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Amendment of section 831 (implementation of Council Directive No. 90/435/EEC concerning the common system of taxation applicable in the case of parent companies and subsidiaries of different Member States) of Principal Act.
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34.—Section 831 of the Principal Act is amended—
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(a) in subsection (1)—
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(i) in the definition of “company” by deleting “, other than in the expression ‘unlimited company’ in subsection (5A),”,
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(ii) in the definition of “the Directive” by inserting “, as amended by Council Directive No. 2003/123/EC of 22 December 20031
,” after “1990”,
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(iii) in the definition of “parent company”—
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(I) by substituting the following for paragraph (i):
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“(i) a company which owns at least 5 per cent of the share capital of another company which is not resident in the State, or”,
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and
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(II) by substituting “5 per cent” for “25 per cent” in each place where it occurs in paragraphs (ii), (I) and (II),
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(b) in subsection (2)—
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(i) by deleting “which is resident in this State”, and
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(ii) in paragraph (a)—
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(I) by substituting the following for subparagraph (i):
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“(i) any witholding tax charged on the distribution by a Member State pursuant to a derogation duly given from Article 5.1 of the Directive,”,
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(II) in subparagraph (ii) by substituting “resident, and” for “resident,”, and
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(III) by inserting the following after subparagraph (ii):
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“(iii) any foreign tax borne by a company that would be allowed under paragraph 9B of Schedule 24 if in subparagraphs (2) and (3) ‘and is connected with the relevant company’ in each place where it occurs were deleted.”,
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(c) by inserting the following after subsection (2):
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“(2A) Subject to subsections (3) and (4), where by virtue of the legal characteristics of a subsidiary (being a company which is not resident in the State) of a parent company, the parent company is chargeable to tax in the State on its share of the profits of the subsidiary company as they arise credit shall be allowed for so much of—
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(a) any foreign tax borne by the subsidiary, and
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(b) any foreign tax that would be treated as tax paid by the subsidiary company under paragraph 9B of Schedule 24 if—
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(i) the subsidiary company were the foreign company for the purposes of that paragraph, and
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(ii) in subparagraphs (2) and (3) of that paragraph ‘and is connected with the relevant company’ in both places where it occurs were deleted,
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as is properly attributable to the proportion of the subsidiary's profits which are chargeable on the parent company in the State against corporation tax in respect of the profits so chargeable on the parent company to the extent that credit for such foreign tax would not otherwise be so allowed.”,
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(d) in subsection (3) by inserting “or (2A)” after “(2)(a)”, and
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(e) by deleting subsection (5A).
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1 OJ No. L7 of 13.1.2004, p.41 |
