Agriculture (An Chomhairle Oiliúna TaIrnhaíochta) Act, 1979	1979, No. 9
Agriculture (An Foras Talúntais) Act, 1958	1958, No. 1
Capital Acquisitions Tax Act, 1976	1976, No. 8
Central Bank Act, 1971	1971, No. 24
Corporation Tax Act, 1976	1976, No. 7
Export Promotion Act, 1959	1959, No. 20
Finance Act, 1950	1950, No. 18
Finance Act, 1970	1970, No. 14
Finance Act, 1975	1975, No. 6
Finance Act, 1976	1976, No. 16
Finance Act, 1979	1979, No. 11
Finance Act, 1980	1980, No. 14
Finance Act, 1981	1981, No. 16
Finance Act, 1982	1982, No. 14
Finance Act, 1984	1984, No. 9
Finance Act, 1985	1985, No. 10
Finance Act, 1986	1986, No. 13
Finance (Miscellaneous Provisions) Act, 1968	1968, No. 7
Harbours Act, 1946	1946, No. 9
Higher Education Authority Act, 1971	1971, No. 22
Income Tax Act, 1967	1967, No. 6
Industrial Development Act, 1950	1950, No. 29
Industrial Development (No. 2) Act, 1981	1981, No. 14
Industrial Development Act, 1986	1986, No. 9
Industrial Training Act, 1967	1967, No. 5
Inland Revenue Regulation Act, 1890	1890, c. 21
Insurance Act, 1936	1936, No. 45
Local Government Act, 1941	1941, No. 23
Local Government Services (Corporate Bodies) Act, 1971	1971, No. 6
Mercantile Marine Act, 1955	1955, No. 29
National Lottery Act, 1986	1986, No. 28
Road Traffic Act, 1961	1961, No. 24
Shannon Free Airport Development Company Limited Acts, 1959 to 1986
Social Welfare (Consolidation) Act, 1981	1981, No. 1
Stamp Act, 1891	1891, c. 39
Succession Duty Act, 1853	1853, c. 51
Tourist Traffic Act, 1939	1939, No. 24
Tourist Traffic Acts, 1939 to 1983
Údarás na Gaeltachta Act, 1979	1979, No. 5
Unit Trusts Act, 1972	1972, No. 17
Value- Added Tax Act, 1972	1972, No. 22
Value- Added Tax (Amendment) Act, 1978	1978, No. 34
Vocational Education Act, 1930	1930, No. 29

Number 10 of 1987

No. 10/1987: FINANCE ACT, 1987

AN ACT TO CHARGE AND IMPOSE CERTAIN DUTIES OF CUSTOMS AND INLAND REVENUE (INCLUDING EXCISE), TO AMEND THE LAW RELATING TO CUSTOMS AND INLAND REVENUE (INCLUDING EXCISE) AND TO MAKE FURTHER PROVISIONS IN CONNECTION WITH FINANCE.

[9th July, 1987]

BE IT ENACTED BY THE OIREACHTAS AS FOLLOWS:

PART I INCOME TAX AND CORPORATION TAX

CHAPTER I Tax

Amendment of section 6 (special allowance in respect of P.R.S.I. for 1982-83)of Finance Act, 1982 .

1.— Section 6 of the Finance Act, 1982 , shall have effect for the purpose of ascertaining the amount of income on which an individual referred to therein is to be charged to income tax for the year 1987-88, as if in subsection 2—

( a ) "1987-88" were substituted for "1982-83", and

( b ) "£286" were substituted for "£312", in each place where it occurs.

Application of section 10 (exemption of certain income from leasing of farm land) of Finance Act, 1985 .

2.— (1) In this section, "qualifying lease", "qualifying lessor" and "the specified amount" have the meanings respectively assigned to them by section 10 (1) of the Finance Act, 1985 .

(2) As respects a qualifying lease or qualifying leases made in the period beginning on the 20th day of January, 1987, and ending on the 31st day of December, 1987, the said section 10 (1) shall have effect as if references therein to £2,000 were references to £2,800:

Provided that, where the income of a qualifying lessor consists of, or includes, rent or rents from a qualifying lease or qualifying leases made within the said period and from a qualifying lease or qualifying 30 leases made at any other time, the specified amount shall not exceed £2,800.

Application of section 16 (credit for farm tax) of Finance Act, 1986 .

3.— Section 16 of the Finance Act, 1986 , shall apply and have effect for the year of assessment 1986-87 as if references therein to farm tax paid or borne in that year of assessment were references to such tax paid or borne on or before the 30th day of June, 1987.

Residence of persons working abroad.

4.— (1) Where an individual, who is domiciled in the State, is engaged full-time in one or more of the following, that is to say, a trade, profession, office or employment, and the condition mentioned in subsection (2) is satisfied, the question whether he is resident in the State for tax purposes shall be decided without regard to any place of abode maintained in the State for his use.

(2) The said condition is that no part of the trade or profession is carried on in the State and all the duties of the office or employment are performed outside the State.

(3) In determining whether the duties of an office or employment are performed outside the State, any duties performed in the State, the performance of which is merely incidental to the performance of the duties of the office or employment outside the State, shall be treated for the purposes of this section as having been performed outside the State.

Amendment of section 14 (taxation treatment of certain dividends) of Finance Act, 1986 .

5.— Section 14 of the Finance Act, 1986 , is hereby amended, as respects the year 1987-88 and any subsequent year of assessment—

( a ) by the insertion in subsection (1) after "A dividend" of "in respect of eligible shares",

( b ) by the insertion after subsection (1) of the following subsection:

"(1A)( a ) In this section 'eligible shares', in relation to a company, means shares forming part of the ordinary share capital of the company which—

(i) are fully paid up,

(ii) carry no present or future preferential right to dividends or to the company's assets on its winding up and no present or future preferential right to be redeemed, and

(iii) are not subject to any different treatment from the treatment which applies to all shares of the same class, in particular, different treatment in respect of—

(I) the dividend payable,

(II) repayment,

(III) restrictions attaching to the shares,

(IV) any offer of substituted or additional shares, securities or rights of any description in respect of the shares.

( b ) Except where the shares are in a company whose ordinary share capital consists of shares of one class only, shares shall not be eligible shares for the purposes of this section unless, at the time of payment of the dividend in respect of the shares to which the claim under this section relates, the majority of the issued shares of the same class as those shares are held by persons other than—

(i) persons who acquired their shares in pursuance of any benefit or right conferred on them or an opportunity afforded to them as a director or employee of the company concerned or any other company and not in pursuance of an offer to the public, and

(ii) trustees holding shares on behalf of persons who acquired their beneficial interest in the shares in pursuance of such a benefit, right or opportunity as is mentioned in subparagraph (i).

( c ) In this subsection, 'ordinary share capital' has the meaning assigned to it by section 155 (5) of the Corporation Tax Act, 1976 .

( d ) Shares in a company shall not be treated for the purposes of this section as being of one class only or of the same class unless they would be so treated if dealt in on a stock exchange in the State.",

( c ) by the substitution of the following proviso for the proviso to subsection (2):

"Provided that the amount by which the income of an individual which is represented by qualifying dividends is reduced in accordance with this section for any year of assessment shall not exceed—

(i) in the case of qualifying dividends paid by a company—

(I) which exists wholly for the purpose of carrying on wholly or mainly in the State a trade which consists wholly or mainly of the manufacture of goods within the meaning of Chapter VI of Part 1 of the Finance Act, 1980 , and

(II) which has established a profit sharing scheme which has been approved of, and continues to be so approved of, by the Revenue Commissioners in accordance with Part I of the Third Schedule to the Finance Act, 1982 ,

£9,000, and

(ii) in the case of qualifying dividends paid by any other company, £7,000:

Provided further that the total amount by which the income of an individual which is represented by qualifying dividends is to be reduced under this section for any year of assessment shall not exceed £9,000.",

and

( d ) by the insertion after subsection (2) of the following subsection:

"(2A) For the purposes of subsection (2), a trade, which consists partly of the manufacture of goods within the meaning of Chapter VI of Part I of the Finance Act, 1980 , and partly of other trading operations, shall be regarded as consisting wholly or mainly of the manufacture of goods within the said meaning if, but only if, the total amount receivable by the company carrying on the trade from the sale of such goods is not less than 75 per cent. of the total amount receivable by the company from all sales made in the course of the trade.",

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

TABLE

(1) A dividend in respect of eligible shares which is paid on or after the 6th day of April, 1986, by a company resident in the State and which is a relevant distribution for the purposes of section 45 of the Finance Act, 1980 , shall be a qualifying dividend for the purposes of this section.

Amendment of provisions relating to relief in respect of interest.

6.— (1) In relation to any interest paid in respect of any period beginning on or after the 6th day of April, 1987, relief shall not be given under sections 76 (1) (c) and 496 of, and paragraph 1 (2) of Part III of Schedule 6 to, the Income Tax Act, 1967 , in respect of the excess of the amount, or of the aggregate amount, of the interest over 90 per cent. of the amount, or of the aggregate amount, of the interest in respect of which, apart from this section, relief would otherwise have been given under those provisions.

(2) The provisions of this section shall not apply to interest on money borrowed to pay death duties.

Alternative amount on account of appropriate tax.

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

( a ) interest shall be treated, if not otherwise so treated, as accruing from day to day,

( b ) references to "general crediting date", as respects a relevant deposit taker, shall be construed as references to a date on which the relevant deposit taker credits to all, or to the majority, of relevant deposits held by it on that date interest accrued due on those deposits (whether or not the interest is added to the balances on the relevant deposits on that date for the purpose of calculating interest due at some future date), and

( c ) references to the "principal section" shall be construed as references to section 33 of the Finance Act, 1986 .

(2) Where, for any year of assessment (being the year 1986-87 or any subsequent year of assessment), the amount of appropriate tax which is due and payable by a relevant deposit taker for that year under the principal section is less than the amount of appropriate tax which would have been so due and payable by the relevant deposit taker for the year if the total amount of the interest which had accrued, in the period of twelve months ending on—

( a ) the general crediting date as respects that relevant deposit taker failing in that year of assessment, or

( b ) if there is more than one general crediting date as respects that relevant deposit taker falling in that year of assessment, the last such date, or

( c ) if there is no general crediting date as respects that relevant deposit taker falling in that year of assessment, the 5th day of April in that year,

on all relevant deposits held by the relevant deposit taker in that period (and no more) had been paid by it in that period, the provisions of this section shall apply to that relevant deposit taker for the year of assessment immediately succeeding that year of assessment and for each subsequent year of assessment.

(3) Notwithstanding anything contained in the principal section, where the provisions of this section apply to a relevant deposit taker for any year of assessment, subsection (4) of the principal section shall not apply to the relevant deposit taker for that year of assessment but subsection (4) of this section shall apply to that relevant deposit taker for that year and, as respects that relevant deposit taker for that year, any reference in the Tax Acts, apart from this section, to subsection (4) of the principal section, shall be construed as a reference to subsection (4) of this section.

(4) Notwithstanding subsection (3) of the principal section, a relevant deposit taker shall, for each year of assessment, pay to the Collector within 15 days from the 5th day of October in that year of assessment an amount on account of appropriate tax which shall be not less than the amount determined by the formula set out in the Table to this subsection; and any amount on account of appropriate tax so paid by the relevant deposit taker for a year of assessment shall be treated as far as may be as a payment on account of any appropriate tax due and payable by it for that year of assessment under the said subsection (3):

Provided that, where the amount on account of appropriate tax paid by a relevant deposit taker for a year of assessment under this subsection exceeds the amount of appropriate tax due and payable by it for that year of assessment under the said subsection (3), the excess shall be carried forward and shall be set off against any amount due and payable under this subsection or the said subsection (3) by the relevant deposit taker for any subsequent year of assessment (any such set-off being effected as far as may be against an amount so due and payable at an earlier date rather than at a later date).

TABLE

A – (B – C)

where

A is the amount of appropriate tax which would be due and payable by the relevant deposit taker for the year of assessment (hereafter in this Table referred to as the "relevant year") in accordance with subsection (3) of the principal section if the total amount of the relevant interest which had accrued in the period of twelve months ending on the 5th day of October in the relevant year on all relevant deposits held by the relevant deposit taker in that period (and no more) had been paid by it in the relevant year,

B is the amount of appropriate tax which was due and payable by the relevant deposit taker for the year of assessment immediately preceding the relevant year in accordance with the said subsection (3), and

C is an amount equal to the lesser of the amount at B and the amount treated, in accordance with the provisions of this subsection or in accordance with the provisions of subsection (4) of the principal section, as paid by the relevant deposit taker on account of the appropriate tax due and payable by it for the year of assessment immediately preceding the relevant year.

(5) This section shall be construed together with Chapter IV of Part I of the Finance Act, 1986 , and any tax payable in accordance with this section shall be deemed to be payable in accordance with that Chapter.

CHAPTER II Income Tax: Relief for Investment in Corporate Trades

Amendment of section 12 (the relief) of Finance Act, 1984 .

8.— Section 12 of the Finance Act, 1984 , is hereby amended—

( a ) by the addition to paragraph (c) of subsection (1) of the following proviso:

"Provided that, where the money raised was used, is being used, or is intended to be used, by the company for the purpose of purchasing a ship for use by it in the course of a qualifying shipping trade carried on by it, the aforementioned evidence shall include a certificate by the Minister for the Marine certifying that the purchase of the ship was, is or would be eligible to be grant-aided under a statutory scheme of assistance for the purchase of ships administered by the Department of the Marine.",

and

( b ) by the addition to subsection (3), with effect as on and from the 6th day of April, 1987, of the following proviso:

"Provided that where—

( a ) in accordance with the provisions of section 27, relief is due in respect of an amount subscribed as nominee for a qualifying individual by the managers of a designated fund, and

( b ) the eligible shares in respect of which the amount is subscribed are issued in the year of assessment next following the year of assessment in which that amount was subscribed to the designated fund,

the individual may elect, by notice in writing to the inspector, to have the relief due given as a deduction from his total income for the year of assessment in which the amount was subscribed to the designated fund instead of as a deduction from his total income for the year of assessment in which the shares are issued.".

Amendment of section 13 (limits on relief) of Finance Act, 1984 .

9.— Section 13 of the Finance Act, 1984 , is hereby amended, with effect as on and from the 6th day of April, 1984, by the insertion after subsection (2) of the following subsections:

"(2A) If, in any year of assessment, a greater amount of relief would be given to an individual in respect of the amount or the total amount subscribed by him for eligible shares (in this subsection referred to as 'the relevant subscription') issued to him in that year or, where the proviso (inserted by the Finance Act, 1987 ) to section 12 (3) applies, in the next following year of assessment but for either or both of the following reasons, that is—

( a ) an insufficiency of total income, or

( b ) the operation of subsection (2),

the amount of the relief which would be given but for those reasons less the amount, or the aggregate amount, of any relief in respect of the relevant subscription which is given in that year of assessment, shall be carried forward to the next following year of assessment, and shall be treated for the purposes of the relief as an amount subscribed directly by the individual for eligible shares issued to him in that following year:

Provided that this subsection shall not apply or have effect for any year of assessment subsequent to the year 1987-91.

(2B) If, and so far as, an amount once carried forward under subsection (2A) (and treated as an amount subscribed directly by an individual for eligible shares issued to him in the said following year of assessment) is not deducted from his total income for that year of assessment, it shall be carried forward again to the next following year of assessment (and treated as an amount subscribed directly by him for eligible shares issued to him in that next following year), and so on for succeeding years of assessment:

Provided that this subsection shall not apply or have effect for any year of assessment subsequent to the year 1990-91.

(2C) Relief shall be given to an individual for any year of assessment in the following order—

( a ) firstly, in respect of an amount carried forward from an earlier year of assessment in accordance with the provisions of subsection (2A) or (2B), and, in respect of such an amount so carried forward, for an earlier year of assessment in priority to a later year of assessment, and

( b ) then, and only then, in respect of any other amount for which relief is to be given in that year of assessment.".

Amendment of section 15 (qualifying companies) of Finance Act, 1984 .

10.— Section 15 of the Finance Act, 1984 , is hereby amended—

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

"(3A) ( a ) A company, whose trade includes one or more tourist traffic undertakings within the meaning of section 16 (2A) (inserted by the Finance Act, 1987 ), shall not be a qualifying company unless and until it has shown to the satisfaction of the Revenue Commissioners that it has submitted to, and has had approved of by, Bord Fáilte Éireann (hereafter in this Chapter referred to as 'the Bord') a three-year development and marketing plan in respect of that undertaking, or those undertakings, as the case may be, which plan is primarily designed and formulated to increase tourist traffic, and revenue, from outside the State.

( b ) In considering whether to approve of such a plan, the Bord shall have regard only to such guidelines in relation to such approval as may, from time to time, be agreed, with the consent of the Minister for Finance, between it and the Minister for Tourism and Transport, and those guidelines may, without prejudice to the generality of the foregoing, set out—

(i) the extent to which the company's interests in land and buildings may form part of its total assets,

(ii) specific requirements which have to be met in order to comply with the objective mentioned in paragraph (a), and

(iii) the extent to which the money raised through the issue of eligible shares should be used in promoting outside the State the undertaking or undertakings, as the case may be.", and

( b ) by the insertion after subsection (12) of the following new subsection:

"(13) Notwithstanding any of the foregoing provisions of this section, a company shall not be a qualifying company if, during the relevant period—

( a ) the company would not be a qualifying company but for the provisions of subsection (IA) (inserted by the Finance Act, 1987 ) of section 26, and

( b ) the company or any of its subsidiaries—

(i) subscribes for new or existing share capital in, or

(ii) makes loans to,

a subsidiary which is a qualifying subsidiary by virtue of the said subsection (1A).".

Amendment of section 16 (qualifying trades) of Finance Act, 1984 .

11.— Section 16 of the Finance Act, 1984 , is hereby amended—

( a ) by the substitution in subsection (2) for paragraph (a) of the following paragraph:

"( a ) consist wholly or mainly of one or more of the following trading operations (in this Chapter referred to as 'qualifying trading operations')—

(i) the manufacture of goods within the meaning of Chapter VI of Part I of the Finance Act, 1980 :

Provided that trading operations or activities included in the definition of, or regarded as the manufacture within the State of, goods for the purposes of the said Chapter VI by any enactment enacted after the passing of this Act, shall not, subject to the following provisions of this paragraph, be regarded as qualifying trading operations for the purposes of this Chapter,

(ii) the rendering of services (other than relevant trading operations within the meaning of section 39B (inserted by the Finance Act, 1987 ) of the Finance Act, 1980) in the course of a service undertaking in respect of which an employment grant was made by the Industrial Development Authority under section 2 of the Industrial Development (No. 2) Act, 1981 ,

(iii) in respect of a subscription for eligible shares made on or after the 1st day of January, 1987, the carrying on of qualifying shipping activities within the meaning of section 28 (1) of the Finance Act, 1987 ,

(iv) in respect of a subscription for eligible shares made on or after the 6th day of April, 1987, the operation of one or more tourist traffic undertakings within the meaning of subsection (2A) (inserted by the Finance Act, 1987 ), and

(v) in respect of a subscription for eligible shares made on or after the date on which section 29 of the Finance Act, 1987 , comes into effect, the sale of export goods by a Special Trading House within the meaning of subsection (1CC2) (inserted by the Finance Act, 1987 ) of section 39 of the Finance Act, 1980 ,

and

( b ) by the insertion after subsection (2) of the following subsection:

"(2A) For the purposes of subsection (2), tourist traffic undertakings mean—

( a ) the operation of tourist accommodation facilities such as hotels, guest houses, caravan and camping sites and self-catering accommodation for which the Bord maintains a register in accordance with the Tourist Traffic Acts, 1939 to 1983,

( b ) the operation of such other classes of facilities as may be approved of for the purposes of the relief by the Minister for Finance, in consultation with the Minister for Tourism and Transport, on the recommendation of the Bord in accordance with specific codes of standards laid down by it, or

( c ) the promotion outside the State of any of the facilities mentioned in paragraphs (a) and (b).".

Amendment of provisional relating to subsidiaries.

12.—(1) Section 26 of the Finance Act, 1984 , is hereby amended by the insertion, after subsection (1), of the following subsection:

"(1A) ( a ) Notwithstanding the provisions of subsection (1), a qualifying company whose trade consists wholly or mainly of the carrying on of qualifying shipping activities within the meaning of section 28 (1) of the Finance Act, 1987 , may have one or more subsidiaries which do not satisfy either of the conditions in paragraph (b) of subsection (1): Provided that the condition mentioned in paragraph (b) of this subsection is satisfied.

( b ) The said condition is that the subsidiary or each subsidiary is a company which exists for the purpose of carrying on a trade consisting wholly or mainly of the carrying on of qualifying shipping activities.

( c ) in paragraph (b), 'qualifying shipping activities' has the meaning assigned to it by section 28 (1) of the Finance Act, 1987 , as if, in the definition of a 'qualifying ship' for the purposes of the said meaning, paragraphs (a) and (b) of that definition were deleted.

( d ) In this subsection, the question of whether a trade consists wholly or mainly of the carrying on of qualifying shipping activities shall, with any necessary modifications, be construed in accordance with the proviso to section 16 (2).".

(2) The Second Schedule to the Finance Act, 1984 , is hereby amended, by the substitution for paragraph 1 of the following paragraph:

"1. The shares issued by the qualifying company may, instead of, or as well as, being issued for the purpose mentioned in subsection (1) (b) of section 12, be issued for the purpose of raising money for a qualifying trade which is being carried on by a subsidiary (other than a subsidiary which is a qualifying subsidiary by virtue of section 26 (1A) (inserted by the Finance Act, 1987 ) or which such a subsidiary intends to carry on; and where shares are so issued subsections (1) (c), (4), (5), (7) (b) and (8) of section 12 shall have effect as if references to the company were or, as the case may be, included, references to the subsidiary.".

CHAPTER III Payments in respect of Professional Services by Certain Persons

Interpretation (Chapter III).

13.—(1) In this Chapter—

"accountable person" has the meaning assigned to it by section 14;

"appropriate tax", in relation to a relevant payment, means—

( a ) where such payment does not include value-added tax, a sum representing income tax on the amount of that payment at the standard rate in force at the time of payment, and

( b ) where such payment includes value-added tax, a sum representing income tax at the standard rate in force at the time of payment on the amount of that payment exclusive of the value-added tax;

"basis period for a year of assessment", in relation to a specified person, means—

( a ) where a relevant payment is to be included in a computation of profits or gains of the said person for the purposes of Case I or 11 of Schedule D, the period on the profits or gains of which income tax for that year fails to be finally computed for the purposes of the said Case I or II:

Provided that—

(i) where two basis periods overlap, the period common to both shall be deemed, for the purposes of this Chapter, to fall in the second basis period only,

(ii) where there is an interval between the end of the basis period for one year of assessment and the basis period for the next year of assessment, then, the interval shall be deemed to be part of the second basis period,

(iii) the reference in subparagraph (i) to the overlapping of two periods shall be construed as including a reference to the coincidence of two periods or to the inclusion of one period in another, and the reference to the period common to both shall be construed accordingly, and

( b ) in any other case, the year of assessment;

"income tax month" means a month beginning on the 6th day of any of the months of April to March in any year;

"professional services" includes—

( a ) services of a medical, dental, pharmaceutical, optical, aural or veterinary nature,

( b ) services of an architectural, engineering, quantity surveying or surveying nature, and related services,

( c ) services of accountancy, auditing or finance and services of financial, economic, marketing, advertising or other consultancies,

( d ) services of a solicitor or barrister and other legal services,

( e ) geological services, and

( f ) training services provided on behalf of An Chomhairle Oiliúina;

"relevant payment" means a payment made on or after the 6th day of June, 1987, in respect of professional services whether or not such services are provided to the accountable person making the payment, but excludes—

( a ) emoluments within the scope of Chapter IV of Part V of the Income Tax Act, 1967 , to which that Chapter applies, and

( b ) payments under a construction contract within the meaning of section 17 of the Finance Act, 1970 , from which tax has been deducted in accordance with the provisions of subsection (2) of that section, or would have been so deducted but for the provisions of subsection (8) of that section;

"specified person" means, in relation to a relevant payment, the person to whom that payment is made;

"tax" means income tax or corporation tax, as the context may require.

(2) For the purposes of this Chapter—

( a ) any reference in this Chapter to the amount of a relevant payment shall be construed as a reference to the amount which would be the amount of that payment if no appropriate tax were to be deducted therefrom, and

( b ) in relation to a specified person, appropriate tax referable to an accounting period or to a basis period for a year of assessment means the appropriate tax deducted from a relevant payment which is taken into account in computing the specified person's profits or gains for the said period and where there is more than one such relevant payment in the said period the aggregate of the appropriate tax deducted from such payments.

Accountable persons.

14.—(1) In this Chapter, "accountable person "means—

( a ) a Minister of the Government,

( b ) a local authority within the meaning of section 2 (2) of the Local Government Act, 1941 , and includes a body established under the Local Government Services (Corporate Bodies) Act, 1971 ,

( c ) a health board,

( d ) the General Medical Services (Payments) Board established under the General Medical Services (Payments) Board (Establishment) Order, 1972 ( S.I. No. 184 of 1972 ),

( e ) the Attorney General,

( f ) the Director of Public Prosecutions,

( g ) the Revenue Commissioners,

( h ) the Commissioners of Public Works in Ireland,

( i ) the Legal Aid Board,

( j ) a vocational education committee or a regional technical college established under the Vocational Education Act, 1930 ,

( k ) An Chomhairle Oiliúina established under the Industrial Training Act, 1967 ,

( l ) a harbour authority established under the Harbours Act, 1946 ,

( m ) An Chomhairle Oiliúna Talmhaíochta established under the Agriculture (An Chornhairle Oiliúna Talmhaíochta) Act, 1979,

( n ) An Foras Talúntais established under the Agriculture (An Foras Taúntais) Act, 1958,

( o ) Údarás na Gaeltachta established under the Údarás na Gaeltachta Act, 1979,

( p ) the Industrial Development Authority established under the Industrial Development Act, 1950, and continued in being by the Industrial Development Act, 1986 ,

( q ) Córas Tráchtála established under the Export Promotion Act, 1959 ,

( r ) Shannon Free Airport Development Company Limited being the company referred to in the Shannon Free Airport Development Company Limited Acts, 1959 to 1986,

( s ) Bord Fáilte Éireann established under the Tourist Traffic Act, 1939 , or

( t ) an institution of higher education within the meaning of the Higher Education Authority Act, 1971 .

(2) For the purposes of this Chapter the Minister for Finance may by Regulations extend the meaning of accountable person by the inclusion in subsection (1) of further persons or classes of persons but such inclusion shall not have effect in relation to payments made before a date to be specified in the Regulations.

(3) Where a Regulation is proposed to be made under subsection (2), a draft thereof shall be laid before Dáil Éireann and the Regulation shall not be made until a resolution approving of the draft has been passed by Dáil Éireann.

Deduction of tax from relevant payments.

15.—(1) An accountable person making a relevant payment shall deduct out of the amount of the payment the appropriate tax in relation to the payment. The specified person to whom such payment is made shall allow such deduction upon receipt of the residue of the payment, and the accountable person making such deduction shall be acquitted and discharged of so much money as is represented by the deduction, as if that sum had actually been paid.

(2) The provisions of the Tax Acts in relation to the computation of profits or gains shall not be affected by the deduction of appropriate tax from relevant payments in accordance with the provisions of subsection (1) and, accordingly, the amount of such relevant payments shall be taken into account in computing the profits or gains of the specified person for tax purposes.

Identification of, and issue of documents to, specified persons.

16.—(1) The specified person shall furnish to the accountable person concerned—

( a ) in the case of a specified person resident in the State or a person having a permanent establishment or fixed base in the State—

(i) details of his income tax or corporation tax number, as may be appropriate, and

(ii) if the relevant payment includes an amount in respect of value-added tax, his value-added tax registration number, and

( b ) in the case of a specified person, other than a person mentioned in paragraph (a), details of his country of residence and his tax reference in that country.

(2) Where the specified person has complied with subsection (1), the accountable person, on making a relevant payment, shall give to such person, in a form prescribed by the Revenue Commissioners, particulars of—

( a ) the name and address of the specified person,

( b ) the person's tax reference as furnished in accordance with paragraph (a) (i) or (b) of subsection (1),

( c ) the amount of the relevant payment,

( d ) the amount of the appropriate tax deducted from that payment, and

( e ) the date on which the payment is made.

Returns and collection of appropriate tax.

17.—(1) Within ten days from the end of every income tax month, the accountable person shall remit to the Collector all amounts of appropriate tax which he is liable under this Chapter to deduct from relevant payments made by him during that income tax month.

(2) Each remittance under subsection (1) shall be accompanied by a return containing, in relation to each specified person to whom a relevant payment has been made in the income tax month concerned, the particulars required by the return.

(3) A return shall be required to be made by an accountable person for an income tax month notwithstanding that no relevant payments were made by the accountable person in that income tax month.

(4) Every return shall be in a form prescribed by the Revenue Commissioners and shall include a declaration to the effect that the return is correct and complete.

(5) The Collector shall give the accountable person a receipt for the total amount so remitted.

(6) All the provisions of the Income Tax Acts relating to the collection and recovery of income tax shall, so far as they are applicable, apply to the collection and recovery of appropriate tax.

Credit for appropriate tax borne.

18.—(1) Where, in relation to an accounting period, a specified person is within the charge to corporation tax and has borne appropriate tax referable to that accounting period he may, subject to the provisions of section 21, claim to have the amount of appropriate tax specified in subsection (4) set against corporation tax chargeable for that accounting period and, where such appropriate tax exceeds such corporation tax, to have the excess refunded to him.

(2) Where, in relation to a year of assessment, a specified person is within the charge to income tax and has borne appropriate tax referable to the basis period for that year of assessment he may, subject to the provisions of section 21, claim to have the amount of appropriate tax specified in subsection (4) set against the income tax chargeable for that year of assessment and, where such appropriate tax exceeds such income tax, to have the excess refunded to him.

(3) The specified person shall, in respect of each claim under subsection (1) or (2), furnish, in respect of each amount of appropriate tax included in the claim, the form given to him by an accountable person in accordance with the provisions of section 16 (2).

(4) The amount of the appropriate tax to be set against corporation tax for an accounting period or income tax for a year of assessment in accordance with subsection (1) or (2) shall be the total of the appropriate tax referable to the accounting period or to the basis period for the year of assessment, as the case may be, which is included in the forms furnished in accordance with subsection (3) and not repaid under any of the provisions of this Chapter.

Interim refunds of appropriate tax.

19.—(1) A specified person may make a claim for an interim refund of the whole or part of the appropriate tax referable to an accounting period or to a basis period for a year of assessment, as the case may be (in this section referred to as "the first-mentioned period"), and the inspector shall, if he is satisfied that the specified person making the claim has complied with the requirements of subsection (2), make such refund as is specified in subsection (3) and, subject to the said requirements as modified in subsection (4) (a), make such refund as is specified in that subsection.

(2) The requirements of this subsection are that—

( a ) the profits or gains for the accounting period or for the basis period for the year of assessment, as the case may be, immediately preceding the first-mentioned period have been finally determined for tax purposes and the amount of tax which was payable for the said accounting period or year of assessment corresponding to the said basis period has been paid (whether by credit for appropriate tax or otherwise), and

( b ) the specified person shall, in respect of each relevant payment included in the claim, furnish to the inspector the form given to him by an accountable person in accordance with the provisions of section 16 (2).

(3) The amount of the tax to be refunded shall be the excess of the total of the appropriate tax included in the forms furnished in accordance with the provisions of subsection (2) (b) (and not already repaid under the provisions of this section) over the amount of tax referred to in subsection (2) (a) less the amount which he is liable to pay or remit—

( a ) under the Value Added Tax Act, 1972 , and the Regulations made thereunder,

( b ) under Chapter IV of Part V of the Income Tax Act, 1967 , and the Regulations made thereunder, and

( c ) in respect of employment contributions under the Social Welfare (Consolidation) Act, 1981 , and the Regulations made thereunder.

( 4 ) ( a ) Where the first-mentioned period is the period in which the trade or profession of the specified person has been set up and commenced, the provisions of subsection (2) (a) shall not apply and the inspector shall, in accordance with the following provisions of this subsection, make an interim refund to the specified person in respect of appropriate tax deducted from relevant payments taken, or to be taken, into account in computing the profits or gains of the said trade or profession.

( b ) For the purposes of determining the amount of the said interim refund the inspector shall determine—

(i) an amount equal to the amount of tax at the standard rate on an amount determined by the formula:

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where—

A is the estimated total amount of the relevant payments to be taken into account as income in computing for tax purposes the profits or gains of the first-mentioned period,

B is the estimated total sum of all amounts to be so taken into account as income in computing the said profits or gains,

C is the estimated number of months or fractions of months comprised in the period in respect of which the claim to the refund is made,

E is the estimated amount to be laid out or expended wholly and exclusively by the specified person in the first-mentioned period for the purposes of the trade or profession,

and

P is the estimated number of months or fractions of months comprised in the first-mentioned period,

and the inspector shall make the estimates referred to in this formula to the best of his knowledge and belief and in accordance with the information available to him, and

(ii) the amount of appropriate tax deducted from the relevant payments in respect of which forms have been submitted in accordance with the provisions of subsection (2) (b) after deducting therefrom any amount of such tax already refunded for the period in respect of which the claim to a refund is made.

( c ) The inspector shall refund an amount of appropriate tax equal to the lesser of the amounts determined at subparagraphs (i) and (ii) of paragraph (b).

(5) In circumstances where the specified person claims and proves the presence of particular hardship, the Revenue Commissioners may waive (in whole or in part) one or more of the conditions for the making of a refund specified in this section and, where the Revenue Commissioners so waive such condition or conditions, they shall determine, having regard to all the circumstances and taking into account the objects and intentions of the previous provisions of this section, an amount of a refund or a further refund which they consider to be just and reasonable and they shall authorise the inspector to make such refund or such further refund, as the case may be, accordingly.

(6) For the purposes of this section, the income of a specified person for an accounting period or a basis period for a year of assessment shall be the total of all amounts received or receivable by him which are taken into account in computing the profits or gains of his trade or profession for that period.

Appointment of credits or interim refunds of appropriate tax.

20.—Where the form referred to in either section 18 (3) or section 19 (2) (b) relates to two or more specified persons, any necessary apportionment shall be made for the purposes of giving effect to sections 18 and 19.

Limitations on credits or interim refunds of appropriate tax.

21.—No amount of appropriate tax shall be set off or refunded more than once under the provisions of this Chapter and any amount of appropriate tax refunded in accordance with the provisions of section 19 shall not be available for set-off under the provisions of section 18.

CHAPTER IV Income Tax and Corporation Tax

Farming amendment of provisions relating to relief in respect of increase in stock values.

22.—(1) Section 31A (inserted by the Finance Act, 1976 ) of the Finance Act, 1975 , is hereby amended by the substitution of "1987" for" 1986" (inserted by the Finance Act, 1986 )-

( a ) in paragraph (iv) (inserted by the Finance Act, 1979 ) of the proviso to subsection (4) (a), and

( b ) in each place where it occurs in subsections (7) and (9) (inserted by the Finance Act, 1984 ),

and the said paragraph (iv), the said subsection (7) (apart from the proviso) and the said subsection (9) (apart from the proviso), as so amended, are set out in the Table to this subsection.

TABLE

(iv) a deduction shall not be allowed under the provisions of this section in computing a company's trading income for any accounting period which ends on or after the 6th day of April, 1987.

(7) Where in relation to an accounting period a company's opening stock value exceeds its closing stock value, the amount of the excess (in this section referred to as the company's "decrease in stock value") shall, if the accounting period ends on a date before the 6th day of April, 1987, be treated in the computation of the company's trading income for the purposes of corporation tax, as a trading receipt of the company's trade for that accounting period:

(9) In the computation of a company's trading income for the purposes of corporation tax for any accounting period which ends on or after the 6th day of April, 1987, in which there is a decrease in stock value, there shall be treated as a trading receipt of the company's trade for that accounting period the amount (if any) by which A exceeds the aggregate of B and C

where—

A is the aggregate amount of the company's decreases in stock value in all accounting periods which ended on or after the 6th day of April, 1987,

B is the aggregate amount of the company's increases in stock value in all accounting periods which ended on or after the 6th day of April, 1987, and

C is the aggregate of the amounts which under this subsection are treated as trading receipts of the company's trade for preceding accounting periods:

(2) Section 12 of the Finance Act, 1976 , is hereby amended—

( a ) by the substitution in subsection (3) of "1987-88" for "1986-78" (inserted by the Finance Act, 1986 ), and

( b ) by the substitution of "1987" for "1986" (inserted by the Finance Act, 1986 ) in each place where it occurs in subsections (5) and (6) (inserted by the Finance Act, 1984 ),

and the said subsection (3), the said subsection (5) (apart from the proviso) and the said subsection (6) (apart from the proviso), as so amended, are set out in the Table to this subsection.

TABLE

(3) Any deduction allowed by virtue of this section in computing a person's trading profits for an accounting period shall not have effect for any purpose of the Income Tax Acts for any year of assessment prior to the year 1974-75 or later than the year 1987-88.

(5) In the computation of a person's trading profits for an accounting period in which there is a decrease in stock value and which ends on a date in the period from the 6th day of April, 1976, to the 5th day of April, 1987, the amount of that decrease shall be treated as a trading receipt of the trade for that accounting period:

(6) In the computation of a person's trading profits for any accounting period in Which there is a decrease in stock value and which ends on or after the 6th day Of April, 1987, there shall be treated as a trading receipt of the trade for that accounting period the amount (if any) by which A exceeds the aggregate of B and C

where—

A is the aggregate amount of the person's decreases in stock value in all accounting periods which ended on or after the 6th day of April, 1987,

B is the aggregate amount of the person's increases in stock value in all accounting periods which ended on or after the 6th day of April, 1987, and

C is the aggregate of the amounts which are treated as trading receipts of the person's trade for preceding accounting periods which ended on or after the 6th day of April, 1987:

(3) This section shall have effect only as respects a trade of farming.

Repeal of section 362 (relief on profits from business of sea or air transport) of Income Tax Act, 1967 .

23.—(1) Section 362 of the Income Tax Act, 1967 , is hereby repealed.

(2) Notwithstanding the repeal of section 362 of the Income Tax Act, 1967 , effected by subsection (1), where, prior to the commencement of this Act, an order has been made under that section, the arrangement to which the order relates shall have the force of law to the same extent as if this section had not been enacted.

Capital allowances for certain road vehicles.

24.—(1) (a) In this section—

"car" means any mechanically propelled road vehicle being a vehicle which has been constructed or adapted to be primarily suited to the carriage of passengers and not to the conveyance of goods or burden of any description or to the haulage by road of other vehicles, and which is a vehicle of a type commonly used as a private vehicle and suitable to be so used, and includes a vehicle in use for the purpose referred to in paragraph (ii) of the definition of "qualifying purposes";

"chargeable period" and "chargeable period or its basis period" have, respectively, the meanings assigned to them by paragraph 1 (2) of the First Schedule to the Corporation Tax Act, 1976 ;

"qualifying purposes" means the use, in the ordinary course of trade, of a car for the purposes of—

(i) short-term hire to members of the public, or

(ii) the carriage of members of the public while the car is a licensed public hire vehicle fitted with a taximeter in pursuance of the Road Traffic (Public Service Vehicles) Regulations, 1963 ( S.I. No. 191 of 1963 );

"short-term hire" means, in relation to a car, the hire of the car to a person under a hire-drive agreement (within the meaning of section 3 of the Road Traffic Act, 1961 ) for a continuous period which does not exceed eight weeks:

Provided that, where a period of hire of a car to a person by another person is followed within seven days of the end of that period by a further period of hire of a car (whether the same car or not) to that person by that other person, the two periods shall be deemed for the purposes of this section, including any subsequent application of this proviso, to constitute together a single continuous period of hire, so that where that continuous period of hire exceeds eight weeks, the period of hire of any car included in that continuous period of hire shall not be treated as a period of short-term hire, and, for the purposes of this proviso, any reference to a person shall be treated as including a reference to any other person who would be regarded as connected with that person under section 16 of the Finance (Miscellaneous Provisions) Act, 1968 ;

"tax" means income tax or corporation tax, as the case may be.

( b ) For the purposes of this section, a car shall be regarded as used by a person for qualifying purposes as respects a chargeable period if, and only if, not less than 75 percent. of its use (determined by reference to the periods of time in which the car is used, or available for use, for any purpose) by that person in the chargeable period or its basis period is for qualifying purposes:

Provided that, where as respects a chargeable period the use of a car for qualifying purposes does not satisfy the requirements of this paragraph but would have satisfied those requirements if the reference to "75 per cent." were a reference to "50 per cent.", the car shall be deemed to be used for qualifying purposes as respects that chargeable period if the use of the car by that person for qualifying purposes satisfied the requirements of this paragraph as respects the immediately preceding chargeable period, or the car shall be deemed to be so used if the said use of the car has satisfied those requirements as respects the immediately succeeding chargeable period and the inspector shall accordingly adjust the amount of capital allowances falling to be made in taxing the person's trade and any amount of tax overpaid shall be repaid.

(2) In determining what capital allowances fall to be made to a person, for any chargeable period ending on or after the 6th day of April, 1987, in taxing a trade which consists of or includes the carrying on of qualifying purposes, section 241 of the Income Tax Act, 1967 , shall apply to a car which, as respects that period, has been used by the person for qualifying purposes as if—

( a ) the reference in subsection (1) of that section to "five-fourths of the amount" were a reference to "twice the amount", and

( b ) the second proviso to the said subsection (1) were deleted.

Application of 52 (capital allowances: treatment of grant, etc.) of Finance Act, 1986 , to food processing trade.

25.—(1) For the purposes of this section—

"food processing trade" means a trade which consists of, or includes, the manufacture of processed food;

"processed food" means goods, manufactured within the State in the course of a trade by a company, which—

( a ) are intended for human consumption as a food, and

( b ) have been manufactured by a process involving the use of machinery or plant whereby the goods which are produced by the application of that process differ substantially in form and value from the materials to which the process has been applied and, without prejudice to the generality of the foregoing, the process does not consist primarily of—

(i) the acceleration, retardation, alteration or application of a natural process, or

(ii) the application of methods of preservation, pasteurisation or any similar treatment;

"qualifying machinery or plant" means machinery or plant used solely in the course of a process of manufacture whereby processed food is produced.

(2) The provisions of subsection (1) of section 52 of the Finance Act, 1986 , shall not apply, and shall be deemed never to have applied, where an allowance falls to be made under section 241 or section 251 of the Income Tax Act, 1967 , in taxing a food processing trade carried on by a company and the capital expenditure in respect of which the allowance falls to be made was incurred by that company and was so incurred in respect of qualifying machinery or plant:

Provided that the reference in this subsection to expenditure incurred by a company shall not include any expenditure which it is deemed to have incurred in accordance with the provisions of section 241 (2) or section 252 of the said Act.

Amendment of section 40 (capital allowances for certain leased assets) of Finance Act, 1984 .

26.— Section 40 of the Finance Act, 1984 , is hereby amended by the substitution in paragraph (a) of subsection (10) (inserted by the Finance Act, 1986 ) of "lessee" for "borrower", and the said paragraph, as so amended, is set out in the Table to this section.

TABLE

( a ) the manufacture of goods (including activities which would, if the lessee were to make a claim for relief in respect of the trade under Chapter VI of Part 1 of the Finance Act, 1980 , fall to be regarded for the purposes of that Chapter as the manufacture of goods), or

Designated areas for urban renewal relief.

27.—(1) For the purposes of Chapter V of Part I of the Finance Act, 1986 , the Minister for Finance, after consultation with the Minister for the Environment, may, by order, direct that—

( a ) (i) the definition of "designated area" contained in section 41 of that Act shall include such area or areas described in the order which, but for the order, would not be included in that definition,

(ii) as respects any such area so described in the order, the definition of "qualifying period" in section 42, 44 or 45 of the said Act shall be construed as a reference to such period as shall be specified in the order in relation to that area: provided that no such period specified in the order shall commence prior to the date of the passing of this Act, or end after the 31st day of May, 1991,

and

( b ) the definition of "the Custom House Docks Area" contained in the said section 41 shall, with effect from the date of such order, include such area or areas described in the order which, but for the order, would not be included in that definition,

and where the Minister for Finance so orders, the said definition of "designated area" or "the Custom House Docks Area", as the case may be, shall he deemed to include the said area or areas and the said definition of "qualifying period" shall be construed as a reference to the said period specified in the order.

(2) The Minister for Finance may make orders for the purpose of this section and any order made under this section shall be laid before Dáil Éireann as soon as may be after it is made and, if a resolution annulling the order is passed by Dáil Éireann within the next twenty-one days on which Dáil Éireann has sat after the order is laid before it, the order shall be annulled accordingly, but without prejudice to the validity of anything previously done thereunder.

CHAPTER V Corporation Tax

Relief in relation to income from qualifying shipping trade.

28.—(1) In this section—

"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,

(ii) a tug,

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

(iv) a vessel used 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

(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, and

( d ) 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;

"qualifying shipping trade" means a trade, the income from which is within the charge to corporation tax, carried on in the relevant period, which consists solely of the carrying on of qualifying shipping activities or, in the case of a trade consisting partly of the carrying on of such activities and partly of the carrying on of other activities, that part of the trade consisting solely of the carrying on of qualifying shipping activities and which is treated, by virtue of subsection (2), as a separate trade;

"the relevant period" means the period from the 1st day of January, 1987, to the 31st day of December, 2000;

"specified capital allowances" means capital allowances in respect of—

( a ) expenditure incurred by any person, in the relevant period, on the provision of a qualifying ship which is in use in, or is intended to be used in, a qualifying shipping trade, or

( b ) the diminished value by reason of wear and tear during the relevant period of a qualifying ship in use for the purposes of a qualifying shipping trade,

and any such capital allowances shall be specified capital allowances notwithstanding that they are not treated as trading expenses of the qualifying shipping trade.

(2) Where, during the relevant period, a company carries on, as part of a trade, qualifying shipping activities, those activities shall be treated for all the purposes of the Tax Acts, other than any provisions of those Acts relating to the commencement or cessation of a trade, as a separate trade, distinct from all other activities carried on by the company as part of the trade, and any necessary apportionment shall be made of receipts or expenses:

Provided that this subsection shall not apply in relation to a claim by the company for the set off, under section 16 (1) of the Corporation Tax Act, 1976 —

( a ) against income arising during the relevant period, of a loss incurred before the commencement of the relevant period, and

( b ) against income arising after the end of the relevant period, of a loss incurred during the relevant period.

(3) Section 39 of the Finance Act, 1980 , is hereby amended, as respects a company carrying on a qualifying shipping trade in any accounting period or part of an accounting period of that company falling within the relevant period, by the insertion after subsection (1CC) (inserted by the Finance Act, 1984 ) of the following subsection:

"(1CC1) ( a ) In this subsection 'qualifying shipping activities' and 'qualifying shipping trade' have, respectively, the same meanings as in section 28 of the Finance Act, 1987 .

( b ) The following provisions shall apply, for the purposes of relief under this Chapter, in relation to a company carrying on a qualifying shipping trade:

(i) qualifying shipping activities carried on in the course of the qualifying shipping trade shall be regarded as the manufacture within the State of goods,

(ii) any amount receivable from the carrying on of the said activities 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).".

(4) Notwithstanding any other provision of the Tax Acts, for the purposes of granting relief from tax (and in this subsection "tax" shall mean income tax or corporation tax, as the case may be) in respect of any income or profits arising in the relevant period, or for the purposes of determining the amount of such income or profits which is chargeable to tax—

( a ) specified capital allowances shall be allowed only—

(i) in computing the income from a qualifying shipping trade, or

(ii) in computing or charging to tax any income arising from the letting on charter of the qualifying ship to which the specified capital allowances refer, other than letting on charter which is a qualifying shipping activity,

and shall not be allowed in computing any other income or profits or in taxing any other trade or in charging any other income to tax,

( b ) a loss incurred in the relevant period in a qualifying shipping trade shall not be set off—

(i) against any profits under section 16 (2) of the Corporation Tax Act, 1976 , except to the extent of the amount of income from a qualifying shipping trade included in those profits, or

(ii) against the total profits of a claimant company under section 116 (1) of the Corporation Tax Act, 1976 , except to the extent of the amount of income from a qualifying shipping trade included in those total profits,

and

( c ) the letting on charter of a ship referred to at paragraph (a) (ii), in the course of a trade, shall be deemed, notwithstanding paragraph (b) of subsection (1) of section 40 of the Finance Act, 1984 , to be a trade of leasing for the purposes of that section and to be a separate trade as provided for in subsection (2) of that section.

(5) A qualifying shipping trade shall not be regarded as a specified trade for the purposes of—

( a ) section 40 of the Finance Act, 1984 (as amended by the Finance Act, 1986 ), or

( b ) section 84A (inserted by the Finance Act, 1984 ) of the Corporation Tax Act, 1976 (as so amended).

Relief in relation to income of Special Trading Houses.

29.—As respects any relevant accounting period (within the meaning of section 38 of the Finance Act, 1980 ) or any part of such accounting period, commencing on or after the coming into force of this section, Chapter VI of Part I of the said Finance Act, 1980 , is hereby amended by the insertion in section 39 after subsection (1CC1) (inserted by this Act) of the following subsection—

"(ICC2) (a) In this subsection—

'export goods' means goods, which, in relation to the manufacturer of those goods, are goods for the purposes of this Chapter and which are exported by a Special Trading House, which is not the manufacturer of the goods, but which, in relation to the relevant accounting period, is the company claiming relief from tax by virtue of this subsection where the selling by the Special Trading House of the goods so exported is selling by wholesale;

'selling by wholesale' means selling goods of any class to a person who carries on a business of selling goods of that class or who uses goods of that class for the purposes of a trade or undertaking carried on by him;

'Special Trading House' means a company which exists solely for the purpose of carrying on a trade which consists solely of the selling of export goods.

( b ) For the purposes of this subsection goods are exported when they are transported out of the State in the course of the selling by wholesale of those goods and the goods are not subsequently transported into the State in the course of the selling by wholesale of those goods.

( c ) The following provisions shall apply for the purposes of relief under this Chapter in relation to a Special Trading House:

(i) export goods when exported in the course of its trade by a Special Trading House shall be deemed to have been manufactured by the Special Trading House, notwithstanding that the manufacturer has claimed, or is entitled to claim, relief under this Chapter in respect of the sale by it of those goods,

(ii) any amount receivable by the Special Trading House in payment for the sale of export goods shall be regarded as an amount receivable from the sale of goods, and

( d ) This subsection shall not come into effect until such time as legislation governing the licensing of Special Trading Houses is enacted and shall come into effect subject to such legislation and on such date as the Minister for Finance shall by order appoint.".

Relief in relation to income from certain trading operations carried on in Custom House Docks Area.

30.—As respects any relevant accounting period within the meaning of section 38 of that Act, Chapter VI of Part I of the Finance Act, 1980 , is hereby amended by the insertion after section 39A (inserted by the Finance Act, 1981 ) of the following section—

"39B. (1) in this section—

'the Area' means the Custom House Docks Area as defined in section 41 of the Finance Act, 1986 ;

'company' means any company carrying on a trade;

'the Minister' means the Minister for Finance;

'qualified company' means a company to which the Minister has given a certificate under subsection (2);

'relevant trading operations' means trading operations specified in a certificate given by the Minister under subsection (2);

'trading operation' means any trading operation which, apart from this section, is not the manufacture of goods for the purposes of this Chapter.

(2) Subject to subsections (6) and (7), 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 to be specified in the certificate, relevant trading operations for the purposes of this section, and any certificate so given shall, unless it is revoked under subsection (4) or (5), remain in force until the 31st day of December, 2000.

(3) A certificate under subsection (2) may be given either without conditions or subject to such conditions as the Minister considers proper and specifies therein.

(4) Where, in the case of a company in relation to which a certificate under subsection (2) has been given—

( a ) the trade of the company ceases or, except in the case of a company in relation to which the Minister has, in accordance with subsection (7), given a certificate under subsection (2) and that company has not yet commenced to carry on in the Area the trading operation or trading operations specified in the certificate, becomes carried on wholly outside the Area, or

( b ) the Minister is satisfied that the company has failed to comply with any condition subject to which the certificate was given,

the Minister may, by notice in writing served by registered post on the company, revoke the certificate with effect from such date as may be specified in the notice.

(5) Where, in the case of a company in relation to which a certificate under subsection (2) has been given, the Minister is of the opinion that any activity of the company has had, or may have, an adverse effect on the use or development of the Area or is otherwise inimical to the development of the Area, then—

( a ) the Minister may, by notice in writing served by registered post on the company, require the company to desist from such activity with effect from such date as may be specified in the notice, and

( b ) if the Minister is not satisfied that the company has complied with the requirements of the said notice, he may, by a further notice in writing served by registered post on the company, revoke the certificate with effect from such date as may be specified in the said further notice.

(6) Subject to subsection (7), the Minister shall not certify, under subsection (2), that a trading operation is a relevant trading operation unless—

( a ) it is carried on within the Area,

( b ) the Minister is satisfied that it will contribute to the development of the Area as an International Financial Services Centre, and

( c ) it falls within one or more of the following classes of trading operations—

(i) the provision for persons not ordinarily resident in the State of services, in relation to transactions in foreign currencies, which are of a type normally provided by a bank in the ordinary course of its trade,

(ii) the carrying on behalf of persons not ordinarily resident in the State of international financial activities including, in particular,-

(I) global money-management,

(II) international dealings in foreign currencies and in futures, options and similar financial assets which are denominated in foreign currencies,

(III) dealings in bonds, equities and similar instruments which are denominated in foreign currencies, and

(IV) insurance and related activities,

(iii) the provision for persons not ordinarily resident in the State of services of, or facilities for, processing, control, accounting, communication, clearing, settlement or information storage in relation to financial activities,

(iv) the development or supply of computer software for use in the provision of services or facilities of a type referred to in subparagraph (iii) or for the reprocessing, analysing or similar treatment of information in relation to financial activities, or

(v) trading operations which are similar to, or ancillary to, any of those operations described in the foregoing provisions of this section in regard to which the Minister is of the opinion that they contribute to the use of the Area as an International Financial Services Centre:

Provided that the references in this subsection to any service or facility provided for, or any activity carried on behalf of, a person not ordinarily resident in the State shall not include any such service or facility provided for, or any activity carried on behalf of, the whole or any part of a trade carried on by that person in the State.

(7) Where the Minister would have certified a trading operation under subsection (2) but for the fact that the condition specified in paragraph (a) of subsection (6) was not satisfied as respects that trading operation, he may, notwithstanding that that condition is not satisfied, certify the said trading operation under subsection (2) if he is satisfied that—

( a ) the trading operation is not carried on within the Area due to circumstances outside the control of the company carrying on the trading operation,

( b ) the said company intends to carry on, and will commence to carry on, the trading operation within the Area within such period of time as the Minister may specify under subsection (3) as a condition subject to which he gives the certificate under subsection (2) in respect of the trading operation, and

( c ) throughout the period, following the giving of the certificate, during which the trading operation will be carried on outside the Area, it will be carried on in premises which the company carrying on the trading operation is entitled to occupy under a lease or similar agreement, entered into on an arm's length basis with a person who would not be treated as connected with the company for the purposes of the Corporation Tax Acts, and the period of occupancy of the premises to which the company is entitled under the lease or similar agreement, or to which it would be entitled if it exercised any rights conferred by that lease or similar agreement, is not greater than the period which the Minister considers sufficient to permit the company to carry on the trading operation prior to it commencing to carry it on in the Area.

(8) In the case of a qualified company carrying on relevant trading operations, the following provisions shall apply for the purpose of relief under this Chapter—

( a ) the relevant trading operations shall be regarded as the manufacture within the State of goods, and

( b ) any amount receivable in payment for anything sold, or any services rendered, in the course of the relevant trading operations shall be regarded as an amount receivable from the sale of goods.

(9) The inspector may by notice in writing require a company claiming relief from tax by virtue of this section to furnish him with such information or particulars as may be necessary for the purpose of giving effect to 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".

Amendment of Chapter VI (manufacturing companies) of Part I of Finance Act, 1980 .

31.—As respects any relevant accounting period (within the meaning of section 38 of the Finance Act, 1980 ), or part of such accounting period, commencing on or after the passing of this Act, Chapter VI of Part I of the said Finance Act, 1980 , is hereby amended by the insertion in section 39 after subsection (1CC2) (inserted by this Act) of the following subsection:

"(1CC3) The definition of 'goods' contained in subsection (1) shall include plants cultivated in the State, by the process of plant biotechnology known as 'micro-propagation' or 'plant cloning', 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 and references in this Chapter to 'manufactured' shall be construed, in relation to such plants, as including references to cultivated and words in this Chapter cognate to 'manufactured' shall be construed accordingly.".

Companies: credit for farm tax.

32.—For the purposes of giving credit for farm tax paid by a company and determining the amount of corporation tax payable by a company, section 16 of the Finance Act, 1986 , and section 3 shall apply with any necessary modifications and as if—

( a ) references in those sections to the year 1986-87 were references to any accounting period ending in that year,

( b ) references to an individual being liable for the payment of farm tax on a date within a year of assessment were references to a company being liable for the payment of farm tax on any date on or before the 30th day of June, 1987,

( c ) references in those sections to—

(i) "income tax- were references to "corporation tax",

(ii) "individual", "an individual" and "the individual" were, respectively, references to "company", "a company" and "the company",

(iii) "he" or "him" and "his" were, respectively, references to "it" and "its", and

(iv) "year of assessment" were references to "accounting period",

( d ) references to the amount of farm tax paid or borne by a person in a year of assessment or to the amount of farm tax payable by an individual for a calendar year were references to the amount of farm tax paid or borne by a person on or before the 30th day of June, 1987, and

( e ) for the Third Schedule to that Act there were substituted the following Schedule—

"THIRD SCHEDULE

TAX APPROPRIATE TO THE PROFITS OR GAINS FROM FARMING

'Tax appropriate to the profits or gains from farming', in relation to a company which is chargeable to corporation tax for an accounting period in respect of profits which include or consist of income from farming (within the meaning of Chapter II of Part I of the Finance Act, 1974 ), means the amount determined by the formula—

[image not available: a10y1987s32-1.bmp]

where—

F is the amount of the income from farming included in the profits of the company brought into charge to corporation tax for that accounting period, after any deduction from or addition to that income under section 14 of the Corporation Tax Act, 1976 , and after deducting from that income any loss treated as reducing that income,

P is the amount of the profits of the company brought into charge to corporation tax for that accounting period before any deduction therefrom 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, and

T is the amount of corporation tax payable by the company for the accounting period, before any relief in respect of farm tax or advance corporation tax paid or foreign tax and after deducting any corporation tax payable by virtue of section 101 or 162 of the Corporation Tax Act, 1976 .".

Application of section 79 (reduced rate of corporation tax for certain income) of Corporation Tax Act, 1976 to certain interest.

33.—As respects any interest to which section 28 of the Finance Act, 1976 , applies on any housing loan (within the meaning of that section) granted on or after the 22nd day of May, 1987, section 79 of the Corporation Tax Act, 1976 , shall apply as if the reference in subsection (1) of the said section 79 to "35 per cent." were a reference to "45 per cent.".

Exemption from corporation tax of profits arising from the National Lottery.

34.—Notwithstanding any provision of the Corporation Tax Acts, profits arising in any accounting period ending after the 31st day of December, 1986, to a company authorised by virtue of a licence granted by the Minister for Finance under the National Lottery Act, 1986 , to hold the National Lottery, shall be exempt from corporation tax.

Relief for investment in films.

35.—(1) In this section—

"allowable investor company" means, in relation to a qualifying company, a company which is not connected with the qualifying company;

"film" means a film which is produced—

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

( b ) wholly or principally for exhibition to the public in cinemas or by way of television broadcasting,

but does not include a film made for exhibition as an advertising programme or as a commercial;

"qualifying company" means a company which—

( a ) is incorporated in the State, and

( b ) is resident in the State and is not resident elsewhere, and

( c ) exists solely for the purposes of the production and distribution of a qualifying film or qualifying films;

"qualifying film" means a film in respect of which not less than 75 per cent. of the work on the production of the film is carried out in the State and not more than 60 per cent. of the cost of the production of the film is met by relevant investments;

"qualifying period" means the period commencing on the date of the passing of this Act and ending on the third anniversary of that date;

"relevant investment" means a sum of money which is—

( a ) paid in a qualifying period to a qualifying company, whether in respect of shares in that qualifying company or otherwise, by an allowable investor company on its own behalf, and

( b ) paid by such allowable investor company for the purpose of enabling the qualifying company to produce a qualifying film, and

( c ) used by the qualifying company, within two years of the receipt of that sum, for that purpose,

but does not include a sum of money paid to the qualifying company on terms that it will be repaid, and a reference to the making of a relevant investment shall be construed as a reference to the payment of such a sum to a qualifying company.

(2) Subject to the provisions of this section, where, in an accounting period, an allowable investor company makes a relevant investment, it shall, on due claim and on proof of the facts, be given a deduction of the amount of that investment from its total profits for the accounting period:

Provided that, where the amount of the deduction to which the allowable investor company is entitled under this section in an accounting period exceeds its profits for that accounting period, the excess shall be carried forward to the succeeding accounting period and the amount so carried forward shall be treated for the purposes of this section, other than subsection (3), as if it were a relevant investment made in that succeeding accounting period.

(3) Where, in any period of twelve months ending on an anniversary of the passing of this Act, the amount, or the aggregate amount of the relevant investments made by an allowable investor company, or by such company and all companies which, at any time in that period, would be regarded as connected with such company, exceeds £100,000, no relief shall be given under this section for the excess and, where there is more than one such relevant investment, the inspector, or, on appeal, the Appeal Commissioners, shall make such apportionment of the relief available as shall be just and reasonable to allocate to each relevant investment a due proportion of the relief available and, where necessary, to grant to each allowable investor company concerned an amount of relief proportionate to the amount of the relevant investment or the aggregate amount of the relevant investments made by it in the period.

(4) A claim to relief under this section may be allowed at any time after the payment of a sum to a qualifying company, which, if it is used, within two years of its being paid, by the qualifying company for the production of a qualifying film, will be a relevant investment, if the inspector is satisfied that all the conditions for relief are, or will be, satisfied, but the relief shall be withdrawn if, by reason of the happening of any subsequent event or the failure of an event to happen which at the time the relief was given was expected to happen, it appears that the company making the claim was not entitled to the relief allowed.

(5) An allowable investor company shall not be entitled to relief in respect of a relevant investment unless it is established to the satisfaction of the inspector, or, on appeal, of the Appeal Commissioners, that the relevant investment—

( a ) has been made for bona fide commercial purposes and not as part of a scheme or arrangement the main purpose or one of the main purposes of which is the avoidance of tax,

( b ) that the relevant investment has been, or will be, used in the production of a qualifying film, and

( c ) the relevant investment is made at the risk of the company and neither the company nor any person who would be regarded as connected with the company, is entitled to receive, directly or indirectly, any payment from the qualifying company other than a payment made on an arm's length basis for goods or services supplied or a payment out of the proceeds of exploiting the film to which the company is entitled under the terms subject to which the relevant investment is made.

(6) Where any relief has been given under this section which is subsequently found not to have been due, it shall be withdrawn by making an assessment to corporation tax under Case IV of Schedule D for the accounting period or accounting periods in which the relief was given, and, notwithstanding anything in the Tax Acts, such an assessment may be made at any time.

( 7 ) ( a ) Subject to paragraph (b), where an allowable investor company is entitled to relief under this section in respect of any sum, or any part of a sum, or would be so entitled on making due claim, as a deduction from its total profits for any accounting period, it shall not be entitled to any relief for that sum, or any part of a sum, in computing its income or profits, or as a deduction from its income or profits, for any accounting period under any other provision of the Corporation Tax Acts or the Capital Gains Tax Acts.

( b ) Where an allowable investor company has made a relevant investment by way of a subscription for new ordinary shares of a qualifying company, and none of those shares are disposed of by the allowable investor company within three years of their acquisition by that company, then the sums allowable as deductions from the consideration in the computation for the purpose of capital gains tax of the gain or loss accruing to the company on the disposal of those shares shall be determined without regard to any relief under this section which the company has obtained, or would be entitled on due claim to obtain, except that where those sums exceed the consideration they shall be reduced by the amount equal to—

(i) the amount in respect of which the allowable investor company has obtained relief under this section in respect of the subscription for those shares, or

(ii) the amount of the excess,

whichever is the less.

( c ) For the purposes of this subsection "new ordinary shares" means "new ordinary shares" forming part of the ordinary share capital of a qualifying company which, throughout the period of three years commencing on the date such shares are issued, carry no present or future preferential right to dividends, or to a company's assets on its winding up, and no present or future preferential right to be redeemed.

(8) Section 157 of the Corporation Tax Act, 1976 , shall apply for the purposes of this section.

PART II CUSTOMS AND EXCISE

Relief for certain hydrocarbon oil.

36.—Where it is shown to the satisfaction of the Revenue Commissioners that used hydrocarbon oil, chargeable with the duty o excise imposed by paragraph 12 (1) of the Imposition of Duties (No. 221) (Excise Duties) Order, 1975 ( S.I. No. 307 of 1975 ), and satisfying the requirements as to viscosity and colour specified in paragraph 3 of the Imposition of Duties (No. 256) (Excise Duty on Hydrocarbon Oils) Order, 1981 (S.I. No. 404 of 1981), was imported on or after the 1st day of August, 1987, upon payment of the said duty of excise and underwent, subsequent to importation, a process of filtering centrifuging or similar processing in order to render it suitable for use as a fuel oil for industrial purposes, they may, subject to compliance with such conditions as they may think fit to impose, repay the duty so paid, less the sum of any rebate of duty allowed and an amount calculated at the rate of £0.76 per hectolitre on the said used oil:

Provided that no repayment as aforesaid shall be allowed on any hydrocarbon oil which, in the opinion of the Revenue Commissioners, has been rendered suitable by the said processing for use as a lubricating oil or for combustion in the engine of a motor vehicle.

Confirmation of Orders.

37.—The Orders mentioned in the Table to this section are hereby confirmed.

TABLE

S.I. No. 438 of 1986	Imposition of Duties (No. 284) (Beer) Order, 1986
S.I. No. 19 of 1987	Imposition of Duties (No. 285) (Excise Duties Order, 1987

PART III VALUE-ADDED TAX

Interpretation (Part III).

38.—In this Part—

"the Principal Act" means the Value- Added Tax Act, 1972 ;

"the Act of 1978" means the Value- Added Tax (Amendment) Act 1978 ;

"the Act of 1985" means the Finance Act, 1985 ;

"the Act of 1986" means the Finance Act, 1986 .

Amendment of section 1.(interpretation) of Principle Act.

39.—(a) Section 1 of the Principal Act is hereby amended by—

(i) the substitution in subsection (1) in the definition of "livestock" of ", goats, pigs and deer" for "and pigs", and

(ii) the insertion in subsection (2) after paragraph (b) of the following:

"and

( c ) money, which, in relation to money received by a person from another person, has been deducted in accordance with the provisions of—

(i) Chapter III of Part I of the Finance Act, 1987, or

(ii) section 17 of the Finance Act, 1970 ,

and has thereby ceased to be due to the first-mentioned person by the other person,".

( b ) The Imposition of Duties (No. 283) (Value- Added Tax) Order, 1986 ( S.I. No. 412 of 1986 ), is hereby revoked.

Amendment of section 11 (rates of tax) of Principle Act.

40.—Section 11 of the Principal Act is hereby amended in subsection (1) (inserted by the Act of 1985) by the substitution in) paragraph (d) of "1.7 per cent ." for "2.4 per cent." (inserted by the Act of 1986).

Amendment of section 12 (deduction for tax borne or paid) of Principle Act.

41.—Section 12 of the Principal Act is hereby amended—

( a ) by the substitution of the following subsection for subsection (1) (inserted by the Act of 1978):

"(1) ( a ) In computing the amount of tax payable by him in respect of a taxable period, a taxable person may, insofar as the goods and services are used by him for the purposes of his taxable supplies or of any of the qualifying activities, deduct—

(i) the tax charged to him during the period by other taxable persons by means of invoices, prepared in the manner prescribed by regulations, in respect of supplies of goods or services to him,

(ii) in respect of goods imported by him in the period, the tax paid by him or deferred as established from the relevant customs documents kept by him in accordance with section 16 (3),

(iii) the tax chargeable during the period in respect of goods treated as supplied by him in accordance with section 3 (1) (e),

(iv) the tax chargeable during the period in respect of services treated as supplied by him for consideration in the course or furtherance of his business in accordance with section 5 (3) (d),

(v) the tax chargeable during the period, being tax for which he is liable by virtue of section 5 (3A), in respect of services received by him,

(vi) if so provided by regulations and subject to and in accordance with any such regulations, the amount of tax, as defined, included in the consideration payable for specified second-hand goods or categories of second-hand goods acquired, in circumstances other than those described in the proviso to section 10 (2), for resale from a person who is not a taxable person or from a taxable person where the goods were used by the said taxable person for the purposes of a business carried on by him, but in relation to the acquisition or application of which he had borne tax and the goods were of such a kind or were used in such circumstances that no part of the said tax was deductible under this section,

(vii) the tax chargeable during the period, being tax for which he is liable by virtue of section 8(2), in respect of services received by him, and

(viii) tax charged to him during the period by means of invoices prepared in the manner prescribed by regulations and issued to him in accordance with section 12A.

( b ) In paragraph (a) 'qualifying activities' means—

(i) transport outside the State of passengers and their accompanying baggage,

(ii) services specified in paragraph (i), (ix) (b), (c) or (d), or (xi), of the First Schedule, supplied—

(I) outside the Community, or

(II) directly in connection with the export of goods to a place outside the Community, and

(iii) supplies of goods or services outside the State which would be taxable supplies if made in the State.",

( b ) in subsection (3) (a) (inserted by the Act of 1978) by—

(i) the substitution for "in subsection (1), a deduction of tax under that subsection" of "in this section, a deduction of tax under this section",

(ii) the insertion, after subparagraph (iii), of "or", and

(iii) the deletion of all of that part of the said subsection (3)( a ) which follows subparagraph (iv),

and the said subsection (3)( a ), as so amended, is set out in the Table to this paragraph,

TABLE

(3) ( a ) Notwithstanding anything in this section, a deduction of tax under this section shall not be made if, and to the extent that, the tax relates to—

(i) the provision of food or drink, or accommodation or other personal services, for the taxable person, his agents or his employees, except to the extent, if any, that such provision constitutes a supply of services in respect of which he is accountable for tax,

(ii) entertainment expenses incurred by the taxable person, his agents or his employees,

(iii) the acquisition (including hiring) of motor vehicles otherwise than as stock-in-trade or for the purposes of a business which consists in whole or part of the hiring of motor vehicles or for use, in a driving school business, for giving driving instruction, or

(iv) the purchase of petrol otherwise than as stock-in-trade.,

and

( c ) by the substitution of the following subsection for subsection

"(4) Where goods or services (not being goods or services on the acquisition of which a deduction of tax shall not, in accordance with subsection (3), be made) are used by a taxable person for the purposes of supplies or activities in relation to which tax is deductible in accordance with this section and also for the purposes of other supplies or activities, such proportion only of tax shall be deductible as is attributable to those first mentioned supplies or activities and the said proportion shall be determined in accordance with regulations.".

Amendment of section 12A (special provisions for tax invoiced by flat-rate farmers) of Principal Act.

42.—Section 12A (inserted by the Act of 1978) of the Principal Act is hereby amended by the substitution in subsection (1) of "1.7 per cent." for "2.4 per cent." (inserted by the Act of 1986).

Amendment of section 13 (remission of tax on goods exported. etc.) of Principal Act.

43.—Section 13 (inserted by the Act of 1978) of the Principal Act is hereby amended by the insertion in subsection (3) ( c ) after-within the State", where that secondly occurs, of "or in respect of means of transport for hiring out for utilisation within the State".

Amendment of section 32 (regulations) of Principal Act.

44.—Section 32 of the Principal Act is hereby amended by the insertion in subsection (2A) (inserted by the Act of 1978) after "section 5 (7),", of "subsection 1 (a)(vi) of section 12,".

Amendment of First Schedule to Principal Act.

45.—The First Schedule (inserted by the Act of 1978) to the Principal Act is hereby amended—

( a ) by the substitution of the following paragraph for paragraph (i):

"(i) Financial services consisting of—

( a ) the issue, transfer or receipt of, or any dealing in, stocks, shares, debentures and other securities, other than documents establishing title to goods,

( b ) the arranging for, or the underwriting of, an issue specified in subparagraph ( a ),

( c ) the operation of any current, deposit or savings account,

( d ) the issue, transfer or receipt of, or any dealing in, currency, bank notes and metal coins, in use as legal tender in any country, excluding such bank notes and coins when supplied as investment goods or as collectors' pieces,

( e ) lending money or affording credit otherwise than by means of hire-purchase or credit-sale transactions,

( f ) the granting of, or any dealing in, credit guarantees or any other security for money and the management of credit guarantees by the person who granted the credit,

( g ) the management of a unit trust scheme which is—

(I) registered under the Unit Trusts Act, 1972 ,

(II) administered by the holder of an authorisation granted pursuant to the European Communities (Life Assurance) Regulations ( S.I. No. 57 of 1984 ), or by a person who is deemed, pursuant to Article 6 of those Regulations, to be such a holder, the criteria in relation to which are the criteria specified, in relation to an arrangement administered by the holder of a licence under the Insurance Act, 1936 , in section 7 (4) of the Unit Trusts Act, 1972 ,

(III) established solely for the purposes of superannuation fund schemes or charities, or

(IV) determined by the Minister for Finance to be a unit trust scheme to which the provisions of this subparagraph apply;

( h ) services supplied to a person under arrangements which provide for the reimbursement of the person in respect of the supply by him of goods or services in accordance with a credit card, charge card or similar card scheme;",

( b ) in paragraph (ix) by—

(i) the deletion in subparagraph (a) of "and",

(ii) the substitution of the following subparagraphs for subparagraphs (c), ( d ) and (e):

"( c ) insurance services, and

( d ) services specified in paragraph (i),",

and

(iii) the insertion after subparagraph (d)(inserted by this Act) of the following:

"excluding management and safekeeping services in regard to the services specified in paragraph (i) ( a ), not being services specified in paragraph (i) ( g );",

and the said paragraph, as so amended, is set out in the Table to this paragraph,

TABLE

(ix) agency services in regard to—

( a ) the arrangement of passenger transport or accommodation for persons,

( b ) the collection of insurance premiums,

( c ) insurance services, and

( d ) services specified in paragraph (i),

excluding management and safekeeping services in regard to the services specified in paragraph (i) ( a ), not being services specified in paragraph (i) ( g );,

( c ) by the deletion in paragraph (xi) of "banking and", and the said paragraph, as so amended, is set out in the Table to this paragraph,

TABLE

(xi) insurance services;,

and

( d ) by the deletion of paragraphs (xia) (inserted by the Value-Added Tax (Exempted Activities) (No. 1) Order, 1985 ( S.I. No. 430 of 1985 )) and (xii).

Amendment of Second Schedule to Principal Act.

46.—The Second Schedule (inserted by the Finance Act, 1976 ) to the Principal Act is hereby amended by the deletion in subparagraph (d) (I) of paragraph (xii) (inserted by the Act of 1985) of "drained,".

Amendment of Sixth Schedule to Principal Act.

47.—The Sixth Schedule (inserted by the Act of 1985) to the Principal Act is hereby amended by the insertion—

( a ) after paragraph (xif) (inserted by the Act of 1986) of the following paragraph:

"(xig) tour guide services;"

and

( b ) after paragraph (xiic) (inserted by the Act of 1986) of the following paragraphs:

"(xiii) the supply to a person of photographic prints (other than goods produced by means of a photocopying process), slides or negatives, which have been produced from goods provided by that person;

(xiiia) goods being—

( a ) photographic prints (other than goods produced by means of a photocopying process), mounted or unmounted, but unframed,

( b ) slides and negatives, and

( c ) cinematographic and video film,

which record particular persons, objects or events, supplied under an agreement to photograph those persons, objects or events;

(xiiib) the supply by a photographer of—

( a ) negatives which have been produced from film exposed for the purposes of his business, and

( b ) film which has been exposed for the purposes of his business;

(xiiic) photographic prints produced by means of a vending machine which incorporates a camera and developing and printing equipment;

(xiiid) services consisting of—

( a ) the editing of photographic, cinematographic and video film, and

( b ) microfilming;

(xiiie) agency services in regard to a supply specified in paragraph (xiii);

(xiiif) services consisting of the acceptance for disposal of waste material;

(xiiig) instruction in the driving of mechanically propelled road vehicles, not being education, training or retraining of the kinds specified in paragraph (ii) of the First Schedule;

(xiiih) admissions to exhibitions, of the kind normally held in museums and art galleries, of objects of historical, cultural, artistic or scientific interest;".

PART IV STAMP DUTIES

Levy on banks.

48.—(1) In this section—

"assessable amount" means the amount arrived at by dividing the specified amount by twelve and deducting £10,000,000 from the quotient;

"bank" means a person who, on the 1st day of September, 1986, was the holder of a licence granted under section 9 of the Central Bank Act, 1971 ;

"relevant sum", in relation to a return, means a sum shown in the return other than a sum shown in respect of foreign currency;

"returns", in relation to a bank, means the returns, entitled "MONTHLY RETURN OF ALL LICENSED BANKS: RESIDENT BRANCHES", furnished to the Central Bank of Ireland by the bank in respect of the assets and liabilities of the bank as on the 15th day of January, 1986, the 19th day of February, 1986, the 31st day of March, 1986, the 16th day of April, 1986, the 21st day of May, 1986, the 30th day of June, 1986, the 16th day of July, 1986, the 20th day of August, 1986, the 30th day of September, 1986, the 15th day of October, 1986, the 19th day of November, 1986, and the 31st day of December, 1986;

"specified amount", in relation to a bank, means the amount obtained by deducting the aggregate amount of the relevant sums shown in respect of Item 302.2 in supplement 1 of the returns of the bank from the aggregate amount of the relevant sums shown in the returns in respect of Government deposits and Non-Government deposits and shown as liabilities of the bank in such returns.

(2) A bank shall, not later than the 16th day of September, 1987, deliver to the Revenue Commissioners a statement in writing showing the assessable amount for that bank, the specified amount for that bank and the sums referred to in the definition of "specified amount" in subsection (1) by reference to which that specified amount was calculated.

(3) There shall be charged on every statement delivered pursuant to subsection (2) a stamp duty of an amount equal to the sum of the following:

( a ) 0.3 per cent. of that part of the assessable amount shown therein that does not exceed £100,000,000, and

( b ) 0.305 per cent. of that part of the assessable amount shown therein that exceeds £100,000,000:

Provided that in the case where the assessable amount shown in the statement does not exceed £100,000,000 stamp duty of an amount equal to 0.3 per cent. of the assessable amount shown therein shall be charged.

(4) The duty charged by subsection (3) upon a statement delivered by a bank pursuant to subsection (2) shall be paid by the bank upon delivery of the statement.

(5) There shall be furnished to the Revenue Commissioners by a bank such particulars as the Revenue Commissioners may deem necessary in relation to any statement required by this section to be delivered by the bank.

(6) In the case of failure by a bank to deliver any statement required by subsection (2) within the time provided for in that subsection or of failure to pay the duty chargeable on any such statement on the delivery thereof, the bank shall, from the date of the passing of this Act until the day on which the duty is paid, be liable to pay, by way of penalty, in addition to the duty, interest thereon at the rate of 15 per cent. per annum and also from the 16th day of September, 1987, by way of further penalty, a sum equal to 1 per cent. of the duty for each day the duty remains unpaid and each penalty shall be recoverable in the same manner as if the penalty were part of the duty.

(7) The delivery of any statement required by subsection (2) may be enforced by the Revenue Commissioners under section 47 of the Succession Duty Act, 1853, in all respects as if such statement were such account as is mentioned in that section and the failure to deliver such statement were such default as is mentioned in that section.

(8) The stamp duty charged by this section shall not be allowed as a deduction for the purposes of the computation of any tax or duty under the care and management of the Revenue Commissioners payable by the bank.

Amendment of section 92 (levy on certain premiums o insurance) of Finance Act, 1982 .

49.—(1) Section 92 of the Finance Act, 1982 , is hereby amended f by the substitution in subsection (8) (inserted by the Finance Act, 1984 ) of "three per cent." for "one and two-thirds per cent.".

(2) The Imposition of Duties (No. 286) (Levy on Certain Premiums of Insurance) Order, 1987 ( S.I. No. 88 of 1987 ), is hereby revoked.

PART V CAPITAL ACQUISITIONS TAX

Amendment of section 54 (provisions relating to charities, etc.) of Capital Acquisitions Tax Act, 1976 .

50.—(1) Section 54 of the Capital Acquisitions Tax Act, 1976 , is hereby amended by the substitution of the following subsection for subsection (2):

"(2) A gift or an inheritance which is taken for public or charitable purposes shall be exempt from tax, and shall not be taken into account in computing tax, to the extent that the Commissioners are satisfied that it has been, or will be, applied to purposes which, in accordance with the law of the State, are public or charitable.".

(2) This section shall apply where the date of the gift or the date of the inheritance is on or after the date of the passing of this Act.

PART VI MISCELLANEOUS

Capital Services Redemption Account.

51.—(1) In this section—

"the principal section" means section 22 of the Finance Act, 1950 ;

"the 1986 amending section" means section 111 of the Finance Act, 1986 ;

"the thirty-seventh additional annuity" means the sum charged on the Central Fund under subsection (4);

"the Minister", "the Account" and "capital services" have the same meanings respectively as they have in the principal section.

(2) In relation to the twenty-nine successive financial years commencing with the financial year ending on the 31st day of December, 1987, subsection (4) of the 1986 amending section shall have effect with the substitution of "£42,934,622" for "£41,472,176".

(3) Subsection (6) of the 1986 amending section shall have effect with the substitution of "£32,503,814" for "£31,876,450".

(4) A sum of £45,510,049 to redeem borrowings, and interest thereon, in respect of capital services shall be charged annually on the Central Fund or the growing produce thereof in the thirty successive financial years commencing with the financial year ending on the 31st day of December, 1987.

(5) The thirty-seventh additional annuity shall be paid into the Account in such manner and at such times in the relevant financial year as the Minister may determine.

(6) Any amount of the thirty-seventh additional annuity, not exceeding £34,980,050 in any financial year, may be applied towards defraying the interest on the public debt.

(7) The balance of the thirty-seventh additional annuity shall be applied in any one or more of the ways specified in subsection (6) of the principal section.

Amendment of section 162 (Collector General) of Income Tax Act, 1967 .

52.— Section 162 of the Income Tax Act, 1967 , is hereby amended by the substitution, in subsection (3), of the following paragraphs for paragraphs (a) and (b):

"( a ) The Revenue Commissioners may nominate persons to exercise on behalf of the Collector-General and at his direction any or all of the powers and functions conferred upon him by any of the provisions of the Tax Acts.

( b ) Those powers and functions, as well as being exercisable by the Collector-General, shall also be exercisable on his behalf and at his direction by persons nominated under this subsection.".

Amendment of section 21 (institution of proceedings for fines, etc.) of Inland Revenue Regulation Act, 1890.

53.—Section 21 of the Inland Revenue Regulation Act, 1890, is hereby amended by the substitution of the following subsection for subsection (1):

"(1) It shall not be lawful to commence proceedings against any person for the recovery of any fine, penalty, or forfeiture under any Act relating to Inland Revenue, or for the condemnation of any goods seized as forfeited under any such Act, except in the name of an officer or in the name of the Attorney General or in the name of the Director of Public Prosecutions.".

Care and management of taxes and duties.

54.—All taxes and duties imposed by this Act are hereby placed under the care and management of the Revenue Commissioners.

Short title, construction and commencement.

55.—(1) This Act may be cited as the Finance Act, 1987 .

(2) Part I (so far as relating to income tax) shall be construed together with the Income Tax Acts and (so far as relating to corporation tax) shall be construed together with the Corporation Tax Acts.

(3) Part II (so far as relating to customs) shall be construed together with the Customs Acts and (so far as relating to duties of excise) shall be construed together with the statutes which relate to the duties of excise and to the management of those duties.

(4) Part III shall be construed together with the Value-Added Tax Acts, 1972 to 1986, and may be cited together therewith as the Value-Added Tax Acts, 1972 to 1987.

(5) Part IV shall be construed together with the Stamp Act, 1891, and the enactments amending or extending that Act.

(6) Part V shall be construed together with the Capital Acquisitions Tax Act, 1976 , and the enactments amending or extending that Act.

(7) Part I shall, save as is otherwise expressly provided therein, be deemed to have come into force and shall take effect as on and from the 6th day of April, 1987.

(8) In Part III , sections 40 and 42 shall be deemed to have come into force and shall take effect as on and from the 1st day of May, 1987, section 39 ( a ) (ii) shall be deemed to have come into force and shall take effect as on and from the 6th day of June, 1987, sections 46 and 47 shall be deemed to have come into force and shall take effect as on and from the 1st day of July, 1987, and sections 41 and 45 shall come into force on the 1st day of November, 1987.

(9) Any reference in this Act to any other enactment shall, except so far as the context otherwise requires, be construed as a reference to that enactment as amended by or under any other enactment including this Act.

(10) In this Act, a reference to a Part, section or Schedule is to a Part or section of, or Schedule to, this Act, unless it is indicated that reference to some other enactment is intended.

(11) In this Act, a reference to a subsection, paragraph or subparagraph is to the subsection, paragraph or subparagraph of the provision (including a Schedule) in which the reference occurs, unless it is indicated that reference to some other provision is intended.

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Irish Legislation

Finance Act, 1987