Chapter VI

Corporation Tax: Relief in Relation to Certain Income of Manufacturing Companies

38. —In this Chapter—

“merchandise” means goods other than goods within the meaning of section 39;

“relevant accounting period” means an accounting period or part of an accounting period of a company falling within the period from the 1st day of January, 1981, to the 31st day of December, 2000;

“relief under this Chapter” means the reduction of corporation tax provided for in section 41 (2).

39. —(1) In this Chapter “goods” means goods manufactured within the State in the course of a trade by the company which, in relation to the relevant accounting period, is the company claiming relief under this Chapter in relation to the trade:

Provided that where—

(a) there are two companies one of which manufactures goods and the other of which sells them in the course of its trade, and

(b) one of the companies is a 90 per cent. subsidiary of the other or both companies are 90 per cent. subsidiaries of a third company,

any goods manufactured within the State by one of the companies shall, when sold in the course of its trade by the other company, be deemed to have been manufactured within the State by that other company.

(2) Where a company carries on a trade which consists of or includes the rendering to another person of services by way of subjecting commodities or materials belonging to that person to any process of manufacturing, the following provisions shall apply for the purpose of relief under this Chapter—

(a) the rendering within the State of such services shall be regarded as the manufacture within the State of goods,

(b) any amount receivable in payment for services so rendered shall be regarded as an amount receivable from the sale of goods, and

(c) the inspector may by notice in writing require a company claiming relief from tax by virtue of this subsection to furnish him with such information or particulars as may be necessary for the purpose of giving effect to this subsection, and section 41 (2) shall have effect as if the matters of which proof is required thereby included the information or particulars specified in a notice under this subsection.

(3) (a) The definition of “goods” in subsection (1) shall not include goods sold to the intervention agency and, for the purposes of this exclusion, the sale of goods to a person other than the intervention agency shall be deemed to be a sale to the intervention agency if and to the extent that those goods are ultimately sold to the intervention agency.

(b) In paragraph (a) “the intervention agency” means the Minister for Agriculture when exercising or performing any power or function conferred on him by Regulation 3 of the European Communities (Common Agricultural Policy) (Market Intervention) Regulations, 1973 (S.I. No. 24 of 1973), and any other person when exercising or performing any corresponding power or function in any Member State of the European Economic Community.

(4) The definition of “goods” in subsection (1) shall not include goods sold by retail by the company claiming relief under this Chapter:

Provided that goods shall be deemed for the purposes of this exclusion not to be sold by retail if they are sold—

(a) to a person who carries on a trade of selling goods of the class to which the goods so sold to him belong, or

(b) to a person who uses goods of that class for the purposes of a trade carried on by him, or

(c) to a person, other than an individual, who uses goods of that class for the purposes of an undertaking carried on by him.

40. —For the purposes of this Chapter, where a part only of an accounting period of a company is a relevant accounting period, all amounts referable to the accounting period shall be apportioned, on the basis of the proportion which the length of the relevant accounting period bears to the length of the accounting period of the company, for the purpose of ascertaining any amount required to be taken into account in respect of the relevant accounting period.

41. —(1) For the purposes of this section “relevant corporation tax” means the corporation tax which, apart from this section and sections 58 , 182 and 184 of the Corporation Tax Act, 1976 , would be chargeable for the relevant accounting period exclusive of the corporation tax chargeable on the part of the company's profits attributable to chargeable gains for that period; and that part shall be taken to be the amount brought into the company's profits for that period for the purposes of corporation tax in respect of chargeable gains before any deduction for charges on income, expenses of management or other amounts which can be deducted from or set against or treated as reducing profits of more than one description.

(2) Where a company which carries on a trade which consists of or includes the manufacture of goods claims and proves as respects a relevant accounting period that, during that period, any amount was receivable in respect of the sale, in the course of the trade, of goods, corporation tax payable by the company for that period, so far as it is referable to the income from the sale of those goods, shall be reduced by seven-ninths; and the corporation tax referable to the income from the sale of those goods shall be such an amount as bears to the relevant corporation tax the same proportion as the income from the sale of those goods bears to the total income brought into charge to corporation tax for the relevant accounting period.

(3) For the purposes of subsection (2) “the income from the sale of those goods” shall be taken to be such sum as bears to the amount of the company's income for the relevant accounting period from the sale in the course of the trade mentioned in that subsection of goods and merchandise the same proportion as the amount receivable by the company in the relevant accounting period from the sale in the course of the trade of goods bears to the total amount receivable by the company in the relevant accounting period from the sale in the course of the trade of goods and merchandise.

(4) For the purposes of subsection (3) “the company's income for the relevant accounting period from the sale in the course of the trade mentioned in that subsection of goods and merchandise” shall, in case the income from the trade is derived solely from sales of goods and merchandise, be the amount of the company's income from the trade or, in any other case, be such amount of the income from the trade as appears to the inspector or, on appeal, to the Appeal Commissioners, to be just and reasonable.

(5) (a) For the purposes of this Chapter the amount receivable by a company in a relevant accounting period from the sale of goods or merchandise—

(i) shall be deemed to be reduced by the amount of any duty paid or payable by the company in respect of the goods or merchandise or in respect of the materials used in their manufacture, and

(ii) shall not include any amount in respect of value-added tax chargeable on the sale of the goods or merchandise.

(b) The inspector may, by notice in writing, require a company making a claim for relief under this Chapter to furnish him with such information or particulars as may be necessary for the purposes of giving effect to this subsection and subsection (2) shall have effect as if the matters of which proof is required thereby included the information or particulars specified in a notice under this subsection.

(6) In relation to a case where the trade mentioned in subsection (2) consists partly of exempted trading operations within the meaning of Part V of the Corporation Tax Act, 1976 —

(a) section 71 of that Act shall have effect as if the references therein to “this Act” included a reference to this Chapter, and

(b) all amounts receivable from the sale of goods or merchandise in the course of the said exempted trading operations shall be disregarded for the purposes of this Chapter.

(7) In relation to a case where the trade mentioned in subsection (2) is carried on by an agricultural society or a fishery society within the meaning of section 18 of the Finance Act, 1978 , all amounts receivable by the society from the sale of goods or merchandise, being amounts which are so receivable by virtue of exempted transactions within the meaning of that section, shall be disregarded for the purposes of this Chapter.

(8) A company shall not be entitled to relief under this Chapter in relation to a trade as respects a relevant accounting period unless it makes a claim for the relief under subsection (2) before the date on which the assessment for the accounting period which coincides with or includes that relevant accounting period becomes final and conclusive.

42. —(1) Save as is provided for in subsections (2) and (3), relief from corporation tax shall not be given under Part IV of the Corporation Tax Act, 1976 , in respect of any accounting period or part of an accounting period falling after the 31st day of December, 1980.

(2) (a) Subject to subsection (4), the provisions of subsection (1) shall not prevent relief being given under Part IV of the Corporation Tax Act, 1976 , to a company in relation to a trade carried on by it where the company, in the course of the trade, has at any time prior to the 1st day of January, 1981, exported out of the State any goods within the meaning of Part IV of the Corporation Tax Act, 1976 .

(b) Subject to subsection (4), where—

(i) a company (hereafter in this paragraph referred to as “the succeeding company”) succeeds to a trade or a part of a trade which, on or after the 1st day of January, 1981, was carried on by another company (hereafter in this paragraph referred to as “the original company”),

(ii) the original company has or could have made a claim to relief, by virtue of paragraph (a) or subsection (3), in relation to the trade or the part of the trade under Part IV of the Corporation Tax Act, 1976 , and

(iii) the original company had not ceased by virtue of subsection (4) to be entitled to claim relief under the said Part IV in relation to the trade or the part of the trade,

then the provisions of the said Part IV shall apply to the succeeding company as if the original company and the succeeding company were respectively the original company and the succeeding company within the meaning of section 62 (3) of the said Act.

(c) Where—

(i) subsequent to the succession described in paragraph (b) (1), another company (hereafter in this paragraph referred to as “the second succeeding company”) succeeds to a trade or a part of a trade of the company referred to in the said paragraph (b) as “the succeeding company” and which is hereafter in this paragraph referred to as “the first succeeding company”, and

(ii) that trade or that part of a trade is a trade or a part of a trade to which the said paragraph (b) applied,

then the said paragraph (b) shall apply with any necessary modifications as if the first succeeding company were the company referred to in the said paragraph (b) as “the original company” and as if the second succeeding company were the company referred to in the said paragraph (b) as “the succeeding company” and so on as regards any later such successions.

(3) Subject to subsection (4), the provisions of subsection (1) shall not apply to a company, in relation to a trade carried on by it to which subsection (2) does not apply, if, in respect of the trade, an assurance in writing has been given by a person duly authorised by the Minister for Finance to be his agent for that purpose that the provisions of the Tax Acts, including Part IV of the Corporation Tax Act, 1976 , would apply to the trade as if subsection (1) had not been enacted:

Provided that—

(a) no such assurance shall be given unless the Minister for Finance, or his agent duly authorised as aforesaid, is satisfied that the trade carried on or to be carried on by the company contributes, or would contribute, significantly to regional or national development,

(b) any such assurance shall be given in such form and manner and subject to such conditions as the Minister for Finance may direct,

(c) no such assurance shall be given on a date later than the 31st day of December, 1980, and

(d) where an assurance in writing has been given on a date not later than the 31st day of December, 1980, by a person duly authorised by the Government to be their agent for that purpose and that assurance is to the like effect as the assurance first mentioned in this subsection, this subsection shall have effect as if the assurance so given were the assurance so first mentioned and as if the provisions of this subsection relating to the giving of assurances were complied with in all respects.

(4) A company which claims relief under this Chapter in relation to a trade as respects a relevant accounting period shall not be entitled by virtue of subsection (2) or (3) to claim relief in relation to the trade under Part IV of the Corporation Tax Act, 1976 , as respects any accounting period or part of an accounting period falling after the day immediately prior to the date of the commencement of that relevant accounting period.

(5) (a) Section 58 of the Corporation Tax Act, 1976 , is hereby amended, as respects accounting periods which end on or after the 1st day of January, 1981, by the substitution for subsection (10) of the following subsection:

“(10) For the purposes of this section ‘relevant corporation tax’ means the corporation tax which, apart from this section, sections 182 (relief in respect of unrelieved losses and capital allowances carried forward from the year 1975-76) and 184 (relief in respect of corporation profits tax losses) and section 41 of the Finance Act, 1980, would be chargeable for the relevant accounting period exclusive of the corporation tax chargeable on the part of the company's profits attributable to chargeable gains for that period; and that part shall be taken to be the amount brought into the company's profits for that period for the purposes of corporation tax in respect of chargeable gains before any deduction for charges on income, expenses of management or other amounts which can be deducted from or set against or treated as reducing profits of more than one description.”.

(b) Paragraph (a) shall apply in relation to any claim made on or after the 6th day of May, 1980, for relief from corporation tax under Part IV of the Corporation Tax Act, 1976 , as respects any relevant accounting period within the meaning of that Part which ends before the 1st day of January, 1981, as it applies as respects accounting periods ending on or after that date, with the modification that, in relation to cases where section 186 of that Act has effect for the relevant accounting period in respect of which the claim is made, subsection (10) (inserted by paragraph (a)) of section 58 of that Act shall have effect as if the references therein to sections 182 and 184 of that Act included a reference to the said section 186.

(6) Section 64 of the Corporation Tax Act, 1976 , is hereby amended, as respects accounting periods which end on or after the 1st day of January, 1981—

(a) in subsection (2), in the definition of A, after “liability to corporation tax on its income”, by inserting “(other than its income from the sale of goods within the meaning of section 41 of the Finance Act, 1980)”, and the said definition, as so amended, is set out in the Table to this paragraph.

TABLE

A is an amount arrived at by applying to the amount of the company's distributable income for the accounting period, excluding distributions received by the company in that period, the fraction where D is the standard rate per cent. for the year of assessment in which the relevant distribution is made reduced in the same proportion as the company's liability to corporation tax on its income (other than its income from the sale of goods within the meaning of section 41 of the Finance Act, 1980) for the accounting period is reduced under section 58, subject to paragraph (c) of the proviso to section 182 (3) (transitional relief for income tax losses, etc.) and paragraph (iii) of the proviso to section 184 (3) (relief in respect of corporation profits tax losses),

and

(b) by the insertion after subsection (4) of the following subsection:

“(4A) Where the distributable income of a company for an accounting period falls to be determined for the purposes of this section in relation to a distribution made by the company for that accounting period (hereafter in this subsection referred to as ‘the first-mentioned distribution’), there shall be deducted from the aggregate mentioned in subsection (4) the aggregate of the following amounts—

(a) the amount of the company's income which, in relation to the first-mentioned distribution, falls to be taken into account in the definition of A in section 45 (1) of the Finance Act, 1980 (before any reduction under section 47 (2) (i) or 48 (2) (i) of that Act), as income of the company for the relevant accounting period (within the meaning of Chapter VI of Part I of that Act) which coincides with or is included in the said accounting period less the amount of corporation tax which falls to be taken into account in the definition of B in the said section 45 (1) in respect of that amount of the company's income, and

(b) an amount equal to the distributions received by the company in the accounting period which are relevant distributions within the meaning of section 45 of the Finance Act, 1980, and which fall to be included within the definition of E in subsection (1) of that section in relation to the first-mentioned distribution.”.

43. —(1) Save as is provided for in subsections (2) and (3), no trading operation of any company carried on on or after the 1st day of January, 1981, shall be an exempted trading operation for the purposes of Part V of the Corporation Tax Act, 1976 .

(2) Subject to subsection (4), where, by virtue of a certificate given under section 70 (2) of the Corporation Tax Act, 1976 , or of a certificate having effect as if it were so given, any trading operations of a company are, on the 31st day of December, 1980, exempted trading operations within the meaning of that section, then the provisions of subsection (1) shall not prevent the application of Part V of that Act to those trading operations.

(3) Where any trading operations of a company commence on or after the 1st day of January, 1981, and, but for the provisions of subsection (1), a certificate would be given under section 70 (2) of the Corporation Tax Act, 1976 , certifying that those trading operations were exempted trading operations for the purposes of Part V of that Act, then the Minister for Finance may give such a certificate as is provided for in that section in relation to those trading operations if, in respect of those trading operations, an assurance in writing has been given by a person duly authorised by the Minister for Finance to be his agent for that purpose that the provisions of the Tax Acts, including Part V of the Corporation Tax Act, 1976 , would apply to those trading operations as if subsection (1) had not been enacted; and, subject to subsection (4), where such a certificate is given the provisions of subsection (1) shall not prevent the application of the said Part V to those trading operations:

Provided that—

(a) no such assurance shall be given unless the Minister for Finance, or his agent duly authorised as aforesaid, is satisfied that the trading operations contribute, or would contribute, significantly to regional or national development,

(b) any such assurance shall be given in such form and manner and subject to such conditions as the Minister for Finance may direct, and

(c) no such assurance shall be given on a date later than the 31st day of December, 1980.

(4) Where a company claims relief under this Chapter in relation to a trade as respects a relevant accounting period during which the trade consisted of exempted trading operations specified in a certificate mentioned in subsection (2) or (3), then those trading operations shall cease to be exempted trading operations for the purposes of Part V of the Corporation Tax Act, 1976 , to the extent that they are carried on on or after the first day of that relevant accounting period.

44. —(1) Where a company making a claim for relief under this Chapter (hereafter in this subsection referred to as “the buyer”) buys from another person (hereafter in this subsection referred to as “the seller”), and

(a) the seller has control over the buyer or, the seller being a body corporate or partnership, the buyer has control over the seller or some other person has control over both the seller and the buyer, and

(b) the price in the transaction is less than that which might have been expected to obtain if the parties to the transaction had been independent parties dealing at arm's length,

then the income or losses of the buyer and the seller shall be computed, for any purpose of the Tax Acts, as if the price in the transaction had been that which would have obtained if the transaction had been a transaction between independent persons dealing as aforesaid.

(2) Where a company making a claim for relief under this Chapter (hereafter in this subsection referred to as “the seller”) sells goods to another person (hereafter in this subsection referred to as “the buyer”) and

(a) the buyer has control over the seller or, the buyer being a body corporate or partnership, the seller has control over the buyer or some other person has control over both the seller and the buyer, and

(b) the goods are sold at a price greater than the price which they might have been expected to fetch if the parties to the transaction had been independent parties dealing at arm's length,

then the income or losses of the buyer and the seller shall be computed, for any purpose of the Tax Acts, as if the goods had been sold by the seller to the buyer for the price which they would have fetched if the transaction had been a transaction between independent persons dealing as aforesaid.

(3) For the purposes of subsection (2) a company shall be deemed to sell goods where and to the extent that, for the purposes of this Chapter, any amount receivable by it in payment for any trading activity is regarded as an amount receivable from the sale of goods and “seller” and “buyer” shall be construed accordingly.

(4) In this section “control” has the meaning assigned to it by section 158 of the Corporation Tax Act, 1976 .

(5) The inspector may by notice in writing require a company making a claim for relief under this Chapter to furnish him with such information or particulars as may be necessary for the purposes of this section, and section 41 (2) shall have effect as if the matters of which proof is required thereby included the information or particulars specified in a notice under this section.

45. —(1) For the purposes of this section a distribution made by a company shall be a relevant distribution if it is made on a day (hereafter in this section referred to as “the relevant day”) falling on or after the 1st day of January, 1981, and if the total amount of the distributions made by the company on that day does not exceed an amount (hereafter in this section referred to as “the amount of the primary fund”) determined by the formula

(A−B) + (C−D) + E−F

where, subject to sections 46 to 49—

A is the amount of the company's income the corporation tax in respect of which is reduced under section 41 for the last relevant accounting period of the company which ended before the relevant day:

Provided that where the distribution is not a distribution declared by the company in a general meeting held as an annual general meeting this definition shall have effect as if the reference therein to the last relevant accounting period which ended before the relevant day were a reference to the relevant accounting period of the company in which the distribution is made,

B is the amount of the corporation tax, as reduced under section 41, in respect of the amount of income mentioned in the definition of A,

C is the aggregate of the amounts of the company's income the corporation tax in respect of which is reduced under section 41 for all relevant accounting periods of the company preceding the relevant accounting period which falls to be taken into account in the definition of A,

D is the aggregate of the amounts of the corporation tax, as reduced under section 41, in respect of the amounts of income comprised in the aggregate amount calculated in accordance with the definition of C,

E is the aggregate amount of the relevant distributions received by the company at any time prior to the relevant day:

Provided that a relevant distribution shall not be included within this definition if the distribution, together with the tax credit to which the company is entitled in respect of it, is franked investment income against which relief is given under section 15 (4), 25 or 26 of the Corporation Tax Act, 1976 , and which relief was not subsequently withdrawn under the provisions of those sections, and

F is the aggregate amount of the relevant distributions made by the company on any day earlier than the relevant day.

(2) Where in relation to a company the amount of the primary fund is greater than zero but is less than the total amount of the distributions made by the company on the relevant day, a distribution made by the company on that day shall be treated as if it consisted of two distributions being, respectively—

(a) a relevant distribution equal to such an amount as bears to the whole of the distribution the same proportion as the amount of the primary fund bears to the total amount of the distributions so made on that day, and

(b) a separate distribution which is not a relevant distribution and which consists of the balance of the distribution.

(3) The tax credit to which a recipient of a relevant distribution is entitled in respect of it shall, notwithstanding section 88 (2) of the Corporation Tax Act, 1976 , be an amount equal to one-eighteenth of the amount of the relevant distribution.

(4) In relation to a relevant distribution, section 83 (4) (a) of the Corporation Tax, Act, 1976, shall have effect as if for “income tax at the standard rate for that year on” there were substituted “one-nineteenth of”.

(5) The tax credit (if any) to which the recipient of a distribution to which subsection (2) (b) applies is entitled in respect of the distribution shall be calculated in accordance with the provisions of the Corporation Tax Acts other than subsection (3).

(6) In relation to a relevant distribution (including part of a distribution which is treated under subsection (2) as a relevant distribution) made by a company, sections 5 and 83 (5) of the Corporation Tax Act, 1976 , shall apply to the company so that the statements provided for by those sections shall show, as respects each such distribution, in addition to the particulars required to be given apart from this subsection, that the distribution is a relevant distribution within the meaning of this section.

(7) Where, on a claim being made by a company for relief under this Chapter in relation to a trade for any relevant accounting period, it appears to the inspector, or, on appeal, to the Appeal Commissioners, that, when account is taken of that relief, the amount of the primary fund in relation to any distribution (including part of a distribution to which subsection (2) (b) applies) made by the company on a relevant day is such that the amount of the tax credit to which the recipient of the distribution was shown to be entitled on the statement annexed to or accompanying any warrant or cheque or other order mentioned in section 5 of the Corporation Tax Act, 1976 , or in any statement mentioned in section 83 (5) of that Act, is greater than the amount of the tax credit to which the said recipient is entitled under the provisions of this section, then any relief under this Chapter to which the company would otherwise be entitled in respect of the trade for the relevant accounting period shall be reduced by the excess of the amount of the tax credit to which the recipient was so shown to be entitled over the amount to which he is entitled under the provisions of this section, and there shall be made such additional assessments or adjustments of assessments as may in any case be required in order to give effect to this subsection:

Provided that—

(a) no account shall be taken of the reduction of relief under this Chapter by virtue of this subsection in determining any amount which falls to be taken into account—

(i) in the definition of B or D in subsection (1),

(ii) in paragraph (bb) of the proviso to subsection (3) of section 182 of the Corporation Tax Act, 1976 , or

(iii) in paragraph (iiA) of the proviso to subsection (3) (b) of section 184 of that Act, and

(b) the provisions of this subsection shall not apply if the inspector, or, on appeal, the Appeal Commissioners, is or are satisfied that, either by reason of a correction by the company of the statement annexed to or accompanying the relevant warrant or cheque or other order mentioned in section 5 of the Corporation Tax Act, 1976 , or of the statement mentioned in section 83 (5) of that Act, or for any other good and sufficient reason, it would be just and reasonable that they should not apply.

(8) The inspector may by notice in writing require a company to furnish him with such information or particulars as may be necessary for the purposes of this section and if the company does not comply with the requirements of the notice it shall be liable to a penalty of £100.

46. —(1) In this section “relevant deduction”, in relation to a relevant accounting period of a company, means any amount allowed as a deduction against the total profits of the company in that period in respect of—

(a) charges on income,

(b) group relief,

(c) any allowance in respect of capital expenditure to which effect is given for that period under section 14 (6) of the Corporation Tax Act, 1976 ,

(d) any loss in respect of which the profits of that period are treated as reduced under section 16 (2) of that Act, or

(e) other amounts which, under the Corporation Tax Acts, can be deducted from or set against or treated as reducing profits of more than one description.

(2) Where, for any relevant accounting period of a company—

(a) the corporation tax referable to the income of the company from the sale of goods falls to be reduced under section 41, and

(b) a relevant deduction has been allowed against the total profits in computing the corporation tax chargeable,

then, the amount of the company's income which falls to be taken into account in the definition of A or C in section 45 (1) in respect of that relevant accounting period shall be reduced by an amount equal to such part of the relevant deduction as bears to the whole the same proportion as the amount of the income of the company from the sale of goods bears to the total income brought into charge to corporation tax for the relevant accounting period.

47. —(1) Section 182 of the Corporation Tax Act, 1976 , is hereby amended—

(a) in subsection (1), by the substitution for the definition of “relevant corporation tax” of the following definition:

“‘relevant corporation tax’ has, in relation to an accounting period, the meaning assigned to it in subsection (10) (inserted by the Finance Act, 1980) of section 58 with the substitution of ‘the accounting period’ for ‘the relevant accounting period’.”,

and

(b) in the proviso to subsection (3), by the insertion after paragraph (b) of the following paragraph:

“(bb) where the corporation tax payable by the company for an accounting period is reduced by virtue of a claim under section 41 (2) (basis of relief from corporation tax: manufacturing companies) of the Finance Act, 1980, the relief to be given under this section for the accounting period shall be reduced in the same proportion as the corporation tax payable by the company for the accounting period so far as it is attributable to the income from the trade is so reduced; and the corporation tax attributable to the income from the trade shall be the amount mentioned in paragraph (b);”.

(2) Where, for any accounting period of a company which coincides with or includes a relevant accounting period—

(a) the corporation tax which is referable to the income of the company from the sale in the course of a trade of goods for the relevant accounting period falls to be reduced under section 41, and

(b) a reduced relief under section 182 of the Corporation Tax Act, 1976 , is allowed as respects the accounting period in accordance with the provisions of paragraph (bb) of the proviso to subsection (3) of the said section 182,

then—

(i) the amount of the company's income which, apart from this paragraph, falls to be taken into account in the definition of A or C in section 45 (1) in respect of the relevant accounting period shall be reduced by an amount determined by the formula

where—

G is the amount of the reduction in the relief in respect of the trade for the accounting period under the provisions of the said paragraph (bb) of the said proviso,

H is the income of the accounting period within the meaning of section 28 (8) of the Corporation Tax Act, 1976 , and

J is the relevant corporation tax for the accounting period within the meaning of the said section 182,

and

(ii) the amount of the corporation tax (as reduced under section 41) which, apart from this paragraph, falls to be taken into account in the definition of B or D in section 45 (1) in respect of the relevant accounting period shall be reduced by an amount determined by the formula

where G has the same meaning as in paragraph (i).

48. —(1) Subsection (3) of section 184 of the Corporation Tax Act, 1976 , is hereby amended—

(a) in paragraph (b), by the substitution for the definitions of A and B of the following definitions:

“A is the excess of the amount of corporation tax which, apart from sections 58 (basis of relief from corporation tax for export profits), 182, this section and section 41 of the Finance Act, 1980, is chargeable for the accounting period over an amount calculated by applying a rate equal to the standard rate for the year of assessment in which the accounting period ends to the amount of the company's income for the accounting period, and

B is the excess of the amount of corporation tax which, apart from sections 58, 182, this section and section 41 of the Finance Act, 1980, would be chargeable for the accounting period if the amount of the company's income for the accounting period were reduced by the appropriate amount over an amount calculated by applying a rate equal to the standard rate for the year of assessment in which the accounting period ends to the amount of the company's income for the accounting period as reduced by the appropriate amount:”,

and

(b) in the proviso to paragraph (b), by the deletion of “and” in paragraph (ii) and by the substitution for paragraph (iii) and the paragraph immediately following it of the following:

“(iiA) where the corporation tax payable by a company for an accounting period is reduced by virtue of a claim under section 41 (2) of the Finance Act, 1980, the amount of relief to be allowed under the foregoing provisions of this section shall be reduced in the same proportion which the amount by which the corporation tax referable to the income from the sale of goods (within the meaning of the said section 41) for that accounting period is so reduced bears to the relevant corporation tax; and

(iii) the amount of a reduction made for an accounting period under paragraph (i) or (ii) of this proviso shall, for the purposes of section 64, be deemed to be a reduction of the amount of relief allowed under section 58, and for the purposes of this proviso—

(I) ‘corporation tax referable to the income attributable to the excess’ and ‘corporation tax referable to the income from the sale of goods exported’ have the meanings assigned to them in section 58, and

(II) ‘relevant corporation tax’ has the meaning assigned to it in section 182.”.

(2) Where, for any accounting period of a company which coincides with or includes a relevant accounting period—

(a) the corporation tax which is referable to the income of the company from the sale in the course of the trade of goods for the relevant accounting period falls to be reduced under section 41, and

(b) a reduced relief under section 184 of the Corporation Tax Act, 1976 , is allowed as respects the accounting period in accordance with the provisions of paragraph (iiA) of the proviso to subsection (3) (b) of the said section 184,

then—

(i) the amount of the company's income which, apart from this paragraph, falls to be taken into account in the definition of A or C in section 45 (1) in respect of the relevant accounting period shall be reduced by an amount determined by the formula

where—

K is the amount of the relief for the accounting period under the said section 184 before any reduction in that relief under the provisions of the proviso to subsection (3) (b) of that section,

L is the income of the accounting period within the meaning of section 28 (8) of the Corporation Tax Act, 1976 ,

M is the relevant corporation tax within the meaning of section 182 of the Corporation Tax Act, 1976 , in relation to the accounting period,

N is the income from the sale of goods, within the meaning of section 41, for the relevant accounting period, and

P is the total income brought into charge to corporation tax for the accounting period,

and

(ii) the amount of the corporation tax (as reduced under section 41) which, apart from this paragraph, falls to be taken into account in the definition of B or D in section 45 (1) in respect of the relevant accounting period shall be reduced by an amount determined by the formula

where Q is the amount of the reduction in the relief for the accounting period under the provisions of the said paragraph (iiA) of the said proviso.

49. —(1) Where a company makes a relevant distribution within the meaning of section 45, including part of a distribution treated under section 45 (2) as a relevant distribution, in respect of any right or obligation to which section 178 of the Corporation Tax Act, 1976 , applies, the company shall make a supplementary distribution of an amount equal to the excess of the amount of the tax credit which would have applied in respect of the relevant distribution if section 45 (3) had not been enacted over the amount of the tax credit which in accordance with the said section 45 (3) applies to the relevant distribution.

(2) Where the whole or part of a supplementary distribution under subsection (1) is a relevant distribution within the meaning of subsection (1) or (2) (a) of section 45 and the recipient of that relevant distribution is a company, then, for the purposes of determining whether and to what extent a distribution made by that company is a relevant distribution, the whole or part (as the case may be) of the supplementary distribution shall be an amount to be taken into account under the definition of E in the formula in the said section in relation to that distribution made by that company.

(3) Notwithstanding the provisions of section 88 of the Corporation Tax Act, 1976 , the recipient of a supplementary distribution under subsection (1) shall not be entitled to a tax credit in respect of it.

(4) In relation to any supplementary distribution within the meaning of subsection (1), section 5 of the Corporation Tax Act, 1976 , shall apply to the company so that the statement required by that section shall show, in addition to the particulars required to be given apart from this section, the separate amount of such supplementary distribution.

50. —(1) For the purposes of relief under this Chapter income from the sale of goods shall not include income from—

(a) any mining operations for the purpose of obtaining, whether by underground or surface working, any scheduled mineral, mineral compound or mineral substance, within the meaning of section 2 of the Minerals Development Act, 1940 , or

(b) any construction operations within the meaning of section 17 of the Finance Act, 1970 (inserted by the Finance Act, 1976 ).

(2) Where a company carries on a trade which consists of or includes the manufacture of goods and, in the course of the trade, carries on any mining operations within the meaning of subsection (1) (a) from which it obtains any scheduled mineral, mineral compound or mineral substance of the kind referred to in that subsection and any such mineral, compound or substance is not sold by the company in the course of the trade but forms the whole or part of the materials used in the manufacture of such goods or is to any extent incorporated in the goods in the course of their manufacture, then, part of the income which, apart from this subsection, would be income from the sale of goods for the purposes of section 41 shall be deemed, for the purposes of subsection (1), to be income from such mining operations and that part shall, for the purposes of that subsection, be such amount as appears to the inspector or, on appeal, to the Appeal Commissioners, to be just and reasonable.

(3) Where the amount receivable from a sale of goods includes consideration for the carrying out, in relation to those goods, of any construction operations as defined in subsection (1) (b), then, part of the income which, apart from this subsection, would be income from the sale of goods for the purposes of section 41, shall be deemed, for the purposes of subsection (1), to be income from such construction operations and that part shall, for the purposes of that subsection, be such amount as appears to the inspector or, on appeal, to the Appeal Commissioners, to be just and reasonable.

51. —An appeal to the Appeal Commissioners shall lie on any question arising under this Chapter in like manner as an appeal would lie against an assessment to corporation tax and the provisions of the Tax Acts relating to appeals shall apply and have effect accordingly.