Finance Act, 1968

Relief in relation to transactions between associated companies.

36.—(1) In this section—

“the airport” has the same meaning as in the Customs-free Airport Act, 1947 ;

“company” has, for the purposes of income tax, the same meaning as in section 398 of the Income Tax Act, 1967 , and, for the purposes of corporation profits tax, the same meaning as in section 10 of the Finance (Miscellaneous Provisions) Act, 1956 ;

“control” has the same meaning as in section 299 (6) of the Income Tax Act, 1967 ;

“exempted trading operation” means a trading operation in respect of which there is in force a certificate given, before the 6th day of April, 1967, under section 3 (2) of the Finance (Miscellaneous Provisions) Act, 1958 , or, on or after that date, under section 374 (2) of the Income Tax Act, 1967 , and the said section 3 (2);

“goods”, where is occurs in subsection (3), has, for the purposes of income tax, the same meaning as in Chapter IV of Part XXV of the Income Tax Act, 1967 , and, for the purposes of corporation profits tax, the same meaning as in Part III of the Finance (Miscellaneous Provisions) Act, 1956 ;

“other trading operation” means a trading operation which is carried on wholly within the airport other than an exempted trading operation;

“qualified company” has, for the purposes of income tax, the same meaning as in section 374 (1) of the Income Tax Act, 1967 , and, for the purposes of corporation profits tax, the same meaning as in section 3 (1) of the Finance (Miscellaneous Provisions) Act, 1958 .

(2) Where a qualified company (in this subsection referred to as the seller) which carries on a trade consisting partly of exempted trading operations and partly of other trading operations sells goods in the course of the other trading operations to a company (in this subsection referred to as the buyer) which carries on a trade in the State wholly outside the airport, and—

(a) the other trading operations would have been exempted trading operations if the goods had been exported out of the State by the seller, and

(b) the seller has control over the buyer or the buyer has control over the seller or some other person has control over both the buyer and the seller, and

(c) the goods are appropriated as trading stock of the buyer, and

(d) the goods are subjected by the buyer to a process of manufacture in the State, and

(e) the inspector is satisfied that the goods have been, or will be, exported out of the State by the buyer either as components of other goods or otherwise, and

(f) the other trading operations consist wholly of the sale of goods to the buyer and any goods sold by the buyer in the course of his trade (other than goods exported out of the State) are sold to the seller,

the profits or gains arising from, or losses sustained in, the other trading operations shall be deemed, notwithstanding section 374 (6) (a) of the Income Tax Act, 1967 , or section 3 (6) (a) of the Finance (Miscellaneous Provisions) Act, 1958 , or any certificate under section 3 (2) of the Finance (Miscellaneous Provisions) Act, 1958 , or under section 374 (2) of the Income Tax Act, 1967 , and the said section 3 (2), to arise from, or to be sustained in, exempted trading operations and Chapter I of Part XXV of the Income Tax Act, 1967 , and Part II of the Finance (Miscellaneous Provisions) Act, 1958 , shall apply accordingly.

(3) Where a company (in this subsection referred to as the seller) which is not a qualified company sells goods to a person (in this subsection referred to as the buyer) who is either a qualified company which carries on a trade consisting partly of exempted trading operations and partly of other trading operations or a company which carries on a trade in the State wholly outside the airport, and—

(a) the seller would have been entitled to claim relief under Chapter IV of Part XXV of the Income Tax Act, 1967 , or Part III of the Finance (Miscellaneous Provisions) Act, 1956 , in respect of the profit attributable to the sale of the goods if they had been exported out of the State, and

(b) the seller has control over the buyer or the buyer has control over the seller or some other person has control over both the buyer and the seller, and

(c) the goods are appropriated as trading stock of the buyer, and

(d) the goods are subjected by the buyer to a process of manufacture in the State, and

(e) the inspector is satisfied that the goods have been, or will be, exported out of the State by the buyer either as components of other goods or otherwise, and

(f) any goods sold by the seller in the course of his trade (other than goods exported out of the State) are sold to the buyer and any goods sold by the buyer in the course of his trade (other than goods exported out of the State) are sold to the seller,

Chapter IV of Part XXV of the Income Tax Act, 1967 , and Part III of the Finance (Miscellaneous Provisions) Act, 1956 , shall apply as if the goods had been exported out of the State by the seller and any amount receivable by the seller from the sale of the goods to the buyer shall be deemed to be an amount receivable from the sale of goods so exported.

(4) This section shall have effect as on and from the 6th day of April, 1968, and, in the case of corporation profits tax, the Revenue Commissioners may, for the purposes of this section, make such apportionments as they consider appropriate where part of an accounting period is before and part on or after the 6th day of April, 1968.