Finance Act, 1992

Group payments.

50.—(1) Section 105 of the Corporation Tax Act, 1976 , is hereby amended—

(a) by the substitution of the following subsections for subsections (1) and (2):

“(1) Where a company receives from another company (both being companies resident in the State) any payments to which this section applies, and either—

(a) the company making the payment is—

(i) a 51 per cent. subsidiary of the other or of a company so resident of which the other is a 51 per cent. subsidiary, or

(ii) a trading or holding company owned by a consortium the members of which include the company receiving the payments, or

(b) the company receiving the payment is a 51 per cent. subsidiary of the company making the payment,

then, subject to the following provisions of this section, those payments shall be made without deduction of income tax and neither section 434 (which relates to payments not payable out of taxed profits) of the Income Tax Act, 1967 , nor section 31 (which relates to interest payments by companies) of the Finance Act, 1974 , shall apply thereto.

(2) The payments to which this section applies are any payments which, for the purposes of corporation tax, are charges on income of the company making them or would be so if they were not deductible in computing profits or any description of profits or if section 10 (6) (which relates to restriction of allowance of charges on income) did not apply to them:

Provided that this section shall not apply to payments received by a company on any investments, if a profit on the sale of those investments would be treated as a trading receipt of that company.”,

and

(b) by the deletion in subsection (3) of “an election under”.

(2) Section 106 of the Corporation Tax Act, 1976 , is hereby repealed.

(3) This section shall apply and have effect as on and from the date of the passing of this Act.