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Amendment of section 766 (tax credit for research and development expenditure) of Principal Act.
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66.— (1) Section 766 of the Principal Act is amended—
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(a) in subsection (1)(a)—
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(i) by inserting the following after the definition of “appropriate inspector”:
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“ ‘authorised officer’ means an officer of the Revenue Commissioners authorised by them in writing for the purposes of this section;”,
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and
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(ii) in the definition of “expenditure on research and development” by inserting “wholly and exclusively” after “incurred by the company”,
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(b) by inserting the following after subsection (1):
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“(1A) (a) Where expenditure is incurred by a company on machinery or plant which qualifies for any allowance under Part 9 or this Chapter and the machinery or plant will not be used by the company wholly and exclusively for the purposes of research and development, the amount of the expenditure attributable to research and development shall be such portion of that expenditure as appears to the inspector (or on appeal the Appeal Commissioners) to be just and reasonable, and such portion of the expenditure shall be treated for the purposesof subsection (1)(a) as incurred by the company wholly and exclusively in carrying on research and development activities.
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(b) Where, at any time, the apportionment made under paragraph (a), or a further apportionment made under this paragraph, ceases to be just and reasonable, then—
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(i) such further apportionment shall be made at that time as appears to the inspector (or on appeal the Appeal Commissioners) to be just and reasonable,
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(ii) any such further apportionment shall supersede any earlier apportionment, and
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(iii) any such adjustments, assessments or repayments of tax shall be made as are necessary to give effect to any apportionment under this subsection.”,
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and
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(c) by inserting the following after subsection (6):
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“(7) (a) The Revenue Commissioners may in relation to a claim by a company under this section or section 766A—
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(i) consult with any person who in their opinion may be of assistance to them in ascertaining whether the expenditure incurred by the company was incurred in the carrying on by it of research and development activities, and
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(ii) notwithstanding any obligation as to secrecy or other restriction on the disclosure of information imposed by, or under, the Tax Acts or any other statute or otherwise, but subject to paragraph (b), disclose any detail in the company’s claim under this section, or under section 766A, which they consider necessary for the purposes of such consultation.
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(b) (i) Before disclosing information to any person under paragraph (a), the Revenue Commissioners shall make known to the company—
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(I) the identity of the person who they intend to consult, and
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(II) the information they intend to disclose to the person.
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(ii) Where the company shows to the satisfaction of the Revenue Commissioners (or on appeal to the Appeal Commissioners) that disclosure of such information to that person could prejudice the company’s business, then the Revenue Commissioners shall not make such disclosure.
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(8) Any functions which are authorised by subsection (7) to be performed or discharged by the Revenue Commissioners may be performed or discharged by an authorised officer and any references in subsection (7) to the Revenue Commissioners shall, with any necessary modifications, be construed as including references to the authorised officer.”.
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(2) This section applies for accounting periods ending on or after 2 February 2006.
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