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TAXES CONSOLIDATION ACT, 1997
Payments in Respect of Professional Services by Certain Persons and Payments to Subcontractors in Certain Industries
Payments in respect of professional services by certain persons
Interpretation ( Chapter 1 ).
[FA87 s13; FA88 s8(a)(i) and (ii); FA92 s10]
520. —(1) In this Chapter—
“accountable person” has the meaning assigned to it by section 521 ;
“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;
“authorised insurer” has the same meaning as in section 470 ;
“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 that person for the purposes of Case I or II of Schedule D, the period on the profits or gains of which income tax for that year is to be finally computed for the purposes of Case I or II of Schedule D, and—
(i) where 2 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, the interval shall be deemed to be part of the second basis period, and
(iii) the reference in subparagraph (i) to the overlapping of 2 periods shall be construed as including a reference to the coincidence of 2 periods or to the inclusion of one period in another, and the reference to the period common to both shall be construed accordingly,
(b) in any other case, the year of assessment;
“contract of insurance” means a contract between an authorised insurer and a subscriber in respect of such insurance as is referred to in the definition of “relevant contract” in section 470 (1);
“income tax month” means a month beginning on the 6th day of any of the months of April to March in any year;
“member”, in relation to a contract of insurance, means a person who is named in the relevant policy of insurance and who has been accepted for insurance by an authorised insurer;
“practitioner” has the same meaning as in section 469 ;
“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 Foras Áiseanna Saothair;
“relevant medical expenses” means expenses incurred in respect of professional services provided by a practitioner, being expenses that are or may become the subject of a claim for their reimbursement or discharge in whole or in part under a contract of insurance but not including any such expenses that—
(a) under the terms of the contract of insurance may (except in the case of certain expenses that in the opinion of the authorised insurer concerned are unusually large) be the subject of a claim for their discharge or reimbursement only—
(i) after the expiry of a stated period of 12 months in which the expenses are incurred, and
(ii) to the extent that the aggregate of the expenses and any other expenses incurred in that period exceeds a stated amount,
(b) are incurred in respect of professional services provided by a practitioner outside the State;
“relevant payment” means a payment made by—
(a) an accountable person in respect of professional services whether or not such services are provided to the accountable person making the payment, or
(b) an authorised insurer to a practitioner in accordance with section 522 , or otherwise, in the discharge of a claim in respect of relevant medical expenses under a contract of insurance,
(i) emoluments within the scope of Chapter 4 of Part 42 to which that Chapter applies, and
(ii) payments under a relevant contract (within the meaning of section 530 ) from which tax has been deducted in accordance with subsection (1) of section 531 , or would have been so deducted but for subsection (12) of that section;
“specified person”, in relation to a relevant payment, means the person to whom that payment is made;
“subscriber”, in relation to a contract of insurance, means a person (other than an authorised insurer) who is a party to the contract and in whose name the relevant policy of insurance is registered.
(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 from that payment, and
(b) in relation to a specified person, appropriate tax referable to—
(i) an accounting period, or
(ii) 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 that period and where there is more than one such relevant payment in that period the aggregate of the appropriate tax deducted from such payments.
[FA87 s14; FA92 s11(1)]
521. —(1) In this Chapter, “accountable person” means, subject to subsection (2), a person specified in Schedule 13 .
(2) Where any of the persons specified in Schedule 13 is a body corporate, “accountable person” includes any subsidiary of that body corporate where such subsidiary is resident in the State and, for the purposes of this subsection, “subsidiary” has the meaning assigned to it by section 155 of the Companies Act, 1963 .
(3) For the purposes of this Chapter, the Minister for Finance may by regulations extend or restrict the meaning of “accountable person” by adding or deleting one or more persons to or from, as the case may be, the list of persons specified in Schedule 13 .
(4) Where regulations are proposed to be made under subsection (3), a draft of the regulations shall be laid before Dáil Éireann and the regulations shall not be made until a resolution approving of the draft has been passed by Dáil Éireann.
Obligation on authorised insurers.
[FA87 s14A; FA88 s 8(c)]
522. —Subject to section 523 (1), where under a contract of insurance a claim is made to an authorised insurer in respect of relevant medical expenses—
(a) the insurer shall discharge the claim by making payment to the extent of the amount of the benefit, if any, due under the contract, to the practitioner who provided the professional services to the subscriber or member concerned to whom the relevant medical expenses relate, and
(b) the subscriber or member, as the case may be, shall be acquitted and discharged of such amount as is represented by the payment as if the subscriber or member had made such payment.
Deduction of tax from relevant payments.
[FA87 s15; FA88 s8(d)]
523. —(1) (a) An accountable person making a relevant payment shall deduct from the amount of the payment the appropriate tax in relation to the payment.
(b) The specified person to whom the amount is payable shall allow such deduction on receipt of the residue of the payment.
(c) The accountable person making the deduction and, if the accountable person is an authorised insurer, any subscriber or member on whose behalf the accountable person is making the relevant payment shall be acquitted and discharged of such amount as is represented by the deduction, as if the amount had actually been paid.
(a) in accordance with section 522 , a relevant payment has been made to a practitioner by an authorised insurer, and
(b) in accordance with subsection (1), the practitioner has allowed a deduction of appropriate tax in respect of that payment and a subscriber or member has been acquitted and discharged of so much money as is represented by the deduction,
the practitioner shall, if any amount in respect of the relevant medical expenses to which the relevant payment relates has been paid by the subscriber or member, pay to the subscriber or member, as the case may be, an amount equal to the amount by which the aggregate of the amount paid by the subscriber or member and the amount of the relevant payment exceeds the relevant medical expenses.
(3) (a) The Minister for Finance may make such regulations as that Minister considers necessary or expedient for the purpose of giving full effect to this Chapter in so far as it relates to authorised insurers and the making of payments under contracts of insurance in respect of relevant medical expenses, and, in particular but without prejudice to the generality of the foregoing, regulations under this subsection may—
(i) specify the circumstances and the manner in which a payment (other than a relevant payment) may be made or claimed in respect of relevant medical expenses, and
(ii) provide for the indemnification of an individual against claims in respect of relevant medical expenses, or any other claims arising out of acts done or omitted to be done by the individual pursuant to this Chapter or regulations made under this subsection in so far as this Chapter relates or those regulations relate to authorised insurers and the making of payments under contracts of insurance in respect of relevant medical expenses.
(b) Every regulation made under this subsection shall be laid before Dáil Éireann as soon as may be after it is made and, if a resolution annulling the regulation is passed by Dáil Éireann within the next 21 days on which Dáil Éireann has sat after the regulation is laid before it, the regulation shall be annulled accordingly, but without prejudice to the validity of anything previously done thereunder.
(4) The provisions of the Tax Acts relating to the computation of profits or gains shall not be affected by the deduction of appropriate tax from relevant payments in accordance with 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.
524. —(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 the specified person's 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, the specified person's value-added tax registration number, and
(b) in the case of a specified person other than a person mentioned in paragraph (a), details of the specified person's country of residence and the specified person's 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 specified 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.
525. —(1) Within 10 days from the end of every income tax month, an accountable person shall remit to the Collector-General all amounts of appropriate tax which the accountable person is liable under this Chapter to deduct from relevant payments made by the accountable person 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-General shall give the accountable person a receipt for the total amount so remitted.
(6) The provisions of the Income Tax Acts relating to the collection and recovery of income tax shall, in so far as they are applicable, apply to the collection and recovery of appropriate tax.
Credit for appropriate tax borne.
526. —(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, the specified person may, subject to section 529 , 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 the specified person.
(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, the specified person may, subject to section 529 , claim to have the amount of appropriate tax specified in subsection (4) set against the income tax chargeable for the year of assessment and, where such appropriate tax exceeds such income tax, to have the excess refunded to the specified person.
(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 the specified person by an accountable person in accordance with section 524 (2).
(4) The amount of the appropriate tax to be set against corporation tax for an accounting period or against 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 this Chapter.
Interim refunds of appropriate tax.
527. —(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 or she 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 those requirements as modified by subsection (4)(a), make such refund as is specified in that subsection.
(2) The requirements of this subsection are—
(a) that 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,
(b) that the amount of tax which was payable for that accounting period or year of assessment corresponding to that basis period has been paid (whether by credit for appropriate tax or otherwise), and
(c) that the specified person shall, in respect of each relevant payment included in the claim, furnish to the inspector the form given to the specified person by an accountable person in accordance with section 524 (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 subsection (2)(c) (and not already repaid under the provisions of this section) over the amount of tax referred to in subsection (2)(b) less the amount which the specified person is liable to pay or remit—
(a) under the Value-Added Tax Act, 1972, and the regulations made under that Act,
(b) under Chapter 4 of Part 42 and the regulations made under that Chapter, and
(c) in respect of employment contributions under the Social Welfare (Consolidation) Act, 1993 , and the regulations made under that Act.
(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, paragraphs (a) and (b) of subsection (2) shall not apply and the inspector shall, in accordance with 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 trade or profession.
(b) For the purposes of determining the amount of the 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—
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 those 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 or her knowledge and belief and in accordance with the information available to him or her, and
(ii) the amount of appropriate tax deducted from the relevant payments in respect of which forms have been furnished in accordance with subsection (2)(c) after deducting from that amount 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) 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 they so waive such a condition or conditions, they shall determine, having regard to all the circumstances and taking into account the objects and intentions of subsections (1) to (4), 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 the specified person which are taken into account in computing the profits or gains of the specified person's trade or profession for that period.
Apportionment of credits or interim refunds of appropriate tax.
528. —Where the form referred to in either section 526 (3) or 527 (2)(c) relates to 2 or more specified persons, any necessary apportionment shall be made for the purposes of giving effect to sections 526 and 527 .
Limitation on credits or interim refunds of appropriate tax.
529. —No amount of appropriate tax shall be set off or refunded more than once under this Chapter, and any amount of appropriate tax refunded in accordance with section 527 shall not be available for set-off under section 526 .