Income Tax Act, 1967.

Chapter III

Payments by Companies to Associated Companies in Respect of Losses


323.—In this Chapter—

“accounting period” means, in relation to a company, a period for which the accounts of the company have been made up;

“auxiliary company” means a company incorporated not earlier than the 14th day of December, 1961, and not later than the 31st day of March, 1965, being a company—

(a) of whose ordinary share capital—

(i) a part is held beneficially by each of two or more companies, and

(ii) not less than 95 per cent. is held beneficially by companies, and

(b) which does not hold any stock, share or security issued by a company holding beneficially a part of such ordinary share capital;

“capital allowances” means allowances, other than allowances falling to be made in computing profits or gains, under section 241 or Part XIV, XV, XVI or XVII;

“company” means a body corporate resident in the State and carrying on a trade;

“deficiency payment” means a payment made to an auxiliary company by one of its principal companies under an agreement providing for the principal company to bear, or share in, losses or a particular loss sustained by the auxiliary company in a trade carried on by it, not being a payment which, apart from this Chapter, would fall to be taken into account in computing profits or gains or losses of either company or would fall to be treated as income of the auxiliary company;

“ordinary share capital” means, in relation to a company, all the issued capital (by whatever name called) of the company, other than capital the holders whereof have a right to a dividend at a fixed rate or a rate fluctuating in accordance with the rate of income tax, but have no other right to share in the profits of the company;

“principal company” means, in relation to an auxiliary company a company which holds beneficially a part of the ordinary share capital of that company;

“trade” means a trade carried on wholly or partly in the State.