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Definition of standard profits.
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38.—(1) The standard profits of a company shall be computed in accordance with whichever of the following paragraphs is applicable to the company, that is to say:—
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(a) if there have been, in respect of the company, three or more consecutive trade years the last of which ended in the year ended on the 31st day of August, 1939, the standard profits of the company shall be the amount of the company's profits for one (to be selected by the company or (in default of such selection) by the Revenue Commissioners) of the last three of the said trade years or the sum of two thousand five hundred pounds, whichever is the greater;
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(b) if there have been, in respect of the company, two and only two consecutive trade years the later of which ended in the year ended on the 31st day of August, 1939, the standard profits of the company shall be the amount of the company's profits for one (to be selected by the company or (in default of such selection) by the Revenue Commissioners) of those two trade years or the sum of two thousand five hundred pounds, whichever is the greater;
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(c) if there has been, in respect of the company, one and only one trade year and that trade year ended in the year ended on the 31st day of August, 1939, the standard profits of the company shall be the amount of the company's profits for that trade year or the sum of two thousand five hundred pounds, whichever is the greater;
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(d) if one of the foregoing paragraphs of this sub-section is applicable to the company and, when excess corporation profits tax is being assessed on the company for a particular accounting period or part of an accounting period, it is found that the standard profits of the company as calculated in accordance with that paragraph is less than the substituted standard as defined in this Part of this Act applicable to the company in respect of the said particular accounting period or part of an accounting period, the standard profits of the company shall be taken for the purpose of that particular assessment to be the said substituted standard;
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(e) if there has not been, in respect of the company, any trade year ending in the year ended on the 31st day of August, 1939, the standard profits of the company shall, for the purpose of the assessment of excess corporation profits tax on the company for any particular accounting period or part of an accounting period, be taken to be whichever of the following amounts is the greater that is to say:—
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(i) the substituted standard as so defined as aforesaid applicable to the company for that particular accounting period or part of an accounting period, or
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(ii) the sum of two thousand five hundred pounds or, where the said particular accounting period or part of an accounting period is less than twelve months, the sum which bears to two thousand five hundred pounds the same proportion as the said accounting period or part of an accounting period bears to twelve months.
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(2) Where excess corporation profits tax is assessed on a company in respect of an accounting period or a part of an accounting period which is less than twelve months and the standard profits of the company are computed otherwise than under either of the two last paragraphs of the next preceding sub-section of this section, the standard profits of the company shall, for the purpose of such assessment, be taken to be the sum bearing the same proportion to the standard profits of such company as computed under the next preceding sub-section of this section (otherwise than as aforesaid) as the said accounting period or part of an accounting period bears to twelve months.
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(3) In the computation of the standard profits of a company, the profits of such company which have to be brought into account for the purpose of such computation shall be determined on the same principles as those on which the profits of a company are determined for the purpose of a charge to corporation profits tax, and the enactments for the time being in force in relation to the determination of profits for the purpose of any such charge shall apply and have effect accordingly.
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