1) shall not apply to a company, in relation to a trade carried on by it to which subsection (2) does not apply, if, in respect of the trade, an assurance in writing has been given by a person duly authorised by the Minister for Finance to be his agent for that purpose that the provisions of the Tax Acts, including Part IV of the Corporation Tax Act, 1976 , would apply to the trade as if subsection (1) had not been enacted:

Provided that—

(a) no such assurance shall be given unless the Minister for Finance, or his agent duly authorised as aforesaid, is satisfied that the trade carried on or to be carried on by the company contributes, or would contribute, significantly to regional or national development,

(b) any such assurance shall be given in such form and manner and subject to such conditions as the Minister for Finance may direct,

(c) no such assurance shall be given on a date later than the 31st day of December, 1980, and

(d) where an assurance in writing has been given on a date not later than the 31st day of December, 1980, by a person duly authorised by the Government to be their agent for that purpose and that assurance is to the like effect as the assurance first mentioned in this subsection, this subsection shall have effect as if the assurance so given were the assurance so first mentioned and as if the provisions of this subsection relating to the giving of assurances were complied with in all respects.

(4) A company which claims relief under this Chapter in relation to a trade as respects a relevant accounting period shall not be entitled by virtue of subsection (2) or (3) to claim relief in relation to the trade under Part IV of the Corporation Tax Act, 1976 , as respects any accounting period or part of an accounting period falling after the day immediately prior to the date of the commencement of that relevant accounting period.

(5) (a) Section 58 of the Corporation Tax Act, 1976 , is hereby amended, as respects accounting periods which end on or after the 1st day of January, 1981, by the substitution for subsection (10) of the following subsection:

“(10) For the purposes of this section ‘relevant corporation tax’ means the corporation tax which, apart from this section, sections 182 (relief in respect of unrelieved losses and capital allowances carried forward from the year 1975-76) and 184 (relief in respect of corporation profits tax losses) and section 41 of the Finance Act, 1980, would be chargeable for the relevant accounting period exclusive of the corporation tax chargeable on the part of the company's profits attributable to chargeable gains for that period; and that part shall be taken to be the amount brought into the company's profits for that period for the purposes of corporation tax in respect of chargeable gains before any deduction for charges on income, expenses of management or other amounts which can be deducted from or set against or treated as reducing profits of more than one description.”.

(b) Paragraph (a) shall apply in relation to any claim made on or after the 6th day of May, 1980, for relief from corporation tax under Part IV of the Corporation Tax Act, 1976 , as respects any relevant accounting period within the meaning of that Part which ends before the 1st day of January, 1981, as it applies as respects accounting periods ending on or after that date, with the modification that, in relation to cases where section 186 of that Act has effect for the relevant accounting period in respect of which the claim is made, subsection (10) (inserted by paragraph (a)) of section 58 of that Act shall have effect as if the references therein to sections 182 and 184 of that Act included a reference to the said section 186.

(6) Section 64 of the Corporation Tax Act, 1976 , is hereby amended, as respects accounting periods which end on or after the 1st day of January, 1981—

(a) in subsection (2), in the definition of A, after “liability to corporation tax on its income”, by inserting “(other than its income from the sale of goods within the meaning of section 41 of the Finance Act, 1980)”, and the said definition, as so amended, is set out in the Table to this paragraph.

TABLE

A is an amount arrived at by applying to the amount of the company's distributable income for the accounting period, excluding distributions received by the company in that period, the fraction where D is the standard rate per cent. for the year of assessment in which the relevant distribution is made reduced in the same proportion as the company's liability to corporation tax on its income (other than its income from the sale of goods within the meaning of section 41 of the Finance Act, 1980) for the accounting period is reduced under section 58, subject to paragraph (c) of the proviso to section 182 (3) (transitional relief for income tax losses, etc.) and paragraph (iii) of the proviso to section 184 (3) (relief in respect of corporation profits tax losses),

and

(b) by the insertion after subsection (4) of the following subsection:

“(4A) Where the distributable income of a company for an accounting period falls to be determined for the purposes of this section in relation to a distribution made by the company for that accounting period (hereafter in this subsection referred to as ‘the first-mentioned distribution’), there shall be deducted from the aggregate mentioned in subsection (4) the aggregate of the following amounts—

(a) the amount of the company's income which, in relation to the first-mentioned distribution, falls to be taken into account in the definition of A in section 45 (1) of the Finance Act, 1980 (before any reduction under section 47 (2) (i) or 48 (2) (i) of that Act), as income of the company for the relevant accounting period (within the meaning of Chapter VI of Part I of that Act) which coincides with or is included in the said accounting period less the amount of corporation tax which falls to be taken into account in the definition of B in the said section 45 (1) in respect of that amount of the company's income, and

(b) an amount equal to the distributions received by the company in the accounting period which are relevant distributions within the meaning of section 45 of the Finance Act, 1980, and which fall to be included within the definition of E in subsection (1) of that section in relation to the first-mentioned distribution.”.