Finance Act 2012

Amendment of Schedule 24 (relief from income tax and corporation tax by means of credit in respect of foreign tax) to Principal Act.

49.— (1) Schedule 24 to the Principal Act is amended in paragraph 9DB by inserting the following at the end of that paragraph:

“(4) Where as respects any relevant royalties received in an accounting period by a company, any part of the foreign tax cannot, due to an insufficiency of income, be treated as reducing income under paragraph 7(3)(c) or under section 77(6B), then the amount which cannot be so treated shall, for the purposes of this paragraph, be unrelieved foreign tax.

(5) Where, as respects an accounting period, a company is in receipt of royalties from persons not resident in the State and such royalties are taken into account in computing the trading income of a trade carried on by the company, the company may—

(a) reduce the income (in this subparagraph referred to as ‘royalty income’) referable to any such payments by any unrelieved foreign tax, and

(b) allocate such reductions in such amounts and to such of its royalty income for that accounting period as it sees fit.

(6) The aggregate amount of reductions under subparagraph (5) in an accounting period cannot exceed the aggregate of the unrelieved foreign tax in respect of all relevant royalties for that accounting period.”.

(2) This section applies as respects relevant royalties (within the meaning of paragraph 9DB(1)(a) of Schedule 24 to the Principal Act) received on or after 1 January 2012.