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10 1990

FINANCE ACT, 1990

Chapter IV

Corporation Tax

Rate of corporation tax.

37. —(1) As respects any accounting period ending on or after the 1st day of April, 1991, section 1 (as amended by the Finance Act, 1988 ) of the Corporation Tax Act, 1976 , is hereby amended by the substitution of the following subsection for subsection (1):

“(1) For the financial year 1974 and each subsequent financial year there shall be charged on profits of companies a tax, to be called corporation tax, at the rate of—

(a) 43 per cent. for—

(i) each financial year until and including the year 1990, and

(ii) that part of the financial year 1991 beginning on the 1st day of January, 1991, and ending on the 31st day of March, 1991,

and

(b) 40 per cent. for—

(i) that part of the financial year 1991 beginning on the 1st day of April, 1991, and ending on the 31st day of December, 1991, and

(ii) each subsequent financial year.”.

(2) The Second Schedule shall have effect for the purpose of supplementing this section.

Amendment of section 25 (attribution of distributions to accounting periods) of Finance Act, 1989 .

38. Section 25 of the Finance Act, 1989 , is hereby amended by the substitution in subsection (3) (a) of “6th day of April, 1991,” for “6th day of April, 1990,”.

Exploration expenditure.

39. —As respects expenditure incurred on or after the 1st day of April, 1990, the Finance (Taxation of Profits of Certain Mines) Act, 1974 , is hereby amended—

(a) by the deletion of the proviso to subsection (1) of section 2,

(b) by the deletion, in subsection (2) of section 3, of “but was incurred within a period of ten years prior to the date on which he commences to carry on the said trade”,

(c) by the insertion in subsection (1) of section 4 of “or section 2 as applied by section 7A,” after “section 2 or 3,”, and

(d) by the insertion after section 7 of the following section:

“7A.— (1) For the purposes of this section—

exploration company’ means a company, the business of which for the time being consists primarily of exploring for scheduled minerals;

exploring for scheduled minerals’ means searching in the State for deposits of scheduled minerals or testing such deposits or winning access thereto, and includes the systematic searching for areas containing scheduled minerals and searching by drilling or other means for scheduled minerals within those areas but does not include operations which are operations in the course of developing or working a qualifying mine.

(2) Subject to subsections (3) to (5), for as long as a company—

(a) is an exploration company,

(b) does not carry on a trade of working a qualifying mine, and

(c) incurs capital expenditure (including such expenditure incurred on the provision of plant and machinery) for the purposes of exploring for scheduled minerals,

it shall be deemed for the purposes of sections 2, 3 (4), 6 and 7 and the other provisions of the Tax Acts, except the other provisions of this Act—

(i) to be carrying on a trade of working a qualifying mine,

(ii) to come within the charge to corporation tax in respect of that trade when it first incurs the said capital expenditure, and

(iii) to incur for the purposes of that trade the said expenditure incurred on the provision of plant and machinery,

so that all allowances or charges which fall to be made for an accounting period by virtue of this subsection and section 2, 6 or 7 shall be given effect by treating the amount of any allowance as a trading expense of that trade in the period and by treating the amount on which any such charge is to be made as a trading receipt of that trade in the period.

(3) Where, by virtue of subsection (2), a company is to be treated as incurring a loss in a trade in an accounting period, the company—

(a) shall be entitled to relief in respect of the loss under subsections (1) to (3) of section 16, subsections (1) and (2) of section 18 and section 25 of the Corporation Tax Act, 1976 , as if for the term ‘trading income from the trade’ or ‘trading income’, wherever occurring in sections 16 and 18, there were substituted ‘profits (of whatever description)’, and

(b) subject to subsection (4) (b) (ii), shall not otherwise be entitled to relief in respect of the loss or to surrender relief under subsection (1) of section 116 of the Corporation Tax Act, 1976 , in respect of the loss.

(4) (a) Any asset representing exploration expenditure, in respect of which an allowance or deduction has been made, by virtue of subsection (2) and section 2, to a company shall, for the purposes of section 245 (11) of the Income Tax Act, 1967 , be treated as an asset representing capital expenditure incurred in connection with the mine which the company is deemed to be working by virtue of subsection (2), and the company shall not cease to be deemed to be carrying on the trade of working that mine, so as to be within the charge to corporation tax in respect of that trade, before any sale of such an asset in the event of such a sale.

(b) Where a company begins at any time (in this paragraph referred to as the relevant time) to carry on a trade of working a qualifying mine and, accordingly, ceases to be deemed to carry on such a trade, it shall be treated as carrying on the same trade before and after that time for the purposes of—

(i) any allowance, charge or trade receipt treated as arising by reference to any capital expenditure incurred before the relevant time, and

(ii) relief, other than by virtue of subsection (3), under section 16 (1) of the Corporation Tax Act, 1976 , for any losses arising before the relevant time, in so far as relief has not already been given for those losses by virtue of this section:

Provided that the provisions of this paragraph shall not apply where there is a change in the ownership of the company within a period of—

(I) twelve months ending at the relevant time, or

(II) twenty-four months beginning at the relevant time.

(c) The provisions of the Fifth Schedule to the Finance Act, 1973 , other than paragraphs 8 and 10 of Part I thereof, shall have effect for the purposes of supplementing this subsection as if the references therein to section 39 of that Act were references to this subsection.

(5) (a) Notwithstanding any other provision of the Tax Acts, if an allowance or deduction has been given by virtue of this section in respect of any expenditure, then no other allowance or deduction shall be given by virtue of any provision of the Tax Acts, including this section, in respect of that expenditure.

(b) Paragraph (b) of subsection (1) of section 35 of the Finance Act, 1986 , shall apply to a company for as long as it is deemed by virtue of subsection (2) to be carrying on a trade of working a qualifying mine, as if ‘who is not a company within the charge to corporation tax in respect of the payment’ were deleted from that paragraph.”,

and the said subsection (2) of section 3 and subsection (1) of section 4 (other than the proviso), as so amended, are set out in the Table to this section.

TABLE

(2) Where a person who commences to carry on a trade of working a qualifying mine after the 6th day of April, 1974, incurred exploration expenditure on or after the 6th day of April, 1967, and that expenditure was not incurred in connection with the said qualifying mine, then in taxing the said trade for the chargeable period in which he commenced to carry on the said trade, there shall be made an allowance of an amount equal to the amount of that expenditure.

(1) Where exploration expenditure, in respect of which an allowance may be claimed by virtue of section 2 or 3, or section 2 as applied by section 7A, is or has been incurred by a body corporate (hereinafter in this section referred to as the exploration company) and—

(a) another body corporate is, or is deemed to be, a wholly-owned subsidiary of the exploration company, or

(b) the exploration company is, or is deemed to be, a wholly-owned subsidiary of another body corporate,

the expenditure or so much of it as the exploration company specifies

(i) in the case referred to in paragraph (a) may, at the election of the exploration company, be deemed to have been incurred by such other body corporate (being a body corporate which is, or is deemed to be, a wholly-owned subsidiary of the exploration company) as the exploration company specifies,

(ii) in the case referred to in paragraph (b) may, at the election of the exploration company, be deemed to have been incurred by the body corporate (hereinafter referred to as the parent body) of which the exploration company was, at the time the expenditure was incurred, a wholly-owned subsidiary or by such other body corporate (being a body corporate which is, or is deemed to be, a wholly-owned subsidiary of the parent body) as the exploration company specifies,

and in a case where the said expenditure was incurred on a date prior to the incorporation of the body corporate so specified, the provisions of this Act shall apply, in relation to the granting of any allowance in respect of such expenditure, as if the said body corporate had been in existence at the time the expenditure was incurred and had incurred the expenditure at that time:

Amendment of section 38 (definitions) of Finance Act, 1980 .

40. Section 38 (as amended by section 22 of the Finance Act, 1989 ) of the Finance Act, 1980 , is hereby amended by the substitution for the definition of “relevant accounting period” of the following definition:

“‘relevant accounting period’ means an accounting period or part of an accounting period of a company falling within the period from—

(a) where section 39 (1CC) as inserted by section 45 of the Finance Act, 1984 , applies, the 13th day of April, 1984,

(b) where section 39 (1CC) as so inserted and as amended by section 41 of the Finance Act, 1990, applies, the 1st day of January, 1988,

(c) where section 39 (1CC) as so inserted and as amended by section 22 of the Finance Act, 1989 , applies, the 6th day of April, 1989, or

(d) in any other case, the 1st day of January, 1981,

to the 31st day of December, 2000;”.

Amendment of section 39 (meaning of “goods”) of Finance Act, 1980 .

41. —(1) Subject to subsections (2), (3), (4) and (5), section 39 of the Finance Act, 1980 , is hereby amended—

(a) by the substitution in subsection (1CC) of section 39 of the following paragraph for paragraph (a):

“(a) In this subsection ‘computer services’ means one or more of the following:

(i) data processing services,

(ii) software development services, and

(iii) technical or consultancy services which relate to either or both subparagraphs (i) and (ii),

the work on the rendering of which is carried out in the State in the course of a service undertaking in respect of which—

(I) an employment grant was made by the Industrial Development Authority under section 25 of the Industrial Development Act, 1986 , or

(II) a grant under section 3, or financial assistance under section 4 , of the Shannon Free Airport Development Company Limited (Amendment) Act, 1970 , was made available by the Shannon Free Airport Development Company Limited, or

(III) financial assistance was made available by Údarás na Gaeltachta under section 10 of the Údará s na Gaeltachta Act, 1979 .”,

(b) as respects any relevant accounting period (within the meaning of section 38 of the Finance Act, 1980 ) beginning on or after the 1st day of April, 1990, by the insertion of the following subsections after subsection (1CC3):

“(1CC4) The following provisions shall apply, for the purposes of relief under this Chapter, in relation to a company that carries on a trade not being a relevant trading operation, within the meaning of subsection (5) (a) of section 39A (inserted by section 17 of the Finance Act, 1981 ) of the Finance Act, 1980 , which consists of or includes the repair or maintenance of aircraft, aircraft engines or components:

(a) such repair or maintenance carried out within the State shall be regarded as the manufacture within the State of goods,

(b) any amount receivable in payment for such repair or maintenance so carried out shall be regarded as an amount receivable from the sale of goods, and

(c) subsection (1D) shall have effect as respects the company in relation to a claim by it for relief from tax by virtue of this subsection as it has effect as respects a company in relation to a claim by it for relief from tax by virtue of subsection (1B) or (1C).

(1CC5) (a) In this subsection ‘film’ means a film which is produced—

(i) on a commercial basis with a view to the realisation of profit,

(ii) wholly or principally for exhibition to the public in cinemas or by way of television broadcasting or for training or documentary purposes,

and in respect of which not less than 75 per cent. of the work on the production of which is carried out in the State.

(b) The following provisions shall apply, and shall be deemed always to have applied, for the purposes of relief under this Chapter in relation to a company carrying on a trade which consists of or includes the production of a film:

(i) the production of the film by the company claiming the said relief shall be regarded as the manufacture within the State of goods,

(ii) any amount receivable for the said production shall be regarded as an amount receivable from the sale of goods, and

(iii) subsection (1D) shall have effect as respects the company in relation to a claim by it for relief from tax by virtue of this subsection as it has effect as respects a company in relation to a claim by it for relief from tax by virtue of subsection (1B) or (1C).

(1CC6) The definition of ‘goods’ in subsection (1) shall include—

(a) meat processed within the State in an establishment approved and inspected in accordance with the European Communities (Fresh Meat) Regulations, 1987 (S.I. No. 284 of 1987), and

(b) subject to subsections (4) and (5) (a) (iii), fish which has been subjected to a process of manufacture within the State,

in the course of a trade by the company which, in the relevant accounting period, is the company claiming relief under this Chapter in relation to the trade and references in this Chapter to ‘manufactured’ and cognate words shall be construed accordingly.

(1CC7) The following provisions shall apply, for the purposes of relief under this Chapter, in relation to a company that carries on a trade which consists of or includes the remanufacture and repair of computer equipment or of subassemblies where such equipment or subassemblies were originally manufactured by that company or a connected company (within the meaning of section 157 of the Corporation Tax Act, 1976 ):

(a) such remanufacture or repair carried out within the State shall be regarded as the manufacture within the State of goods,

(b) any amount receivable in payment for such remanufacture or repair so carried out shall be regarded as an amount receivable from the sale of goods, and

(c) subsection (1D) shall have effect as respects the company in relation to a claim by it for relief from tax by virtue of this subsection as it has effect as respects a company in relation to a claim by it for relief from tax by virtue of subsection (1B) or (1C).”,

and

(c) as respects any relevant accounting period (within the meaning of section 38 of the Finance Act, 1980 ) beginning on or after the 1st day of April, 1990, by the addition of the following subsection after subsection (4):

“(5) Without prejudice to the generality of subsection (1) and subject to subsections (1A), (1B), (1C), (1CC), (1CC1), (1CC2), (1CC3), (1CC4), (1CC5), (1CC6) and (1CC7), goods shall not, for the purposes of the definition of ‘goods’ in subsection (1), be regarded as manufactured if they are goods which result from a process—

(a) which consists primarily of any one of the following:

(i) dividing (including cutting), purifying, drying, mixing, sorting, packaging, branding, testing or applying any other similar process to a product, produce or material that is acquired in bulk so as to prepare that product, produce or material for sale or distribution, or any combination of such processes, or

(ii) applying methods of preservation, pasteurisation or maturation or other similar treatment to any foodstuffs, or any combination of such processes, or

(iii) cooking, baking or otherwise preparing food or drink for human consumption which is intended to be consumed, at or about the time it is prepared, whether or not in the building or structure in which it is prepared or whether or not in the building to which it is delivered after being prepared, or

(iv) improving or altering any articles or materials without imposing on them a change in their character, or

(v) repairing, refurbishing, reconditioning, restoring or other similar processing of any articles or materials, or any combination of such processes, or

(b) which, subject to the proviso to subsection (1), is not carried out by the company claiming relief under this Chapter.”.

(2) Where, before the 20th day of April, 1990, eligible shares (being eligible shares within the meaning of section 12 of the Finance Act, 1984 ) in a company (being a company which would, but for the provisions of this section, be a qualifying company within the meaning of section 15 of the said Act of 1984) are issued to an individual who has subscribed for those shares, the provisions of Chapter III of Part I of the said Act of 1984 shall apply as respects his subscription for those shares as they would apply if the company was such a qualifying company.

(3) Where, before the 20th day of April, 1990, eligible shares (being eligible shares within the meaning of section 18 of the Finance Act, 1986 ) in a company (being a company which would, but for the provisions of this section, be a qualifying research and development company within the meaning of section 21 of the said Act of 1986) are issued to an individual who has subscribed for those shares, the provisions of Chapter III of Part I of the said Act of 1986 shall apply as respects his subscription for those shares as they would apply if the company was such a qualifying company.

(4) (a) Section 84A (as amended by this Act) of the Corporation Tax Act, 1976 , shall have effect as respects any interest paid to a company in respect of relevant principal advanced before the 20th day of April, 1990, by that company to a company which carries on in the State a trade which would, but for the provisions of this section, be a specified trade, as if that trade were a specified trade.

(b) In this subsection “relevant principal” and “specified trade” have the same meanings as they have respectively in section 84A (as amended by this Act) of the Corporation Tax Act, 1976 .

(5) (a) Section 40 (as amended by section 53 of the Finance Act, 1986 ) of the Finance Act, 1984 , shall have effect as respects a person who carries on a trade of leasing, and who incurred expenditure, on the provision, before the 20th day of April, 1990, of machinery or plant for leasing, under an obligation entered into before the 20th day of April, 1990, by the lessor and a lessee who carries on a trade which would, but for the provisions of this section, be a specified trade, as if the trade carried on by the lessee were a specified trade.

(b) In this subsection “specified trade” and “trade of leasing” have the same meanings as they have respectively in section 40 (as amended by section 53 of the Finance Act, 1986 ) of the Finance Act, 1984 .

(c) In this subsection an obligation shall be treated as having been entered into before the 20th day of April, 1990, if, but only if, before that date, there was in existence a binding contract in writing under which that obligation arose.

(6) Where corporation tax payable by a company would be reduced under the provisions of section 41 of the Finance Act, 1980 , if, in the definition of “relevant accounting period” in section 38 of the Finance Act, 1980 , “the 31st day of December, 2010” were substituted for “the 31st day of December, 2000”, then that corporation tax shall be so reduced as if “the 31st day of December, 2010” were substituted for “the 31st day of December, 2000” in that definition:

Provided that no corporation tax payable by a company shall be reduced by virtue of this section if that corporation tax would not have been so reduced if the provisions of subsections (1A), (1B) and (1C) (inserted by the Finance Act, 1981 ), subsection (1CC) (inserted by the Finance Act, 1984 ) and subsections (1CC1), (1CC2) and (1CC3) (inserted by the Finance Act, 1987 ) of section 39 of the Finance Act, 1980 , and section 39A (inserted by the Finance Act, 1981 ) and section 39B (inserted by the Finance Act, 1987 ) of the Finance Act, 1980 , had not been enacted.

Amendment of section 28 (relief in relation to income from qualifying shipping trade) of Finance Act, 1987 .

42. —(1) Subsection (1) (as amended by the Finance Act, 1988 ) of section 28 of the Finance Act, 1987 , is hereby amended—

(a) in the definition of “qualifying ship”, by the deletion of paragraph (iv), and

(b) in the definition of “qualifying shipping activities”—

(i) by the deletion of “and” in paragraph (d),

(ii) by the substitution of “the company, or” for “the company;” in paragraph (e), and

(iii) by the insertion, after paragraph (e), of the following paragraph:

“(f) the use of a qualifying ship for the purposes of transporting supplies or personnel to, or providing services in respect of, a mobile or fixed rig, platform, vessel or installation of any kind at sea;”,

and the said definitions, as so amended, are set out in the Table to this section.

(2) For the purposes of Chapter III of the Finance Act, 1984 , any reference therein to section 28 (1) of the Finance Act, 1987 , shall be construed as if subsection (1) had not been enacted.

TABLE

qualifying ship” means a sea-going vessel which—

(a) is owned to the extent of not less than 51 per cent. by a person or persons ordinarily resident in the State,

(b) is registered in the State under Part II of the Mercantile Marine Act, 1955 ,

(c) is of not less than 100 tons gross tonnage, and

(d) is self-propelled,

but notwithstanding anything in paragraphs (a), (b), (c) or (d) of this definition does not include—

(i) a fishing vessel other than a vessel normally used for the purposes of an activity mentioned in paragraph (d) of the definition of qualifying shipping activities in this subsection,

(ii) a tug,

(iii) a vessel (including a dredger) used primarily as a floating platform for working machinery or as a diving platform,

(v) any other vessel of a type which is not normally used for the purposes of qualifying shipping activities;

qualifying shipping activities” means activities carried on by a company in the course of a trade and which consist of—

(a) the use of a qualifying ship for the purpose of carrying by sea passengers or cargo for reward,

(b) the provision, on board the qualifying ship, of services ancillary to the said use of the qualifying ship,

(c) the granting of rights by virtue of which another person provides, or will provide, the said services, on board the said qualifying ship,

(d) the subjecting of fish to a manufacturing process on board a qualifying ship,

(e) the letting on charter of a qualifying ship for use for the said purposes where the operation of the ship, and the crew of the ship, remain under the direction and control of the company, or

(f) the use of a qualifying ship for the purposes of transporting supplies or personnel to, or providing services in respect of, a mobile or fixed rig, platform, vessel or installation of any kind at sea;

Amendment of section 10 (allowance of charges on income) of Corporation Tax Act, 1976 .

43. Section 10 of the Corporation Tax Act, 1976 , is hereby amended, as respects payments made in any accounting period ending on or after the 6th day of April, 1990, by the substitution of the following subsection for subsection (4):

“(4) No such payment as is mentioned in subsection (3) (a) made by a company to a person not resident in the State shall be treated as a charge on income unless it is a payment—

(a) from which, in accordance with—

(i) the provisions of section 434 of the Income Tax Act, 1967 (which relates to interest, etc., not payable out of taxed profits), or

(ii) the said provisions as applied by section 31 of the Finance Act, 1974 ,

except where the company has been authorised by the Revenue Commissioners to do otherwise, the company deducts income tax which it accounts for under the said section 434 and section 151 of the Corporation Tax Act, 1976 , or under the said section 434 and section 51 of the Finance Act, 1990, as the case may be, or

(b) which is payable out of income which is brought into charge to tax under Case III of Schedule D and which arises from securities and possessions outside the State.”.

Amendment of section 116 (kinds of group relief) of Corporation Tax Act, 1976 .

44. —(1) Section 116 of the Corporation Tax Act, 1976 , is hereby amended as respects any accounting period ending on or after the 1st day of June, 1990, by the addition of the following subsection after subsection (9):

“(10) (a) References in the preceding subsections to a surrendering company do not include references to a company carrying on life business.

(b) For the purposes of this section ‘life business’ shall be construed in accordance with section 50 (1).”.

(2) (a) For the purposes of subsection (1) and the application of section 116 of the Corporation Tax Act, 1976 , to the surrender of relief by a company carrying on life business where an accounting period begins before the 1st day of June, 1990, and ends on or after that day, that period shall be divided into one part, beginning on the day on which the accounting period begins and ending on the 31st day of May, 1990, and another part beginning on the 1st day of June, 1990, and ending on the day on which the accounting period ends, and both parts of the accounting period shall be treated as if they were separate accounting periods.

(b) In this subsection “life business” shall be construed in accordance with section 50 (1) of the Corporation Tax Act, 1976 .

Trust for Community Initiatives.

45. —(1) In this section “the Trust” means “The Trust for Community Initiatives” established by trust deed dated the 18th day of April, 1990, one of the trustees of which is a company incorporated on the 18th day of April, 1990, as the Trustee for Community Initiatives and to which a licence under section 24 of the Companies Act, 1963 , relates.

(2) This section applies to a gift of money which—

(a) on or after the 20th day of April, 1990, and before the 31st day of March, 1991, is made to the trustees of the Trust and is accepted by them,

(b) is to be applied by the said trustees solely for the objects of the Trust,

(c) would not, apart from subsection (3), be deductible in computing for the purposes of corporation tax the profits or gains of a trade or profession, and

(d) is not income to which the provisions of section 439 of the Income Tax Act, 1967 , apply.

(3) Subject to subsection (2), where a company makes a gift to which this section applies and claims relief from tax by reference thereto, the net amount thereof shall, for the purposes of corporation tax, be treated as—

(a) a deductible trading expense of a trade carried on by the company, or

(b) an expense of management deductible in computing the total profits of the company,

incurred by it in the accounting period in which the gift is made:

Provided that in determining the net amount of the gift, the amount or value of any consideration received by the said company as a result of making the gift, whether received directly or indirectly from the trustees of the Trust or any other person, shall be deducted from the amount of the gift.

(4) A claim under this section shall be made with the return required to be delivered under section 10 of the Finance Act, 1988 , for the accounting period in which the payment is made.

Amendment of section 84A (limitation on meaning of “distribution”) of Corporation Tax Act, 1976 .

46. —Section 84A (as amended by the Finance Act, 1989 ) of the Corporation Tax Act, 1976 , is hereby amended—

(a) by the insertion after subsection (3) of the following subsection:

“(3A) (a) Notwithstanding subsection (2), where at any time on or after the 31st day of January, 1990, the total of the amounts of relevant principal (hereafter in this subsection referred to as the ‘current amounts of relevant principal’) advanced by a company in respect of relevant securities held, directly or indirectly, by the company at that time is in excess of a limit, being a limit equal to 75 per cent. of the total of the amounts of relevant principal advanced by the company in respect of relevant securities held, directly or indirectly, by the company on the 12th day of April, 1989, then any interest paid to the company in respect of relevant principal advanced by the company on or after the 31st day of January, 1990, which relevant principal is included in the current amounts of relevant principal, shall not be treated as a distribution for the purposes of this Act in the hands of the company:

Provided that where the total of the amounts of relevant principal advanced by a company in respect of relevant securities held, directly or indirectly, by the company on the 1st day of April, 1990, is less than the said limit, this paragraph shall have effect, in relation to interest paid to the company in the period from the 1st day of April, 1990, to the 31st day of December, 1991 (being interest paid in respect of relevant principal advanced by the company in that period), as if the said limit were the total of the amounts of relevant principal so advanced as of the 1st day of April, 1990, unless the company proves that it has, as far as possible, at all times on or after the 1st day of April, 1990, advanced to borrowers relevant principal in respect of the interest on which the provisions of paragraph (a) do not, or would not, apply by virtue of the provisions of paragraph (b).

(b) Where, apart from this paragraph, any part of any interest paid to a company in respect of relevant principal advanced by the company in the period from the 31st day of January, 1990, to the 31st day of December, 1991, would not be treated as a distribution for the purposes of this Act in the hands of the company by virtue only of the provisions of paragraph (a), then the provisions of that paragraph shall not apply in relation to so much of that interest as is paid in that period if—

(i) the relevant principal is advanced by the company to a borrower who was in negotiation, before the 31st day of January, 1990, with any company for an amount of relevant principal,

(ii) the borrower had received before the 31st day of January, 1990, a written offer of grant aid from the Industrial Development Authority, the Shannon Free Airport Development Company Limited or Údarás na Gaeltachta in respect of a specified trade or a proposed specified trade for the purposes of which trade the relevant principal is borrowed,

(iii) the specified trade is a trade which the borrower commenced to carry on after the 31st day of January, 1990, or is a specified trade of the borrower in respect of which he is committed, under a business plan approved by the Industrial Development Authority, the Shannon Free Airport Development Company Limited or Údarás na Gaeltachta, to the creation of additional employment,

(iv) the specified trade of the borrower is selected by the Industrial Development Authority for inclusion in a list, approved by the Minister for Industry and Commerce and the Minister for Finance, which list specifies a particular amount of relevant principal in respect of each trade which amount is considered to be essential for the success of that trade, and

(v) the borrower, or a company connected (within the meaning of section 157 (5)) with the borrower, is not a company which commenced to carry on relevant trading operations (within the meaning of section 39B of the Finance Act, 1980 ) after the 20th day of April, 1990, or intends to commence to carry on such trading operations:

Provided that this paragraph shall not apply to any interest in respect of any relevant principal advanced after the time the total of the amounts of relevant principal to which this paragraph applies, advanced by all lenders who have made such advances, exceeds £170,000,000.

(c) Notwithstanding section 21 (2) (b) of the Finance Act, 1989 , for the purposes of this subsection, relevant principal advanced by a company at any time on or after the 31st day of January, 1990, includes any relevant principal advanced on or after that day to a borrower under an agreement entered into before that day.

(d) For the purposes of this subsection, where a company which has, on or after the 31st day of January, 1990, advanced relevant principal to a borrower under the terms of an agreement and, under the terms of that or any other agreement, the company assigns to another company part or all of its rights and obligations under the first-mentioned agreement in relation to the relevant principal, such assignment shall be deemed not to have taken place.”,

(b) by the substitution in subsection (5) of “In subsections (2), (3), (3A) and (4),” for “In subsections (2), (3) and (4),”, and

(c) by the substitution in subsection (6) of “in subsections (2) and (3A)” for “in subsection (2)”.

Amendment of section 101 (surcharge on close company's undistributed investment and estate income) of Corporation Tax Act, 1976 .

47. Section 101 of the Corporation Tax Act, 1976 , is hereby amended, as respects accounting periods ending on or after the 1st day of April, 1990—

(a) by the substitution, in subsection (1), of “there shall be charged on the company an additional duty” for “there shall be charged on the company for the accounting period an additional duty”,

(b) by the substitution of the following subsection for subsection (5):

“(5) A surcharge made under this section on a company in respect of an accounting period (in this subsection referred to as the first-mentioned accounting period) shall—

(a) be charged on the company for the earliest accounting period which ends on or after a day which is twelve months after the end of the first-mentioned accounting period, and

(b) be treated as corporation tax chargeable for that accounting period:

Provided that where there is no such accounting period so ending, the surcharge shall be charged for, and treated as corporation tax of, the accounting period in respect of which it is made.”,

and the said subsection (1) (other than the proviso), as so amended, is set out in the Table to this section.

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(1) Where for an accounting period of a close company, the aggregate of the distributable investment income and the distributable estate income exceeds the distributions of the company for the accounting period, there shall be charged on the company an additional duty of corporation tax (referred to hereafter in this section as a surcharge) amounting to 20 per cent. of the excess:

Amendment of Section 162 (surcharge on undistributed income of service companies) of Corporation Tax Act, 1976 .

48. Section 162 of the Corporation Tax Act, 1976 , is hereby amended, as respects accounting periods ending on or after the 1st day of April, 1990—

(a) by the substitution, in subsection (4), of “there shall be charged on the company an additional duty” for “there shall be charged on the company for the accounting period an additional duty”, and

(b) by the substitution, in subsection (5), of “subsections (2), (3) and (4), subsection (5) (as amended by section 47 of the Finance Act, 1990) and subsection (6) of section 101” for “section 101 (2) (3) (4) (5) (6)”,

and the said subsections (4) (other than the proviso) and (5), as so amended, are set out in the Table to this section.

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(4) Where for an accounting period of a service company, the aggregate of—

(a) four-fifths of the distributable income, and

(b) one-fifth of the aggregate of the distributable investment income and the distributable estate income

exceeds the distributions of the company for the accounting period, there shall be charged on the company an additional duty of corporation tax (in this section referred to as a surcharge) amounting to 20 per cent. of the excess:

(5) The provisions of section 101 (1) shall not apply in relation to a service company but the provisions of subsections (2), (3) and (4), subsection (5) (as amended by section 47 of the Finance Act, 1990) and subsection (6) of section 101 shall apply in relation to a surcharge made under this section as they apply in relation to a surcharge made under the said section 101 with the substitution in section 101 (2) of a reference to subsection (4) of this section for the reference to subsection (1) of that section.

Amendment of section 151 (income tax on payments) of Corporation Tax Act, 1976 .

49. Section 151 of the Corporation Tax Act, 1976 , is hereby amended, as respects accounting periods ending on or after the 1st day of April, 1990—

(a) by the substitution, in subsection (3), of “inspector” for “Collector-General”,

(b) by the substitution, in subsection (4), of “nine months” for “six months”,

(c) in subsection (5)—

(i) by the substitution of “by which preliminary tax (if there were any) for the accounting period for which the return is required to be made under subsection (3) is due and payable” for “by which the return is to be made”, and

(ii) by the deletion of “if that tax, or any part of it, is not paid on or before the due date”,

(d) by the substitution of the following subsections for subsections (10), (11) and (12):

“(10) (a) Where a company makes a relevant payment on a date which does not fall within an accounting period the company shall make a return of that payment within six months from that date, and the income tax for which the company is accountable in respect of that payment shall be due at the time by which the return is to be made.

(b) Any assessment in respect of tax payable under this subsection shall be treated as relating to the year of assessment in which the payment is made.

(c) Subsection (11) shall not apply to an assessment under this subsection.

(11) (a) Subject to subsection (10) (b), income tax payable (after income tax borne by the company by deduction has been set, by virtue of any claim under subsection (7), against income tax which it is liable to pay under subsection (5)) in respect of relevant payments in an accounting period shall, for the purposes of the charge, assessment, collection and recovery from the company making the payments of that tax and of any interest or penalties thereon, be treated and described as corporation tax payable by that company for that accounting period, notwithstanding that for all other purposes of the Tax Acts it is income tax:

Provided that the tax paid by a company which is treated as corporation tax by virtue of this subsection shall be repaid to the company if it would have been so repaid under subsection (7) had it been treated as income tax paid by the company.

(b) Any tax assessable under one or more of the provisions of this section may be included in one assessment if the tax so included is all due on the same date.

(12) Nothing in the foregoing provisions of this section shall be taken to prejudice any powers conferred by the Tax Acts for the recovery of tax by means of an assessment or otherwise.”,

and

(e) by the substitution, in paragraph (a) of subsection (13), of “tax charged by this section modify any provision of the Tax Acts” for “income tax charged by this section modify any provision of the Income Tax Acts”,

and the said subsections (3), (4) and (5) and the said paragraph (a) of subsection (13), as so amended, are set out in the Table to this section.

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(3) A company shall for each of its accounting periods make, in accordance with this section, a return to the inspector of the relevant payments made by it in that period and of the income tax for which the company is accountable in respect of those payments.

(4) A return for any period for which a return is required to be made under this section shall be made within nine months from the end of that period.

(5) Income tax in respect of any payment required to be included in a return under this section shall be due at the time by which preliminary tax (if there were any) for the accounting period for which the return is required to be made under subsection (3) is due and payable, and income tax so due shall be payable by the company without the making of any assessment; but income tax which has become due as aforesaid may be assessed on the company (whether or not it has been paid when the assessment is made).

(a) The Revenue Commissioners may, by regulations made for the purposes mentioned in subsection (2), modify, supplement or replace any of the provisions of this section; and references in this Act and in any other enactment to this section shall be construed as including references to any such regulations; and without prejudice to the generality of the foregoing, the regulations may in relation to tax charged by this section modify any provision of the Tax Acts relating to returns, assessments, claims or appeals or may apply any such provision with or without modification.

Amendment of section 152 (provisions as to tax under section 151) of Corporation Tax Act, 1976 .

50. Section 152 of the Corporation Tax Act, 1976 , is hereby amended by the insertion after subsection (4) (inserted by the Finance Act, 1981 ) of the following subsection:

“(5) Subsections (1), (2) and (3) shall have effect only in respect of a company to which the provisions of subsection (10) of section 151 relates.”.

Income tax on payments made by non-resident companies.

51. —(1) Subject to subsection (4), the provisions of subsection (2) shall have effect as respects an accounting period of a company which is not resident in the State if the company is—

(a) required, by virtue of the provisions of section 434 (2) of the Income Tax Act, 1967 , to deliver an account to the Revenue Commissioners, and

(b) within the charge to corporation tax in respect of the accounting period.

(2) Where this subsection has effect as respects an accounting period of a company, then—

(a) the company shall make a return to the inspector of—

(i) payments made by the company in the accounting period and in respect of which income tax is required to be deducted by virtue of the provisions of section 434 (1) of the Income Tax Act, 1967 , and

(ii) the tax deducted out of those payments by virtue of the said section 434 (1),

and

(b) income tax in respect of which a return falls to be made under paragraph (a) shall, for the purposes of the charge, assessment, collection and recovery from the company making the payments of that tax and of any interest or penalties thereon, be treated as if it were corporation tax chargeable for the accounting period for which the return is required under paragraph (a).

(3) Section 434 of the Income Tax Act, 1967 , is hereby amended by the substitution for subsection (5A) (inserted by section 151 of the Corporation Tax Act, 1976 ) of the following subsection:

“(5A) Subsections (2), (3) and (5) have effect subject to the provisions of section 151 of the Corporation Tax Act, 1976 , and section 51 of the Finance Act, 1990, with respect to the time and manner in which certain companies are to account for and pay income tax in respect of—

(a) payments from which tax is deductible, and

(b) any amount which is deemed to be an annual payment.”.

(4) This section shall have effect as respects accounting periods ending on or after the 1st day of April, 1990.

Amendment of section 41 (basis of relief from corporation tax) of Finance Act, 1980 .

52. Section 41 of the Finance Act, 1980 , is hereby amended by the insertion, in subsection (1), after “means the corporation tax” of “(other than an amount which, by virtue of sections 101, 151 and 162 of the Corporation Tax Act, 1976 , as amended, respectively, by sections 47 , 49 and 48 of the Finance Act, 1990, and of section 51 of the Finance Act, 1990, falls to be treated as corporation tax of an accounting period)”.

Amendment of section 58 (basis of relief from corporation tax) of Corporation Tax Act, 1976 .

53. Section 58 (as amended by section 42 of the Finance Act, 1980 ) of the Corporation Tax Act, 1976 , is hereby amended by the insertion, in subsection (10), after “means the corporation tax” of “(other than an amount which, by virtue of sections 101, 151 and 162, as amended, respectively, by sections 47 , 49 and 48 of the Finance Act, 1990, and of section 51 of the Finance Act, 1990, falls to be treated as corporation tax of an accounting period)”.

Amendment of section 143 (return of profits) of Corporation Tax Act, 1976 .

54. Section 143 (as amended by section 16 of the Finance Act, 1981 ) of the Corporation Tax Act, 1976 , is hereby amended by the substitution of the following subsection for subsection (1):

“(1) A company may be required by a notice served on it by an inspector or other officer of the Revenue Commissioners to deliver to the officer within the time limited by the notice a return of—

(a) the profits of the company computed in accordance with this Act—

(i) specifying the income taken into account in computing those profits, with the amount from each source,

(ii) giving particulars of all disposals giving rise to chargeable gains or allowable losses under the provisions of the Capital Gains Tax Acts and this Act and particulars of those chargeable gains or allowable losses, and

(iii) giving particulars of all charges on income to be deducted against those profits for the purpose of the assessment to corporation tax other than those included in paragraph (c),

(b) the distributions received by the company from companies resident in the State and the tax credits to which the company is entitled in respect of those distributions,

(c) payments made from which income tax is deductible and to which the provisions of subsections (2) to (5) of section 434 (interest, etc., not payable out of taxed profits) of the Income Tax Act, 1967 , apply, and

(d) all amounts which under section 98 (loans to participators etc.) of the Corporation Tax Act, 1976 , are deemed to be annual payments.”.

Amendment of section 50 (returns and collection of advance corporation tax) of Finance Act, 1983 .

55. Section 50 of the Finance Act, 1983 , is hereby amended, as respects accounting periods ending on or after the 1st day of April, 1990—

(a) by the substitution, in subsection (2), of “inspector” for “Collector-General”,

(b) by the substitution, in subsection (3), of “nine months” for “six months”, and

(c) in subsection (6)—

(i) by the substitution of “within six months from the end of the accounting period for which the return is required to be made under subsection (3)” for “at the time by which the return is to be made”, and

(ii) by the deletion of “if that tax, or any part of it, is not paid on or before the due date”,

and the said subsections (2), (3) and (6), as so amended, are set out in the Table to this section.

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(2) A company shall, for each of its accounting periods make, in accordance with this section, a return to the inspector of the distributions made and distributions received by it in that period and of the advance corporation tax (if any) payable by it in respect of the distributions made by it.

(3) A return for any period for which a return is required to be made under this section shall be made within nine months from the end of that period.

(6) Advance corporation tax in respect of any distribution required to be included in a return under this section shall be due within six months from the end of the accounting period for which the return is required to be made under subsection (3) and shall be paid to the Collector-General, and advance corporation tax so due shall be payable by the company without the making of any assessment; but advance corporation tax which has become due as aforesaid may be assessed on the company (whether or not it has been paid when the assessment is made).

Exemption of certain income of Housing Finance Agency p.l.c.

56. —Chapter IV of Part I of the Finance Act, 1985 , is hereby amended by the substitution of the following section for section 24:

“24.— Notwithstanding any provision of the Corporation Tax Acts, income arising to the Housing Finance Agency p.l.c.—

(a) in any accounting period ending after the 8th day of February, 1982, from the business of making loans and advances under section 5 of the Housing Finance Agency Act, 1981 , which income would, but for this section, have been chargeable to corporation tax under Case I of Schedule D, and

(b) in any accounting period ending after the 5th day of April, 1990, which income would, but for this section, have been chargeable to corporation tax under Case III of Schedule D,

shall be exempt from corporation tax.”.