S.I. No. 274/1976 - Income Tax (Construction Contracts) Regulations, 1976.

S.I. No. 274 of 1976.

INCOME TAX (CONSTRUCTION CONTRACTS) REGULATIONS, 1976.

The Revenue Commissioners, in exercise of the powers conferred on them by section 17 of the Finance Act, 1970 (No. 14 of 1970), as amended by the Finance Act, 1976 (No. 16 of 1976), hereby make the following Regulations:

1. (1) These Regulations may be cited as the Income Tax (Construction Contracts) Regulations, 1976.

(2) These Regulations shall come into operation on the 6th day of December, 1976.

2. In relation to any payment made to a sub-contractor on or after the 6th day of December, 1976, the Income Tax (Construction Contracts) Regulations, 1971 ( S.I. No. 1 of 1971 ), are hereby amended—

( a ) in Regulation 2—

(i) by the deletion of the definition of "accounting period",

(ii) by the substitution for the definition of "certified sub-contractor" of:

" 'certified sub-contractor', in relation to a principal, means a sub-contractor—

( a ) in respect of whom the principal holds, at the time of making a payment under a construction contract to the sub-contractor, a construction payments card for the year in which the payment is made, and

( b ) in respect of whom the principal has not received a notice under subsection (9) (a) of the principal section.",

(iii) by the substitution for the definition of "principal section" of the following definition:

" 'principal section' means section 17 (inserted by the Finance Act, 1976 (No. 16 of 1976)) of the Finance Act, 1970 (No. 14 of 1970);",

(iv) by the insertion in the definition of "sub-contractor's certificate" after "a certificate" of "of authorisation";

(v) by the substitution for the definition of "uncertified sub-contractor" of the following definition:

" 'uncertified sub-contractor' means a sub-contractor who is not a certified sub-contractor;",

( b ) in Regulation 6 by the substitution of"return, construction payments card or construction tax deduction card" for "or register" in each place where it occurs,

( c ) by the deletion of Regulation 7,

( d ) in Regulation 12—

(i) by the deletion in paragraph (1) of—

(I) "in any accounting period or", and

(II) "accounting period or", in both places where it occurs,

and

(ii) by the deletion in paragraph (3) of "accounting periods or",

( e ) in Regulation 13—

(i) by the deletion, in paragraph (2), of "income" in each place where it occurs,

(ii) by the substitution, in paragraph (3), for subparagraphs (b) and (c) of the following subparagraphs—

"( b ) compute the proportion applicable to the repayment period of the amount of tax—

(i) payable by the claimant for the said year on foot of an assessment or assessments made on him, or, as the case may be,

(ii) estimated, in accordance with paragraph (2) of this Regulation, to be payable by the claimant for that year,

( c ) specify—

(i) the amount or amounts of tax for which the claimant is liable for any year or years other than the year referred to in subparagraph (a) of this paragraph, and

(ii) any amount or amounts which at the date of making any repayment under subparagraph (d) of this paragraph, he is liable to remit under any of the enactments referred to in subsection (4) (c) (ii) of the principal section,

and

( d ) repay to the claimant the excess of the aggregate amount computed under sub-paragraph (a) of this paragraph, as reduced by any part of that amount which has been repaid or set off, over the aggregate of—

(i) the proportion computed under sub-paragraph (b) of this paragraph, and

(ii) the amount or the total of the amounts specified under subparagraph (c) of this paragraph.", and

(iii) by the insertion after paragraph (4) of the following paragraph:

"(5) In relation to a case where a sub-contractor is chargeable to corporation tax, unless the context otherwise requires, in this Regulation, references to tax shall include references to corporation tax and references to a year shall include references to an accounting period.",

( f ) in Regulation 15 by the substitution in paragraph (1) of "(including construction payments cards and construction tax deduction cards)" for "and the register of subcontracts",

( g ) by the insertion after Part V of the Part set out in the Schedule to these Regulations,

and the said definition of "sub-contractor's certificate" and the said Regulations 6, 12 (1), 12 (3), 13 (2) and 15 (1), as so amended, are set out in the Table to this Regulation.

TABLE

"sub-contractor's certificate" means a certificate of authorisation issued to a sub-contractor under subsection (7) of the principal section.

6. (1) Any notice, notification, certificate, requirement, return, construction payments card or construction tax deduction card which is authorised or required to be given, served, made, sent or issued under these Regulations may be sent by post.

(2) If a person delivers to an officer of the Revenue Commissioners any declaration, certificate, statement, return, construction payments card or construction tax deduction card in a prescribed form, he shall be deemed to have been required by a notice under these Regulations to prepare and deliver that declaration, certificate, statement, return, construction payments card or construction tax deduction card.

(3) In proceedings for recovery of a penalty by virtue of subsection (8) of the principal section—

( a ) a certificate signed by an officer of the Revenue Commissioners which certifies that he has examined the relevant records and that it appears from them that a stated notice was duly given to the defendant on a stated day shall be evidence until the contrary is proved that that person received that notice in the ordinary course,

( b ) a certificate signed by an officer of the Revenue Commissioners which certifies that he has examined the relevant records and that it appears from them that, during a stated period, a stated declaration, certificate, statement, return, construction payments card or construction tax deduction card was not received from the defendant shall be evidence until the contrary is proved that the defendant did not, during that period, deliver that declaration, certificate, statement, return, construction payments card or construction tax deduction card,

( c ) a certificate certifying as provided for in sub-paragraph (a) or sub-paragraph (b) of this paragraph and purporting to be signed by an officer of the Revenue Commissioners may be tendered in evidence without proof and shall be deemed until the contrary is proved to have been signed by such officer.

12. (1) Where the Revenue Commissioners have reason to believe that the total amount of tax which a principal was liable under the principal section and these Regulations to remit in respect of the respective income tax months comprised in any year was greater than the amount of tax (if any) paid by the principal in respect of the said months then, without prejudice to any other action which may be taken, they may make an estimate in one sum of the total amount of tax which in their opinion should have been paid in respect of the income tax months comprised in that year and may serve notice on the principal specifying—

( a ) the total amount of tax so estimated,

( b ) the total amount of tax (if any) remitted by the principal in relation to the income tax months comprised in the said year, and

( c ) the balance of tax remaining unpaid.

12. (3) A notice given by the Revenue Commissioners under paragraph (1) of this Regulation may extend to two or more years.

13. (2) Where the amount of tax payable by the claimant for the year within which the repayment period falls has not been finally determined on foot of an assessment, or assessments, made on him, the Revenue Commissioners shall estimate according to the best of their knowledge and belief and in accordance with the information available to them the amount of tax payable by him for that year.

15. (1) Upon request made to him at any premises of a principal by an authorised officer, any person, being the principal or a person employed by the principal at the premises, shall produce to the authorised officer for inspection all such documents and records relating to construction contracts (including construction payments cards and construction tax deduction cards) as may be in such person's power, possession or procurement.

SCHEDULE.

PART VI.

Special Provisions in relation to Certificates of Authorisation, Construction Payments Cards and Construction Tax Deduction Cards.

Certificates of authorisation.

19. (1) A sub-contractor shall, in the space provided therefor, sign the certificate of authorisation issued to him by the Revenue Commissioners before he produces it to a principal in connection with the making of the first payment to him under a construction contract in the period covered by the certificate of authorisation.

(2) A sub-contractor shall, in the space provided therefor, sign the form on which a principal makes application to the Revenue Commissioners for a construction payments card in respect of that sub-contractor.

Powers of inspectors.

20. The power—

( a ) to issue or cancel a certificate of authorisation,

( b ) to give notice, under subsection (9) (a) of the principal section, to a principal of the cancellation of a certificate of authorisation issued to a sub-contractor,

( c ) to advise the person in respect of whom a notice under the said subsection (9) (a) was issued of the issue of such notice and to require that person to return the certificate of authorisation issued to him,

may be exercised by an inspector of taxes.

General provision relating to keeping of records and return by principal at end of year.

21. (1) On making a payment under a construction contract to a certified sub-contractor, a principal shall enter on the construction payments card relating to such sub-contractor the particulars required to be entered on that card regarding such payment.

(2) ( a ) When making the first payment under a construction contract in any year to an uncertified sub-contractor, a principal shall prepare a construction tax deduction card, and shall enter thereon at the time of the making of that payment to the uncertified sub-contractor such particulars as are required to be entered thereon in relation to that payment.

( b ) When making any subsequent payment to that sub-contractor, the principal shall, at the time of the making of such payment, enter on the said construction tax deduction card such particulars as are required to be entered thereon in relation to such payment.

(3) Within ten days from the end of each year the principal shall send to the Revenue Commissioners—

( a ) a construction payments card, in respect of each certified sub-contractor to whom he has made a payment or payments in that year under a construction contract, and there shall be entered on the card particulars of the said payment or payments;

( b ) a construction tax deduction card, in respect of each uncertified sub-contractor to whom he has made a payment or payments in that year under a construction contract, and there shall be entered on the card particulars of the said payment or payments;

( c ) a return, in the prescribed form, in respect of each sub-contractor to whom he has made a payment or payments in that year, showing the total amount of the payment or payments so made and the total tax, if any, deducted therefrom, and

( d ) a statement and declaration in the prescribed form showing the total of the payments so made and the total tax, if any, deducted therefrom:

Provided that, in a case where the principal is a partnership, the statement and declaration shall be signed by the precedent partner within the meaning of Chapter III of Part IV of the Income Tax Act, 1967 (No. 6 of 1967), and, in a case where the principal is a body corporate, the statement and declaration shall be signed either by the secretary or by a director of the body corporate.

Records to be kept by certified sub-contractors.

22. Every certified sub-contractor shall keep and maintain throughout the year a record of all payments received by him during that year and the record shall state, in relation to each such payment, the date of the payment, the amount of the payment and the name of the person from whom the payment was received.

GIVEN this 25th day of November, 1976.

M. K. O'CONNOR,

Revenue Commissioner

EXPLANATORY NOTE.

These Regulations adapt the existing Regulations (made in 1971) to take account of the new scheme relating to the deduction of tax from payments to certain sub-contractors which was provided for by section 21 of the Finance Act, 1976 . The new Regulations come into operation on the 6th December, 1976, and will apply in respect of payments made to sub-contractors on or after that date.

A new Part VI is being added to the existing Regulations. It provides for the signature by a sub-contractor of (a) the certificate of authorisation issued to him and (b) the application to be made by a principal for a construction payments card in respect of that sub-contractor. There are provisions relating to the keeping of records by principals and certified sub-contractors and the making of certain returns by principals.

It is also provided that the power, conferred on the Revenue Commissioners by section 21 of the Finance Act, 1976 , to issue or cancel a certificate of authorisation and to give notice of such cancellation may be exercised by an inspector of taxes.