Income Tax Act, 1967.

Basis of relief from tax.

404.—(1) Where a company claims and proves as respects any year of claim—

(a) that, during the standard period in relation to the trade, goods were, in the course of the trade, exported out of the State,

(b) that, during the basis period, goods were, in the course of the trade, exported out of the State, and

(c) that the total amount receivable from the sale of the last-mentioned goods was in excess of the total amount receivable from the sale of the goods exported during the standard period,

income tax payable by the company for the year of claim, so far as it is referable to the profit attributable to the said excess, shall be reduced to nil.

(2) Subject to subsection (5), “the profit attributable to the said excess” shall, for the purposes of subsection (1), be taken to be such sum as bears to the amount of the company's profits for the year of claim, computed in accordance with this Act, which is attributable to the sale of goods (whether exported or not), the same proportion as the amount of the said excess bears to the total amount receivable by the company from such sale in the basis period.

(3) Where a company claims and proves as respects any year of claim—

(a) that, during the standard period in relation to the trade, no goods were, in the course of the trade, exported out of the State or that the standard period is not applicable, and

(b) that, during the basis period, goods were, in the course of the trade, exported out of the State,

income tax payable by the company for the year of claim, so far as it is referable to the profit on the sale of the goods so exported shall be reduced to nil.

(4) Subject to subsection (5), “the profit on the sale of the goods so exported” shall, for the purposes of subsection (3), be taken to be such sum as bears to the amount of the company's profits for the year of claim, computed in accordance with this Act, which is attributable to the sale of goods (whether exported or not), the same proportion as the amount receivable in the basis period from the sale of goods exported bears to the total amount receivable by the company from the sale of goods (whether exported or not) in the basis period.

(5) In a case in which the preceding provisions of this section apply, and the export out of the State in the relevant basis period consisted of or included goods with respect to which section 399 (3) provides for the inclusion thereof in the definition of “goods”, this Chapter shall have effect subject to the insertion, in subsections (2) and (4), of “and of merchandise (whether exported or not) other than such goods” after “goods (whether exported or not)” wherever the latter words occur.

(6) In relation to a company which has obtained relief under subsection (1) or (3), this section shall apply as respects the five consecutive years of assessment the first of which is the year of assessment immediately following the company's last year of claim as if—

(a) each of those years were a year of claim, and

(b) for “shall be reduced to nil” in subsections (1) and (3) there were substituted—

(i) in the case of the first of those years, “shall be reduced by 80 per cent.”,

(ii) in the case of the second of those years, “shall be reduced by 65 per cent.”,

(iii) in the case of the third of those years, “shall be reduced by 50 per cent.”,

(iv) in the case of the fourth of those years, “shall be reduced by 35 per cent”, and

(v) in the case of the fifth of those years, “shall be reduced by 15 per cent.”.

(7) Where, apart from the provisions of this subsection and subsection (8), a company is entitled to claim relief under this Chapter, by virtue of subsection (6), in respect of the year 1974-75 or any earlier year of assessment, the company may, in lieu of such relief, claim relief under subsection (1) or subsection (3) as if that year of assessment were a year of claim within the meaning of section 402.

(8) Where a company has obtained relief under this Chapter by virtue of subsection (7) and is subsequently entitled to relief under subsection (6), the last-mentioned relief shall be granted as if the last year of assessment in respect of which relief is due by virtue of subsection (7) was the company's last year of claim within the meaning of section 402:

Provided that no relief shall be given in respect of any year of assessment after the fourteenth year of assessment after the first year of claim or in respect of any year of assessment after the year 1979-80.

(9) In computing, for the purpose of assessment to income tax, the amount of the profits or gains from a company's trade, any corporation profits tax which, by virtue of section 13 of the Finance (Miscellaneous Provisions) Act, 1956 , is not payable, shall be deemed to have been paid.