Finance Act, 1941

Provisions in respect of certain accounting periods.

36.—(1) Paragraph (g) of the proviso to sub-section (2) of section 53 of the Finance Act, 1920 , shall not apply or have effect in relation to the ascertainment of profits in an accounting period ending on or after the 1st day of April, 1939.

(2) The following provisions shall apply and have effect in respect of every accounting period (in this sub-section referred to as the said accounting period) which began before and ended on or after the 1st day of January, 1941, that is to say:—

(a) the profits arising in the said accounting period shall be apportioned between the part (in this sub-section referred to as the said earlier part) of the said accounting period which was prior to the 1st day of January, 1941, and the part (in this sub-section referred to as the said later part) of the said accounting period which was subsequent to the 31st day of December, 1940, in proportion to the respective lengths of those parts;

(b) no tax shall be charged on so much of the said profits apportioned to the said earlier part of the said accounting period as bears to five thousand pounds the same proportion as the said earlier part of the said accounting period bears to twelve months;

(c) no tax shall be charged on so much of the said profits apportioned to the said later part of the said accounting period as bears to two thousand five hundred pounds the same proportion as the said later part of the said accounting period bears to twelve months;

(d) in the case of a company incorporated by or under the laws of the State and in the case of a foreign company which has satisfied the Revenue Commissioners that one of the conditions prescribed by sub-section (2) of section 31 of the Finance Act, 1928 (No. 11 of 1928) has been fulfilled in its case, so much of the said profits apportioned to the said earlier part of the said accounting period as remains chargeable shall be charged with tax at the rate of seven and one-half per cent and so much of the said profits apportioned to the said later part of the said accounting period as remains chargeable shall be charged with tax at the rate of ten per cent.;

(e) in the case of a foreign company which has not satisfied the Revenue Commissioners that one of the conditions prescribed by sub-section (2) of section 31 of the Finance Act, 1928 (No. 11 of 1928), has been fulfilled in its case, so much of the said profits apportioned to the said earlier part of the said accounting period as remains chargeable shall be charged with tax at the rate of ten per cent, and so much of the said profits apportioned to the said later part of the said accounting period as remains chargeable shall be charged with tax at the rate of twelve and one-half per cent.;

(f) the amount of tax payable in respect of the profits for the said accounting period of a company incorporated by or under the laws of the State shall in no case exceed the sum of the following amounts, that is to say:—

(i) the amount represented by ten per cent of the balance of the said profits apportioned to the said earlier part of the said accounting period remaining after allowing such proportion of the deductions specified in paragraph (b) of the proviso to sub-section (1) of section 52 of the Finance Act, 1920 , as would be appropriate to the said earlier part of the said accounting period if such deductions were apportioned in the same manner as the said profits are required by this sub-section to be apportioned, and

(ii) the amount represented by fifteen per cent of the balance of the said profits apportioned to the said later part of the said accounting period remaining after allowing such proportion of the said deductions as would be appropriate to the said later part of the said accounting period if the said deductions were apportioned as aforesaid.

(3) In the next preceding sub-section of this section the word “tax” means corporation profits tax other than excess corporation profits tax.

(4) In ascertaining, for the purposes of a charge to corporation profits tax (other than excess corporation profits tax) the profits arising in an accounting period ending after the 31st day of December, 1940, in the case of a company the directors whereof have a controlling interest therein, no deduction in excess of an amount calculated at the rate of one thousand pounds per annum shall be allowed in respect of the remuneration of any director, other than a director who is required to devote substantially the whole of his time to the service of the company in a managerial or technical capacity and is not the beneficial owner of or able (directly or through the medium of other companies or by any other indirect means) to control more than five per cent. of the ordinary stock or shares of the company.