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Amendment of Schedule 24 to Principal Act (relief from income tax and corporation tax by means of credit in respect of foreign tax)
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97. Schedule 24 to the Principal Act is amended—
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(a) in paragraph 1(1), by the insertion of the following definitions:
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“ ‘fiscal year’ has the meaning given to it in section 111A(1);
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‘foreign qualified domestic top-up tax’ means a qualified domestic top-up tax arising under the laws of a territory other than the State that is paid within 4 years from the end of the fiscal year in which it becomes due;
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‘qualified domestic top-up tax’ has the meaning given to it in section 111A(1);”,
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(b) in paragraph 2, by the insertion of the following subparagraph after subparagraph (3):
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“(4) Relief under this Schedule shall not be allowed—
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(a) for any tax which is a qualified IIR (within the meaning of section 111A(1)), or
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(b) for any tax which is a qualified UTPR (within the meaning of section 111A(1)).”,
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(c) in paragraph 9A—
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(i) in subparagraph (4)(a)—
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(I) in subclause (i), by the substitution of “paid,” for “paid, and”,
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(II) in subclause (ii), by the substitution of “dividend, and” for “dividend,”, and
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(III) by the insertion of the following subclause after subclause (ii):
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“(iii) an amount of foreign qualified domestic top-up tax payable or paid by a company paying the dividend (in this subclause referred to as ‘the dividend-paying company’) being—
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(I) an amount of qualified domestic top-up tax arising under the laws of a territory, other than the State, that is payable or paid by the dividend-paying company in so far as the foreign qualified domestic top-up tax is properly attributable on a just and reasonable basis to the proportion of the profits represented by the dividend, or
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(II) where an amount of qualified domestic top-up tax is payable or paid by an entity under the laws of the territory in which the dividend-paying company is located, for the purposes of the qualified domestic top-up tax laws of the territory, in respect of the aggregate profits of that dividend-paying company and one or more other entities, taken together as a single taxable entity, the amount of qualified domestic top-up tax that is attributable on a just and reasonable basis to the profits represented by the dividend of the dividend-paying company.”,
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and
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(ii) by the substitution of the following subparagraph for subparagraph (7):
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“(7) In this Schedule, in its application to unilateral relief, references to tax payable or paid under the law of a territory outside the State include only references to taxes which are charged on income or capital gains and which correspond to corporation tax, capital gains tax and, for the purposes of this paragraph, include foreign qualified domestic top-up tax.”,
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(d) in paragraph 9B—
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(i) in subparagraph (1)—
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(I) in clause (a), by the substitution of “profits,” for “profits, and”,
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(II) in clause (b), by the substitution of “profits,” for “profits.”, and
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(III) by the insertion of the following clauses after clause (b):
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“(c) any qualified domestic top-up tax attributable to a branch or agency, of the foreign company, located in the State, and
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(d) an amount of foreign qualified domestic top-up tax payable or paid by the company paying the dividend (in this clause referred to as ‘the dividend-paying foreign company’) being—
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(i) an amount of qualified domestic top-up tax arising under the laws of a territory, other than the State, that is payable or paid by the dividend-paying foreign company in so far as the foreign qualified domestic top-up tax is properly attributable on a just and reasonable basis to the proportion of the profits represented by the dividend, or
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(ii) where an amount of qualified domestic top-up tax is payable or paid by an entity under the laws of the territory in which the dividend-paying foreign company is located, for the purposes of the qualified domestic top-up tax laws of the territory, in respect of the aggregate profits of that dividend-paying foreign company and one or more other entities, taken together as a single taxable entity, the amount of qualified domestic top-up tax that is attributable on a just and reasonable basis to the profits represented by the dividend of the dividend-paying foreign company.”,
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(ii) in subparagraph (2)—
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(I) in subclause (i), by the substitution of “profits,” for “profits, and”,
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(II) in subclause (ii), by the substitution of “profits,” for “profits.”, and
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(III) by the insertion of the following subclauses after subclause (ii):
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“(iii) any qualified domestic top-up tax attributable to a branch or agency, of the foreign company, located in the State, and
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(iv) an amount of foreign qualified domestic top-up tax payable or paid by the foreign company paying the dividend (in this subclause referred to as ‘the dividend-paying foreign company’) being—
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(I) an amount of qualified domestic top-up tax arising under the laws of a territory, other than the State, that is payable or paid by the dividend-paying foreign company in so far as the foreign qualified domestic top-up tax is properly attributable on a just and reasonable basis to the proportion of the profits represented by the dividend, or
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(II) where an amount of qualified domestic top-up tax is payable or paid by an entity under the laws of the territory in which the dividend-paying foreign company is located, for the purposes of the qualified domestic top-up tax laws of the territory, in respect of the aggregate profits of that dividend-paying foreign company and one or more other entities, taken together as a single taxable entity, the amount of qualified domestic top-up tax that is attributable on a just and reasonable basis to the profits represented by the dividend of the dividend-paying foreign company.”,
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and
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(iii) in subparagraph (5), by the substitution of the following definition for the definition of “underlying tax”:
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“ ‘underlying tax’, in relation to a dividend, means tax, including any foreign qualified domestic top-up tax, borne by the company paying the dividend on the relevant profits (within the meaning of paragraph 8) in so far as it is properly attributable on a just and reasonable basis to the proportion of the relevant profits represented by the dividend.”,
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(e) in paragraph 9DA, by the substitution of the following subparagraph for subparagraph (7):
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“(7) In this Schedule, in its application to unilateral relief, references to tax payable or paid under the law of a territory outside the State include only—
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(a) references to taxes which are charged on income or capital gains and which correspond to corporation tax and capital gains tax, and
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(b) references to any amount of foreign qualified domestic top-up tax payable or paid by a branch or agency being—
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(i) an amount of qualified domestic top-up tax arising under the laws of a territory, other than the State, that is payable or paid by the branch or agency in so far as the foreign qualified top-up tax is properly attributable on a just and reasonable basis to the income of a company resident in the State from a trade carried on by it through a branch or agency in that territory, or
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(ii) where an amount of qualified domestic top-up tax is payable or paid by an entity under the laws of the territory in which the branch or agency is located, for the purposes of the qualified domestic top-up tax laws of the territory, in respect of the aggregate profits of that branch or agency and one or more other entities, taken together as a single taxable entity, the amount of qualified domestic top-up tax that is attributable on a just and reasonable basis to the income of a company resident in the State from a trade carried on by it through a branch or agency in that territory.”,
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(f) in paragraph 9FA(1), by the substitution of the following definition for the definition of “foreign tax”:
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“ ‘foreign tax’ in relation to foreign branch income of a company, means—
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(a) tax which—
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(i) is paid under the laws of the territory in which the foreign branch is situated on income attributable to that branch, and
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(ii) corresponds to corporation tax,
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or
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(b) an amount of foreign qualified domestic top-up tax payable or paid by a foreign branch or agency being—
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(i) an amount of qualified domestic top-up tax arising under the laws of a territory, other than the State, that is payable or paid by the foreign branch or agency in so far as the foreign qualified top-up tax is properly attributable on a just and reasonable basis to the foreign branch or agency income of a company, or
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(ii) where an amount of qualified domestic top-up tax is payable or paid by an entity under the laws of the territory in which the foreign branch or agency is located, for the purposes of the qualified domestic top-up tax laws of the territory, in respect of the aggregate profits of that branch or agency and one or more other entities, taken together as a single taxable entity, the amount of qualified domestic top-up tax that is attributable on a just and reasonable basis to the foreign branch or agency income.”,
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and
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(g) in paragraph 9I(1), by the substitution of the following definition for the definition of “tax”:
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“ ‘tax’, except in the case of corporation tax in the State, means—
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(a) tax imposed in a country other than the State, which corresponds to such corporation tax, including any foreign qualified domestic top-up tax, and
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(b) tax, corresponding to income tax in the State, which is imposed in a country other than the State by deduction from dividends or other distributions of profits,
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but excluding any tax charged by reference to a dividend or other distribution of profits such that most of the value of that dividend or distribution is exempted from that charge to tax.”.
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