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TAXES CONSOLIDATION ACT, 1997
Provisions where companies cease to be resident in the State
Deemed disposal of assets.
627. —(1) (a) In this section and in section 628 —
“designated area”, “exploration or exploitation activities” and “exploration or exploitation rights” have the same meanings respectively as in section 13 ;
“exploration or exploitation assets” means assets used or intended for use in connection with exploration or exploitation activities carried on in the State or in a designated area;
“market value” shall be construed in accordance with section 548 ;
“the new assets” and “the old assets” have the meanings respectively assigned to them by section 597 .
(b) For the purposes of this section and section 628 , a company shall not be regarded as ceasing to be resident in the State by reason only that it ceases to exist.
(2) (a) In this subsection—
“control” shall be construed in accordance with subsections (2) to (6) of section 432 as if in subsection (6) of that section for “5 or fewer participators” there were substituted “persons resident in a relevant territory”;
“excluded company” means a company of which not less than 90 per cent of its issued share capital is held by a foreign company or foreign companies, or by a person or persons directly or indirectly controlled by a foreign company or foreign companies;
“foreign company” means a company which—
(i) is not resident in the State,
(ii) is under the control of a person or persons resident in a relevant territory, and
(iii) is not under the control of a person or persons resident in the State;
“relevant territory” means—
(i) the United States of America, or
(ii) a territory with the government of which arrangements having the force of law by virtue of section 826 have been made.
(b) Subject to paragraph (c), this section and section 628 shall apply to a company (in this section referred to as a “relevant company”) if at any time (in this section and in section 628 referred to as “the relevant time”) on or after the 21st day of April, 1997, the company ceases to be resident in the State.
(c) This section and section 628 shall not apply to a company which is an excluded company.
(3) A relevant company shall be deemed for the purposes of the Capital Gains Tax Acts—
(a) to have disposed of all its assets, other than assets excepted from this subsection by subsection (5), immediately before the relevant time, and
(b) to have immediately reacquired them,
at the market value of the assets at that time.
(4) Section 597 shall not apply where a relevant company—
(a) has disposed of the old assets, or of its interest in those assets, before the relevant time, and
(b) acquires the new assets, or its interest in those assets, after the relevant time,
unless the new assets are excepted from this subsection by subsection (5).
(5) Where at any time after the relevant time a relevant company carries on a trade in the State through a branch or agency—
(a) any assets which, immediately after the relevant time, are situated in the State and are used in or for the purposes of the trade, or are used or held for the purposes of the branch or agency, shall be excepted from subsection (3), and
(b) any new assets which, after that time, are so situated and are so used or so held shall be excepted from subsection (4),
and references in this subsection to assets situated in the State include references to exploration or exploitation assets and to exploration or exploitation rights.
Postponement of charge on deemed disposal under section 627 .
628. —(1) (a) In this section—
“deemed disposal” means a disposal which by virtue of section 627 (3) is deemed to have been made;
“foreign assets” of a company means any assets of the company which immediately after the relevant time are situated outside the State and are used in or for the purposes of a trade carried on by the company outside the State.
(b) For the purposes of this section, a company shall be a 75 per cent subsidiary of another company if and so long as not less than 75 per cent of its ordinary share capital (within the meaning of section 2 ) is owned directly by that other company.
(a) immediately after the relevant time a company (in this section referred to as “the company”) to which this section applies by virtue of section 627 is a 75 per cent subsidiary of another company (in this section referred to as “the principal company”) which is resident in the State, and
(b) the principal company and the company jointly so elect by notice in writing given to the inspector within 2 years after the relevant time,
the Capital Gains Tax Acts shall apply subject to subsections (3) to (6).
(3) Any allowable losses accruing to the company on a deemed disposal of foreign assets shall be set off against the chargeable gains so accruing and—
(a) that deemed disposal shall be treated as giving rise to a single chargeable gain equal to the aggregate of those gains after deducting the aggregate of those losses, and
(b) the whole of that single chargeable gain shall be treated as not accruing to the company on that disposal but an equivalent amount (in this section referred to as “the postponed gain”) shall be taken into account in accordance with subsections (4) and (5).
(4) (a) In this subsection, “the appropriate proportion” means the proportion which the chargeable gain taken into account in determining the postponed gain in respect of the part of the relevant assets disposed of bears to the aggregate of the chargeable gains so taken into account in respect of the relevant assets held immediately before the time of the disposal.
(b) Where at any time within 10 years after the relevant time the company disposes of any assets (in this subsection referred to as “relevant assets”) the chargeable gains on which were taken into account in determining the postponed gain, there shall be deemed to accrue to the principal company as a chargeable gain at that time the whole or the appropriate proportion of the postponed gain in so far as not already taken into account under this subsection or subsection (5).
(5) Where at any time within 10 years after the relevant time—
(a) the company ceases to be a 75 per cent subsidiary of the principal company, or
(b) the principal company ceases to be resident in the State,
there shall be deemed to accrue to the principal company as a chargeable gain—
(i) where paragraph (a) applies, at that time, and
(ii) where paragraph (b) applies, immediately before that time,
the whole of the postponed gain in so far as not already taken into account under this subsection or subsection (4).
(6) Where at any time—
(a) the company has allowable losses which have not been allowed as a deduction from chargeable gains, and
(b) a chargeable gain accrues to the principal company under subsection (4) or (5),
then, if and to the extent that the principal company and the company jointly so elect by notice in writing given to the inspector within 2 years after that time, those losses shall be allowed as a deduction from that gain.
Tax on non-resident company recoverable from another member of group or from controlling director.
629. —(1) In this section—
“chargeable period” means a year of assessment or an accounting period, as the case may be;
“controlling director”, in relation to a company, means a director of the company who has control of the company (construing control in accordance with section 432 );
“director”, in relation to a company, has the same meaning as in section 116 , and includes any person within section 433 (4);
“group” has the meaning which would be given by section 616 if in that section references to residence in the State were omitted and for references to “75 per cent subsidiaries” there were substituted references to “51 per cent subsidiaries”, and references to a company being a member of a group shall be construed accordingly;
“specified period”, in relation to a chargeable period, means the period beginning with the specified return date for the chargeable period (within the meaning of section 950 ) and ending 3 years after the time when a return under section 951 for the chargeable period is delivered to the appropriate inspector (within the meaning of section 950 );
“tax” means corporation tax or capital gains tax, as the case may be.
(2) This section shall apply at any time on or after the 21st day of April, 1997, where tax payable (being tax which but for section 627 or 628 would not be payable) by a company (in this section referred to as “the taxpayer company”) for a chargeable period (in this section referred to as “the chargeable period concerned”) is not paid within 6 months after the date on or before which the tax is due and payable.
(3) The Revenue Commissioners may, at any time before the end of the specified period in relation to the chargeable period concerned, serve on any person to whom subsection (4) applies a notice—
(a) stating the amount which remains unpaid of the tax payable by the taxpayer company for the chargeable period concerned and the date on or before which the tax became due and payable, and
(b) requiring that person to pay that amount within 30 days of the service of the notice.
(4) (a) This subsection shall apply to any person, being—
(i) a company which is, or during the period of 12 months ending with the time when the gain accrued was, a member of the same group as the taxpayer company, and
(ii) a person who is, or during that period was, a controlling director of the taxpayer company or of a company which has, or within that period had, control over the taxpayer company.
(b) This subsection shall apply in any case where the gain accrued before the 21st day of April, 1998, with the substitution in paragraph (a)(i) of “beginning with the 21st day of April, 1997, and” for “of 12 months”.
(5) Any amount which a person is required to pay by a notice under this section may be recovered from the person as if it were tax due by such person, and such person may recover any such amount paid on foot of a notice under this section from the taxpayer company.
(6) A payment in pursuance of a notice under this section shall not be allowed as a deduction in computing any income, profits or losses for any tax purposes.