Finance Act, 1983


44.—(1) Where a company receives dividends from another company (both being companies resident in the State) and the company paying the dividends is—

(a) 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

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

then, subject to the following provisions of this section, the company receiving the dividends and the company paying them may jointly elect that this subsection shall apply to the dividends received from the latter by the former, and so long as the election is in force—

(i) any such dividends shall be treated as not being distributions for the purposes of either section 38 or 41 , and

(ii) the tax credits in respect of those dividends shall not be available for payment, under any provision of the Corporation Tax Acts, to the company by which the dividends are received.

(2) Subsection (1) shall not apply to any dividend 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.

(3) Where a company purports by virtue of an election under subsection (1) to pay any dividend without paying advance corporation tax and advance corporation tax ought to have been paid, the inspector may make such assessments, adjustments or set-offs as may in his judgment be required for securing that the resulting liabilities to tax (including interest on unpaid tax) of the company paying and the company receiving the dividend are, so far as possible, the same as they would have been if the advance corporation tax had been duly paid.

(4) Where tax assessed under subsection (3) on the company which paid the dividend is not paid by that company before the expiry of three months from the date on which that tax is payable, that tax shall, without prejudice to the right to recover it from that company, be recoverable from the company which received the dividend.

(5) Subsections (5) and (6) of section 105 of the Corporation Tax Act, 1976 , shall apply for the purposes of this section as they apply for the purposes of that section.

(6) References in this section to a dividend or dividends received by a company apply to any received by another person on behalf of or in trust for the company but not to any received by the company on behalf of or in trust for another person.

(7) The provisions of section 106 of the Corporation Tax Act, 1976 , shall, with any necessary modifications, have effect for the purposes of this section as they have effect for the purposes of section 105 of that Act.