First Previous (Chapter 6 Income Tax and Corporation Tax: Tax reliefs for the provision of Park and Ride Facilities and for Certain Related Developments) Next (Chapter 8 Capital Gains Tax)

2 1999

FINANCE ACT, 1999

Chapter 7

Corporation Tax

Rate of corporation tax.

71. —(1) Section 21 of the Principal Act is hereby amended by the substitution of the following subsection for subsection (1):

“(1) Corporation tax shall be charged on the profits of companies at the rate of—

(a) 32 per cent for the financial year 1998,

(b) 28 per cent for the financial year 1999,

(c) 24 per cent for the financial year 2000,

(d) 20 per cent for the financial year 2001,

(e) 16 per cent for the financial year 2002,

(f) 12½ per cent for the financial year 2003 and each subsequent financial year.”.

(2) Schedule 1 shall have effect for the purposes of supplementing this section.

Amendment of section 22 (reduced rate of corporation tax for certain income) of Principal Act.

72. —(1) Section 22 of the Principal Act is hereby amended—

(a) in subsection (1)—

(i) in paragraph (a), by the substitution for clauses (I) to (III) of the following clauses:

“(I) as respects accounting periods ending on or after the 1st day of April, 1997, and before the 1st day of January, 1998, 28 per cent, and

(II) as respects accounting periods ending on or after the 1st day of January, 1998, and before the 1st day of January, 2000, 25 per cent.”, and

(ii) by the deletion of paragraph (b),

(b) by the substitution of the following subsection for subsection (2):

“(2) For the purposes of subsection (1) and subject to subsections (3) and (4), the specified amount in relation to an accounting period of a company shall be an amount determined by the formula—

L x

N

x

1

12

A

where—

L is—

(a) in the case of an accounting period ending before the 1st day of January, 1999, £50,000,

(b) in the case of an accounting period ending on or after the 1st day of January, 1999, £100,000,

N is the number of months in the accounting period, and

A is one plus the number of associated companies which the company has in the accounting period.”, and

(c) by the insertion of the following subsection after subsection (7):

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

(a) where an accounting period of a company begins before the 1st day of January, 1998, and ends on or after that day, it shall be divided into 2 parts, one beginning on the day on which the accounting period begins and ending on the 31st day of December, 1997, and the other beginning on the 1st day of January, 1998, and ending on the day on which the accounting period ends, and both parts shall be treated as if they were separate accounting periods of the company,

(b) where an accounting period of a company begins before the 1st day of January, 1999, and ends on or after that day, it shall be divided into 2 parts, one beginning on the day on which the accounting period begins and ending on the 31st day of December, 1998, and the other beginning on the 1st day of January, 1999, and ending on the day on which the accounting period ends, and both parts shall be treated as if they were separate accounting periods of the company, and

(c) where an accounting period of a company begins before the 1st day of January, 2000, and ends on or after that day, it shall be divided into 2 parts, one beginning on the day on which the accounting period begins and ending on the 31st day of December, 1999, and the other beginning on the 1st day of January, 2000, and ending on the day on which the accounting period ends, and both parts shall be treated as if they were separate accounting periods of the company.”.

(2) Section 22 of the Principal Act is hereby repealed with effect from the 1st day of January, 2000.

Higher rate of corporation tax.

73. —The Principal Act is hereby amended by the insertion of the following section after section 21:

“Higher rate of corporation tax.

21A.—(1) In this section—

‘construction operations’ means operations of any of the descriptions referred to in the definition of ‘construction operations’ in section 530(1), other than operations referred to in paragraph (f) of that definition;

‘dealing in or developing land’ shall be construed in accordance with Chapter 1 of Part 22;

‘excepted operations’ means any one or more of the following operations or activities—

(a) dealing in or developing land, other than such part of that operation or activity as consists of construction operations,

(b) working minerals, and

(c) petroleum activities;

‘excepted trade’ means a trade consisting only of trading operations or activities which are excepted operations or, in the case of a trade consisting partly of excepted operations and partly of other operations or activities, the part of the trade consisting only of excepted operations which is treated as a separate trade by virtue of subsection (2);

‘land’ includes foreshore and land covered with water, and ‘dry land’ means land not permanently covered by water;

‘minerals’ means all substances (other than the agricultural surface of the ground and other than turf or peat) in, on or under land, whether obtainable by underground or by surface working, and includes all mines, whether or not they are already opened or in work, and also includes the cubic space occupied or formerly occupied by minerals;

‘petroleum’ has the same meaning as in section 2(1) of the Petroleum and Other Minerals Development Act, 1960 ;

‘petroleum activities’ means any one or more of the following activities—

(a) petroleum exploration activities,

(b) petroleum extraction activities, and

(c) the acquisition, enjoyment or exploitation of petroleum rights;

‘petroleum exploration activities’ means activities carried on in searching for deposits of petroleum, in testing or appraising such deposits or in winning access to such deposits for the purposes of such searching, testing or appraising;

‘petroleum extraction activities’ means activities carried on in—

(a) winning petroleum from any land, including searching in that land and winning access to such petroleum,

(b) transporting as far as dry land petroleum so won from a place not on dry land, or

(c) effecting the initial treatment and storage of petroleum so won from any land;

‘petroleum rights’ means rights to petroleum to be extracted or to interests in, or to the benefit of, petroleum;

‘working’, in relation to minerals, includes digging, searching for, mining, getting, raising, taking, carrying away and treating minerals and the sale or other disposal of minerals.

(2) For the purposes of this section, where a trade consists partly of excepted operations and partly of other operations or activities, the part of the trade consisting of excepted operations and the part of the trade consisting of other operations or activities shall each be treated as a separate trade, and there shall be apportioned to each such part such proportion of the total amount receivable from sales made and services rendered in the course of the trade, and of expenses incurred in the course of the trade, as is just and reasonable.

(3) Notwithstanding section 21, but subject to subsection (4), corporation tax shall be charged on the profits of companies, in so far as those profits consist of income chargeable to corporation tax under Case III, IV or V of Schedule D or of income of an excepted trade, at the rate of 25 per cent for the financial year 2000 and subsequent financial years.

(4) This section shall not apply to the profits of a company for any accounting period to the extent that those profits consist of income from the sale of goods within the meaning of section 454.”.

Provisions relating to 10 per cent rate of corporation tax.

74. —Chapter 1 of Part 14 of the Principal Act is hereby amended—

(a) in section 442—

(i) in subsection (1)—

(I) by the insertion of the following before the definition of “merchandise”:

“‘expansion operations’, in relation to a company, includes—

(a) increases in production capacity for existing or directly related product lines of the company, and

(b) the addition of support functions directly related to the existing trading operations of the company;

‘industrial development agency’ means—

(a) the Industrial Development Authority in Ireland,

(b) the Shannon Free Airport Development Company,

(c) údarás na Gaeltachta,

(d) the Industrial Development Agency, Ireland,

(e) Forbairt,

(f) Forfás, or

(g) Enterprise Ireland;”,

(II) by the substitution of the following for the definitions of “relevant accounting period” and “relief under this Part”, respectively:

“‘relevant accounting period’, in relation to a trade carried on by a company which consists of or includes the manufacture of goods, means an accounting period or part of an accounting period of a company ending on or before—

(a) where subsection (11) or (12) of section 443 applies, the 31st day of December, 2000,

(b) in the case of a trade, other than a specified trade, which is set up and commenced on or after the 23rd day of July, 1998, the 31st day of December, 2002, and

(c) in any other case, the 31st day of December, 2010;

‘relief under this Part’ means the reduction of corporation tax provided for in section 448(2);”,

and

(III) by the addition of the following after the definition of “relief under this Part”:

“‘specified trade’, in relation to a company—

(a) means a trade which consists of or includes trading operations specified in a grant agreement (in this definition referred to as ‘the relevant grant agreement’) entered into between the company and an industrial development agency on foot of an approval of grant assistance for the company made by the industrial development agency on or before the 31st day of July, 1998, but

(b) does not include such part of the trade as consists of expansion operations which commenced to be carried on on or after the 23rd day of July, 1998, other than such of those operations as would fall within the terms of the relevant grant agreement;”,

and

(ii) by the addition of the following subsections after subsection (2):

“(3) Where, by virtue of the application of the definition of ‘specified trade’, an accounting period or part of an accounting period—

(a) would be a relevant accounting period in relation to a part (in this subsection referred to as ‘the first-mentioned part’) of a trade carried on by a company, and

(b) would not be a relevant accounting period in relation to another part (in this subsection referred to as ‘the second-mentioned part’) of that trade,

then, for the purposes of this Part—

(i) the first-mentioned part and the second-mentioned part shall each be treated as a separate trade, and

(ii) there shall be apportioned to the first-mentioned part and the second-mentioned part such proportion of the total amount receivable from sales made and services rendered in the course of the trade, and of expenses incurred in the course of the trade, in the accounting period or part of the accounting period, as the case may be, as is just and reasonable.

(4) Where—

(a) on or after the 23rd day of July, 1998, a company (in this subsection referred to as ‘the successor company’) succeeds to a trade or part of a trade which was carried on by another company (in this subsection referred to as ‘the original company’), and

(b) the original company has or could have made a claim to relief under this Part in relation to the trade or part of the trade,

then, subject to sections 445 and 446, relief, in so far as such relief relates to the trade or part of the trade in question, shall be granted to the successor company as respects the remaining relevant accounting periods for which such relief might have been claimed by the original company if it had continued to carry on the trade or part of the trade in question.”,

(b) in section 445(2), by the substitution of the following for “until the 31st day of December, 2005”:

“until—

(a) in the case of those operations which, on or before the 31st day of May, 1998, were approved by the Minister for carry on in the airport, the 31st day of December, 2005, and

(b) in the case of those operations which are so approved after the 31st day of May, 1998, the 31st day of December, 2002”,

(c) in section 446(2), by the substitution of the following for “until the 31st day of December, 2005”:

“until—

(a) in the case of those operations which, on or before the 31st day of July, 1998, were approved by the Minister for carry on in the Area, the 31st day of December, 2005, and

(b) in the case of those operations which are so approved after the 31st day of July, 1998, the 31st day of December, 2002”,

(d) in section 454—

(i) in subsection (1), by the substitution of the following paragraph for paragraph (b):

“(b) For the purposes of this section, where a part only of an accounting period of a company is a relevant accounting period, the accounting period shall be divided into 2 parts, one beginning on the day on which the accounting period begins and ending on the last day of the accounting period which is within the relevant accounting period, and the other beginning on the day after that last-mentioned day and ending on the day on which the accounting period ends, and both parts shall be treated as if they were separate accounting periods of the company.”,

and

(ii) in subsection (2), by the substitution of “a relevant accounting period” for “an accounting period ending on or before the 31st day of December, 2010,”,

(e) in section 455—

(i) in subsection (2), by the substitution of “a relevant accounting period” and “the relevant accounting period” for “an accounting period” and “the accounting period”, respectively, and

(ii) in subsection (3), by the substitution of “a relevant accounting period” and “that relevant accounting period” for “an accounting period” and “that accounting period”, respectively,

and

(f) in section 456(2)(a), by the substitution of “any relevant accounting period” for “any accounting period ending on or before the 31st day of December, 2010,”.

Amendment of section 88 (deduction for gifts to Enterprise Trust Ltd.) of Principal Act.

75. —Section 88 of the Principal Act is hereby amended—

(a) by the substitution for subsection (1) of the following subsection:

“(1) In this section,‘the company’ means the company incorporated on the 30th day of October, 1991, as The Enterprise Trust Limited or such successor body of The Enterprise Trust Limited as may be approved for the purposes of this section by the Minister for Finance.”,

(b) in subsection (2)(a), by the substitution for “31st day of December, 1999” of “31st day of December, 2002”,

(c) in subsection (3)(b), by the substitution for subparagraph (iii) of the following subparagraph:

“(ii) in respect of a gift made at any time in the year ending on the 31st day of December in the year 1999, 2000, 2001 or 2002, if at that time the aggregate of the net amounts of all gifts to which this section applies made to the company within that year exceeds £5,000,000.”,

and

(d) in subsection (6), by the substitution for “the amounts specified in subparagraphs (i) and (ii)” of “the amount specified in subparagraph (i)”.

Income of Investor Compensation Company Ltd.

76. —(1) The Principal Act is hereby amended—

(a) by the insertion after section 219A of the following section:

“Income of Investor Compensation Company Ltd.

219B.—(1) In this section, ‘the company’ means the company incorporated on the 10th day of September, 1998, as The Investor Compensation Company Limited.

(2) Notwithstanding any provision of the Corporation Tax Acts, profits arising in any accounting period ending on or after the 10th day of September, 1998, to the company shall be exempt from corporation tax.”,

and

(b) in section 256(1), in paragraph (a) of the definition of “relevant deposit”, by the substitution for subparagraphs (iv) and (v) of the following subparagraphs:

(iv) the Central Bank of Ireland,

(v) The Investor Compensation Company Limited, or

(vi) Icarom plc,”.

(2) Paragraph (b) of subsection (1) shall be deemed to have come into operation on the 10th day of September, 1998.

Withdrawal of exemption from corporation tax for Bord Gáis Éireann.

77. — Section 220 of the Principal Act is hereby amended as respects any accounting period beginning on or after the date of passing of this Act by the deletion of paragraph 1 of the Table to the section.

Amendment of Chapter 5 (group relief) of Part 12 of Principal Act.

78. — (1) Chapter 5 of Part 12 of the Principal Act is hereby amended—

(a) in section 410—

(i) in subsection (1)(a) by the insertion before the definition of “trading or holding company” of the following definition:

“‘tax’, in relation to a Member State of the European Communities other than the State, means any tax imposed in the Member State which corresponds to corporation tax in the State;”,

(ii) by the substitution for paragraph (b) of subsection (1) of the following paragraph:

“(b) For the purposes of this section—

(i) a company shall be owned by a consortium if 75 per cent or more of the ordinary share capital of the company is beneficially owned between them by 5 or fewer companies resident in one or more than one Member State of the European Communities of which none of these companies beneficially owns less than 5 per cent of that capital, and those companies shall be called the members of the consortium, and

(ii) references to a company resident in a Member State of the European Communities shall be construed as references to a company which, by virtue of the law of a Member State of the European Communities, is resident for the purposes of tax in such a Member State.”,

(iii) in paragraph (a) of subsection (3) by the substitution for “in the State” of “in a Member State of the European Communities”, and

(iv) in paragraph (a)(i) of subsection (4) by the substitution for “so resident” of “resident in a Member State of the European Communities”,

(b) in section 411(1)—

(i) in paragraph (a) by the insertion before the definition of “trading company” of the following definition:

“‘tax’, in relation to a Member State of the European Communities other than the State, means any tax imposed in the Member State which corresponds to corporation tax in the State;”,

(ii) in paragraph (c)—

(I) by the substitution for “companies resident in the State” of “a company which, by virtue of the law of a Member State of the European Communities, is resident for the purposes of tax in such a Member State”, and

(II) by the substitution for “company not resident in the State” of “company, not being a company which, by virtue of the law of a Member State of the European Communities, is resident for the purposes of tax in such a Member State”,

and

(c) in section 420 by the insertion in subsection (1) after “trade” of “in respect of which the company is within the charge to corporation tax”.

(2) This section shall apply as respects accounting periods ending on or after the 1st day of July, 1998.

Amendment of section 130 (matters to be treated as distributions) of Principal Act.

79. —(1) Section 130 of the Principal Act is hereby amended—

(a) in subsection (3)—

(i) in paragraph (b) by the substitution for “also so resident” of “,being a company which, by virtue of the law of a Member State of the European Communities, is resident for the purposes of tax in such a Member State”, and

(ii) by the addition, after paragraph (b) of the following paragraph:

“(c) For the purposes of this subsection and subsection (4), ‘tax’, in relation to a Member State of the European Communities other than the State, means any tax imposed in the Member State which corresponds to corporation tax in the State.”,

and

(b) in subsection (4)(c) by the substitution for “not resident in the State” of “, not being a company which, by virtue of the law of a Member State of the European Communities, is resident for the purposes of tax in such a Member State”.

(2) This section shall apply as respects accounting periods ending on or after the 1st day of July, 1998.

Amendment of section 486 corporation tax: relief for gifts to First Step) of Principal Act.

80. —Section 486 of the Principal Act is hereby amended—

(a) in subsection (2)(a), by the substitution for “before the 1st day of January, 2000” of “on or before the 31st day of December, 2002”, and

(b) in subsection (4)(b)—

(i) in subparagraph (iii), by the substitution for “1996, 1997, 1998 or 1999” of “1999, 2000, 2001 or 2002”, and

(ii) in subparagraph (iv), by the substitution for “commencing on the 1st day of June, 1999, and ending on the 31st day of December, 1999” of “commencing on the 1st day of June, 2002, and ending on the 31st day of December, 2002”.

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

81. —Schedule 24 to the Principal Act is hereby amended—

(a) in paragraph 4(4)(c) by the substitution for “10 per cent” of “20 per cent”,

(b) in paragraph 9A—

(i) in subparagraph (2) by the insertion after “shall be construed as” of “including”, and

(ii) in subparagraph (5) in clause (a) by the insertion after “government of the territory” of “except, in respect of taxes covered by those arrangements, to the extent that credit may not be given for that tax under those arrangements”,

and

(c) in subclauses (i) and (iii) of paragraph 9B(5) (b)—

(i) by the substitution of “controls” for “owns” in each place where it occurs, and

(ii) by the substitution of “voting power” for “ordinary share capital” in each place where it occurs.

Company residence.

82. —(1) Chapter 2 of Part 2 of the Principal Act is hereby amended by the insertion after section 23 of the following section:

“23A.—(1) (a) In this section—

‘arrangements’ means arrangements having the force of law by virtue of section 826;

‘relevant company’ means a company—

(i) which is under the control, whether directly or indirectly, of a person or persons who is or are—

(I) by virtue of the law of any relevant territory, resident for the purposes of tax in a relevant territory or relevant territories, and

(II) not under the control, whether directly or indirectly, of a person who is, or persons who are, not so resident,

or

(ii) which is, or is related to, a company the principal class of the shares of which is substantially and regularly traded on one or more than one recognised stock exchange in a relevant territory or territories;

‘relevant territory’ means—

(i) a Member State of the European Communities, or

(ii) not being such a Member State, a territory with the government of which arrangements have been made;

‘tax’, in relation to a relevant territory other than the State, means any tax imposed in that territory which corresponds to income tax or corporation tax.

(b) For the purposes of—

(i) this section—

(I) a company shall be treated as related to another company if one company is a 50 per cent subsidiary of the other company or both companies are 50 per cent subsidiaries of a third company,

(II) a company shall be a 50 per cent subsidiary of another company if and so long as not less than 50 per cent of its ordinary share capital is owned directly or indirectly by that other company, and

(III) sections 412 to 418 shall apply as those sections would apply for the purposes of Chapter 5 of Part 12 if—

(A) ‘50 per cent’ were substituted for ‘75 per cent’ in each place where it occurs in those sections, and

(B) subparagraph (iii) of section 411(1)(c) were deleted,

and

(ii) the definition of ‘relevant company’ control shall be construed in accordance with subsections (2) to (6) of section 432 as if in subsection (6) of that section for ‘5 or fewer participators’ there were substituted—

(I) in so far as paragraph (i)(I) of that definition is concerned, ‘persons who, by virtue of the law of any relevant territory (within the meaning of section 23A), are resident for the purposes of tax in a relevant territory or relevant territories’, and

(II) in so far as paragraph (i)(II) of that definition is concerned, ‘persons not resident for the purposes of tax in a relevant territory (within the meaning of section 23A)’.

(2) Subject to subsections (3) and (4), a company which is incorporated in the State shall be regarded for the purposes of the Tax Acts and the Capital Gains Tax Acts as resident in the State.

(3) Subsection (2) shall not apply to a company incorporated in the State if the company is a relevant company and—

(a) carries on a trade in the State, or

(b) is related to a company which carries on a trade in the State.

(4) Notwithstanding subsection (2), a company which is regarded for the purposes of any arrangements as resident in a territory other than the State and not resident in the State shall be treated for the purposes of the Tax Acts and the Capital Gains Tax Acts as not resident in the State.”.

(2) This section shall apply—

(a) in the case of companies which are incorporated on or after the 11th day of February, 1999, as on and from that day, and

(b) in the case of companies which were incorporated before the 11th day of February, 1999, as on and from the 1st day of October, 1999.

Amendment of section 882 (particulars to be supplied by new companies) of Principal Act.

83. —(1) The Principal Act is hereby amended in Chapter 2 of Part 38 by the substitution for section 882 of the following section:

“882.—(1) (a) In this section—

‘secretary’ includes persons mentioned in section 1044(2) and, in the case of a company not resident in the State, the agent, manager, factor or other representative of the company;

‘settlor’ and ‘settlement’ have the same meanings as in section 10;

‘tax’, in relation to a territory other than the State, means any tax imposed in that territory which corresponds to income tax or corporation tax;

‘ultimate beneficial owners’, in relation to a company, means—

(i) the individual or individuals who have control of the company, or

(ii) where a person, whether alone or together with other persons, who controls the company controls it in the capacity as the trustee of a settlement, any person who in relation to the settlement—

(I) is a settlor, or

(II) is, or can under any scheme or arrangement reasonably expect to become, a beneficiary under the settlement, or

(III) where such settlor or beneficiary, as the case may be, is a company, the ultimate beneficial owners of that company.

(b) For the purposes of this section, control shall be construed in accordance with section 432.

(2) Every company which is incorporated in the State or which commences to carry on a trade, profession or business in the State shall, in every case within 30 days of—

(a) the date on which it commences to carry on a trade, profession or business, wherever carried on,

(b) the date at which there is a material change in information previously delivered by the company under this section, and

(c) the giving of a notice to the company by an inspector requiring a statement under this section,

deliver to the Revenue Commissioners a statement in writing containing particulars of—

(i) in the case of every company—

(I) the name of the company,

(II) the address of the company's registered office,

(III) the address of its principal place of business,

(IV) the name and address of the secretary of the company,

(V) the date of commencement of the trade, profession or business,

(VI) the nature of the trade, profession or business,

(VII) the date up to which accounts relating to such trade, profession or business will be made up, and

(VIII) such other information as the Revenue Commissioners consider necessary for the purposes of the Tax Acts;

(ii) in the case of a company which is incorporated, but not resident, in the State—

(I) the name of the territory in which the company is, by virtue of the law of that territory, resident for tax purposes,

(II) where subsection (2) of section 23A does not apply by virtue of subsection (3) of that section the name and address of the company referred to in that latter subsection which carries on a trade in the State, and

(III) where the company is treated as not resident in the State by virtue only of subsection (4) of section 23A—

(A) if the company is controlled by another company the principal class of the shares of which is substantially and regularly trade on one or more than one recognised stock exchange in a relevant territory (within the meaning of section 23A) or territories, the name of the other company and the address of its registered office, and

(B) in any other case, the name and address of the individuals who are the ultimate beneficial owners of the company,

and

(iii) in the case of a company which is neither incorporated in the State nor resident in the State but which carries on a trade, profession or business in the State—

(I) the address of the company's principal place of business in the State,

(II) the name and address of the agent, manager, factor or other representative of the company, and

(III) the date of commencement of the company's trade, profession or business in the State.

(3) Where a company fails to deliver a statement which it is required to deliver under this section then, notwithstanding any obligations as to secrecy or other restriction upon disclosure of information imposed by or under any statute or otherwise, the Revenue Commissioners may give a notice in writing to the registrar of companies (within the meaning of the Companies Act, 1963 ) stating that the company has so failed to deliver a statement under this section.”.

(2) This section shall apply—

(a) in the case of companies which are incorporated on or after the 11th day of February, 1999, as on and from that day, and

(b) in the case of companies which were incorporated before the 11th day of February, 1999, as on and from the 1st day of October, 1999.

Amendment of Chapter 2 (other corporation tax penalties) of Part 47 of Principal Act.

84. —(1) The Principal Act is hereby amended in Chapter 2 of Part 47—

(a) in section 1071 by the insertion after subsection (2) of the following subsection:

“(2A) (a) Where at any time not earlier than 3 months after the time at which a return is required to be delivered by a company in accordance with section 884, the company has failed to pay any penalty to which it is liable under subsection (1)(a) or (2) for failing to deliver the return, the secretary of the company shall, in addition to any penalty to which the secretary is liable under this section, be liable to pay such amount of any penalty to which the company is so liable as is not paid by the company.

(b) Where in accordance with paragraph (a) the secretary of a company pays any amount of a penalty to which the company is liable, the secretary shall be entitled to recover a sum equal to that amount from the company.”,

(b) by the substitution for section 1073 of the following section:

“1073.—(1) Where a company fails to deliver a statement which it is required to deliver under section 882—

(a) the company shall be liable to a penalty of £500 and, if the failure continues after judgement has been given by the court before which proceedings for the penalty have been commenced, to a further penalty of £50 for each day on which the failure so continues, and

(b) the secretary of the company shall be liable to a separate penalty of £100.

(2) (a) Where at any time not earlier than 3 months after the time at which a statement is required to be delivered by a company in accordance with section 882, the company has failed to pay any penalty to which it is liable under subsection (1)(a) for failing to deliver the statement, the secretary of the company shall, in addition to any penalty to which the secretary is liable under subsection (1)(b), be liable to pay such amount of any penalty to which the company is so liable as is not paid by the company.

(b) Where in accordance with paragraph (a) the secretary of a company pays any amount of a penalty to which the company is liable, the secretary shall be entitled to recover a sum equal to that amount from the company.”,

and

(c) in section 1076 by the substitution for subsection (1) of the following subsection:

“(1) In this Chapter,‘secretary’ includes—

(a) persons mentioned in section 1044(2) and, in the case of a company which is not resident in the State, the agent, manager, factor or other representative of the company, and

(b) in the case of a company the secretary (within the meaning of section 175 of the Companies Act, 1963 ) of which is not an individual resident in the State, an individual resident in the State who is a director of the company.”.

(2) This section shall apply as on and from the 1st day of March, 1999.

Amendment of sections 198, 710 and 734 of Principal Act.

85. —The Principal Act is hereby amended—

(a) in section 198(2), by the substitution of the following paragraphs for paragraphs (a) and (b):

“(a) as if in section 445 the following subsection were substituted for subsection (2) of that section:

‘(2) Subject to subsections (7) and (8), the Minister may give a certificate certifying that such trading operations of a qualified company as are specified in the certificate are, with effect from a date specified in the certificate, relevant trading operations for the purpose of this section.’,

and

(b) as if in section 446 the following subsection were substituted for subsection (2) of that section:

‘(2) Subject to subsections (7) and (9), the Minister may give a certificate certifying that such trading operations of a company as are specified in the certificate are, with effect from a date specified in the certificate, relevant trading operations for the purpose of this section.’.”,

(b) in section 710(2), by the substitution of the following paragraph for paragraph (b):

“(b) In applying the definition of ‘foreign life assurance business’ in section 451(1) for the purposes of paragraph (a), section 446 shall apply as if the following subsection were substituted for subsection (2) of that section:

‘(2) Subject to subsections (7) and (9), the Minister may give a certificate certifying that such trading operations of a company as are specified in the certificate are, with effect from a date specified in the certificate, relevant trading operations for the purpose of this section.’.”,

and

(c) in section 734(1)(c), by the substitution of the following subparagraphs for subparagraphs (i) and (ii):

“(i) in section 445 the following subsection were substituted for subsection (2) of that section:

‘(2) Subject to subsections (7) and (8), the Minister may give a certificate certifying that such trading operations of a qualified company as are specified in the certificate are, with effect from a date specified in the certificate, relevant trading operations for the purpose of this section.’,

and

(ii) in section 446 the following subsection were substituted for subsection (2) of that section:

‘(2) Subject to subsections (7) and (9), the Minister may give a certificate certifying that such trading operations of a company as are specified in the certificate are, with effect from a date specified in the certificate, relevant trading operations for the purpose of this section.’.”.

Amendment of section 707 (management expenses) of Principal Act.

86. —(1) Section 707 of the Principal Act is hereby amended in subsection (1) by the substitution for paragraph (b) of the following:

“(b) no deduction shall be made under section 83(2)(b) other than in respect of the amount of any income (other than receipts from premiums) which, if the profits of the company were chargeable to corporation tax under Case I of Schedule D, would be taken into account in computing those profits and any such deduction from the amount treated as expenses of management under that section shall not be regarded as reducing acquisition expenses within the meaning of section 708.”.

(2) This section shall be deemed to have applied as respects income accruing for accounting periods commencing on or after the 1st day of January, 1999.