Chapter 3

Income Tax, Corporation Tax and Capital Gains Tax

19 .— (1) Part 16 of the Principal Act is amended—

(a) in section 488(1)—

(i) in paragraph (d) of the definition of “relevant period” by substituting “one year” for “2 years” in both places where it occurs, and

(ii) in the definition of “unquoted company” by substituting “Irish Enterprise Exchange” for “Developing Companies Market” in each place where it occurs,

(b) in section 489—

(i) by inserting the following after subsection (4B)(inserted by the Finance Act 2004 ):

“(4C) Notwithstanding any other provision of this section, where—

(a) (i) in accordance with section 508 relief is due in respect of an amount subscribed as nominee for a qualifying individual by the managers of a designated fund,

(ii) the amount so subscribed was subscribed to the designated fund in the period beginning on 1 January 2007 and ending on 31 January 2007, and

(iii) the eligible shares in respect of which the amount is subscribed by the managers of the designated fund are issued on or before 31 December 2007,

or

(b) eligible shares are issued by a qualifying company to a qualifying individual in the period beginning on 1 January 2007 and ending on 31 January 2007,

then the qualifying individual may elect, by notice in writing to the inspector, to have the relief due given as a deduction from his or her total income for the year of assessment 2006 instead of (as provided for in subsection (3)) as a deduction from his or her total income for the year of assessment 2007 and, where an election is so made, the relief to be given for the year of assessment 2006 shall be in accordance with section 490(2) as it applied for that year.”,

and

(ii) in subsection (15) by substituting “31 December 2013” for “31 December 2006”,

(c) in section 490—

(i) in subsection (2) by substituting “€100,000 in the case of a relevant investment, or €150,000 in any other case” for “€31,750”,

(ii) in subsection (3)(a) by substituting “, (4B) or (4C)” for “or (4B)”, and

(iii) in subsections (3)(b) and (4)(b) by substituting “2013” for “2006”,

(d) in section 491—

(i) in subsections (2)(a) and (3)(a)—

(I) by substituting “1 January 2007” for “1 January 2002”, and

(II) by substituting the following for the definition of “A” in the formula:

“A is €2,000,000,”,

(ii) by deleting subsections (2)(b) and (3)(b), and

(iii) in subsection (3A)—

(I) by substituting “12 months” for “6 months”, and

(II) by substituting “€1,500,000” for “€750,000”,

(e) in section 493 in subsection (8)(a)(i) by substituting “€500,000” for “€317,500”,

(f) in section 496—

(i) in subsection (2)(a)—

(I) in subparagraph (ii)(I) by substituting the following for subclause (A):

“(A) the making of a grant towards the employment of persons under section 25 of the Industrial Development Act 1986 (as amended by section 29 of the Industrial Development (Science Foundation Ireland) Act 2003 ), was approved by Forbairt or the Industrial Development Agency (Ireland), or”,

(II) by substituting the following for subparagraph (v):

“(v) in respect of a relevant investment, the rendering of services referred to in subparagraph (ii) in respect of which an industrial development agency or a County Enterprise Board (being a board referred to in the Schedule to the Industrial Development Act 1995 ) has provided a certificate confirming eligibility for the grant of financial support of not less than €2,540 towards the undertaking of a feasibility study by a person approved of by the agency or the County Enterprise Board into the potential commercial viability of the services to be rendered,”,

(III) by deleting “and” at the end of subparagraph (xiii) and inserting “and” at the end of subparagraph (xv), and

(IV) by inserting the following after subparagraph (xv):

“(xvi) recycling activities in relation to waste material, within the meaning of subsection (9A).”,

and deleting “and” where it last occurs in paragraph (a),

and

(ii) after subsection (9) by inserting the following:

“(9A) (a) For the purposes of subsection (2)(a)(xvi) ‘recycling activities in relation to waste material’ means the subjection of the waste material to any process or treatment which results in value-added material that is reusable and, in respect of which activities, a grant or financial assistance has been made available by an industrial development agency.

(b) For the purposes of paragraph (a) ‘waste material’ means any of the following:

(i) packaging;

(ii) construction and demolition waste;

(iii) metals, wood, glass and plastics;

(iv) electrical and electronic equipment;

(v) batteries;

(vi) end of life mechanically propelled vehicles.”,

and

(g) by inserting the following after section 508:

“Reporting of relief.

508A.— (1) A person (being a qualifying company or the managers of a designated fund) shall, when required to do so by notice in writing by the Revenue Commissioners, furnish the Revenue Commissioners within such time as may be specified in the notice (not being less than 30 days) with such information, in relation to the relief provided for in this Part, as the Revenue Commissioners may reasonably require from that person for the purpose of the annual reports required in accordance with section 7.1 of the Community Guidelines on State Aid to Promote Risk Capital Investments in Small and Medium-Sized Enterprises 2 .

(2) Notwithstanding any obligation as to secrecy imposed on them by the Tax Acts or the Official Secrets Act 1963 , the Revenue Commissioners may furnish the information obtained in accordance with subsection (1) to the person submitting the annual reports referred to in that subsection.

(3) The Revenue Commissioners may nominate any of their officers to discharge any function authorised by this section to be discharged by the Revenue Commissioners.

(4) Where any person fails to comply with a requirement to furnish the information in accordance with subsection (1), that person shall be liable to a penalty of €2,000 and, if that failure continues after the period of 30 days referred to in that subsection, a further penalty of €50 for each day on which the failure so continues.”.

(2) (a) Subject to paragraph (b), subsection (1) applies as follows:

(i) as respects paragraphs (a)(i) and (f)(i)(II), in relation to relevant investments made on or after 1 January 2007;

(ii) as respects paragraph (a)(ii), as on and from 12 April 2005;

(iii) as respects paragraphs (b), (c)(ii), (c)(iii), (d)(ii), (f)(i)(III), (f)(ii) and (g), as on and from 1 January 2007;

(iv) as respects paragraphs (c)(i), (d)(i), (d)(iii), (e) and (f)(i)(IV), in relation to eligible shares issued on or after 1 January 2007; and

(v) as respects paragraph (f)(i)(I), as respects subscriptions for eligible shares issued on or after 1 January 2007.

(b) Subsection (1) comes into operation on the making of an order to that effect by the Minister for Finance.

20 .— (1) Part 40 of the Principal Act (as amended by the Finance Act 2005 ) is amended—

(a) in section 934, by substituting the following for subsection (6):

“(6) Where an appeal is determined by the Appeal Commissioners, the inspector or other officer shall, unless either—

(a) the person assessed requires that that person’s appeal shall be reheard under section 942, or

(b) under the Tax Acts a case is required to be stated for the opinion of the High Court,

give effect to the Appeal Commissioners’ determination and thereupon, if the determination is that the assessment is to stand or is to be amended, the assessment or the amended assessment, as the case may be, shall have the same force and effect as if it were an assessment in respect of which no notice of appeal had been given.”,

(b) in section 941, by substituting the following for subsection (9):

“(9) If the amount of the assessment is altered by the order or judgment of the Supreme Court or the High Court, then—

(a) if too much tax has been paid, the amount overpaid shall be refunded with interest in accordance with section 865A, or

(b) if too little tax has been paid, the amount unpaid shall be deemed to be arrears of tax (except in so far as any penalty is incurred on account of arrears) and shall be paid and recovered accordingly.”,

(c) in section 942, by substituting the following for subsection (6):

“(6) Where an appeal is determined by the judge, the inspector or other officer shall, unless under the Tax Acts a case is required to be stated for the opinion of the High Court, give effect to the judge’s determination and thereupon, if the determination is that the assessment is to stand or is to be amended, the assessment or the amended assessment, as the case may be, shall have the same force and effect as if it were an assessment in respect of which no notice of appeal had been given.”,

and

(d) in section 945(2), by inserting “and” at the end of paragraph (h) and by deleting paragraph (i).

(2) Subsection (1) applies in relation to appeals determined by the Appeal Commissioners, or by a judge of the Circuit Court, on or after the date of the passing of this Act.

21 .— Section 373 of the Principal Act is amended in subsection (2)—

(a) by substituting “1 January 2006;” for “1 January 2006.” in paragraph (o)(ii), and

(b) by inserting the following after paragraph (o):

“(p) €24,000, where the expenditure was incurred—

(i) in an accounting period ending on or after 1 January 2007, or

(ii) in a basis period for a year of assessment, where that basis period ends on or after 1 January 2007.”.

22 .— Section 657A of the Principal Act is amended—

(a) in subsection (1) in the definition of “relevant individual” by substituting “the same year of assessment” for “the year of assessment 2005” in the first place it occurs and by substituting “that year of assessment” in the second place it occurs,

(b) by substituting the following for subsection (3):

“(3) Notwithstanding any other provision of the Income Tax Acts apart from subsection (4), where an individual elects in accordance with subsection (2), then the relevant payment or relevant payments shall—

(a) be disregarded as respects the ‘same year of assessment’ referred to in the definition of ‘relevant individual’ in subsection (1), and

(b) instead be treated for the purposes of the Income Tax Acts as arising in equal instalments in the year of assessment that is such same year of assessment and in the 2 immediately succeeding years of assessment.”,

and

(c) by substituting the following for subsection (5):

“(5) An election under subsection (2) by a person to whom this section applies, shall be made by notice in writing on or before 31 October in the year following the ‘same year of assessment’ referred to in the definition of ‘relevant individual’ in subsection (1), and shall be included in the annual statement required to be delivered on or before that date under the Income Tax Acts of the profits or gains from farming for the year of assessment that is such same year of assessment.”.

23 .— Chapter 1 of Part 23 of the Principal Act is amended by inserting the following after section 657A:

“657B.— (1) In this section—

‘ specified individual ’ means an individual who carries on in the year of assessment 2007 or in any subsequent year of assessment the trade of farming in respect of which the individual is within the charge to tax under Case I of Schedule D;

‘ specified payment ’ means a payment to a specified individual under the EU temporary scheme for the restructuring of the sugar industry in the Community, operated by the Department of Agriculture and Food under Article 3(6) first indent, of Council Regulation (EC) No. 320/2006 3 of 20 February 2006, in respect of which the specified individual would, apart from this section, be chargeable to income tax on the profits or gains from farming for the year of assessment 2007 or for any subsequent year of assessment.

(2) A specified individual may elect to have the aggregate of all specified payments made to the individual which would, apart from this section, be chargeable to income tax for a year of assessment treated in accordance with subsections (3) to (6), and each such election shall be made in such form and contain such information as the Revenue Commissioners may require.

(3) Notwithstanding any other provision of the Income Tax Acts apart from subsection (4), where a specified individual elects in accordance with subsection (2), the specified payment or specified payments shall be disregarded as respects the year of assessment referred to in subsection (2) and shall instead be treated for the purposes of the Income Tax Acts as chargeable in equal instalments for the year of assessment so referred to in subsection (2) and for the 5 succeeding years of assessment.

(4) Where a trade of farming is permanently discontinued, tax shall be charged under Case IV of Schedule D for the year of assessment in which such discontinuation takes place in respect of the amount of any specified payment which would, but for such discontinuance, be treated by virtue of subsection (3) as chargeable for a year of assessment or years of assessment ending after such discontinuance.

(5) An election under subsection (2) by an individual to whom this section applies, shall be made by notice in writing on or before 31 October in the year of assessment following the year of assessment referred to in subsection (2).

(6) Subject to subsection (4), an election made under subsection (2) shall not be altered or varied during the period to which it relates.”.

24 .— (1) Chapter 2 of Part 23 of the Principal Act is amended—

(a) in section 666(4) by substituting “31 December 2008” for “31 December 2006” in paragraph (a) and “year 2008” for “year 2006” in paragraph (b),

(b) in section 667A by substituting “31 December 2008” for “31 December 2006” in subsection (6)(b), and

(c) by inserting the following new section after section 667A:

“New arrangements for qualifying farmers.

667B.— (1) In this section ‘ qualifying farmer ’ means an individual who—

(a) in the year 2007 or any subsequent year of assessment first qualifies for grant aid under the scheme of Installation Aid for Young Farmers operated by the Department of Agriculture and Food under Council Regulation (EEC) No. 797/85 of 12 March 1985 4 or that Regulation as may be revised from time to time, or

(b) (i) first becomes chargeable to income tax under Case I of Schedule D in respect of profits or gains from the trade of farming for the year 2007 or any subsequent year of assessment,

(ii) has not attained the age of 35 years at the commencement of the year of assessment referred to in subparagraph (i), and

(iii) at any time in the year of assessment so referred to satisfies the conditions set out in subsection (2) or (3).

(2) The conditions required by this subsection are that the individual, referred to in the definition of ‘qualifying farmer’ in subsection (1), is the holder of a qualification set out in the Table to this section (in this section referred to as the ‘Table’).

(3) The conditions required by this subsection are that the individual, referred to in the definition of ‘qualifying farmer’ in subsection (1), is the holder of a letter of confirmation from Teagasc confirming satisfactory completion of a course of training, approved by Teagasc, for persons who in the opinion of Teagasc are restricted in their learning capacity due to physical, sensory, or intellectual disability or to mental health.

(4) For the purposes of subsection (2) where Teagasc certifies that—

(a) any other qualification corresponds to a qualification set out in the Table, and

(b) that other qualification is deemed by the National Qualifications Authority of Ireland to be at least at a level equivalent to that of the qualification set out in the Table,

then that other qualification will be treated as if it were the qualification set out in the Table.

(5) In the case of a qualifying farmer—

(a) section 666(1) will apply as if ‘100 per cent’ were substituted for ‘25 per cent’, and

(b) paragraph (a) will apply in computing a person’s trading profits for an accounting period in the case of an individual who becomes a qualifying farmer at any time in the period beginning on or after 1 January 2007 and ending on or before 31 December 2008, for the year of assessment in which the individual becomes a qualifying farmer and for each of the 3 immediately succeeding years of assessment.

(6) An individual who, at any time before 31 March 2008, satisfies the conditions referred to in paragraph (b)(iii) of the definition of ‘qualifying farmer’ in section 667A (1) will be deemed to satisfy the conditions referred to in paragraph (b)(iii) of the definition of ‘qualifying farmer’ in subsection (1).

TABLE

1. Qualifications awarded by the Further Education and Training Awards Council:

(a) Level 6 Advanced Certificate in Farming;

(b) Level 6 Advanced Certificate in Agriculture;

(c) Level 6 Advanced Certificate in Dairy Herd Management;

(d) Level 6 Advanced Certificate in Drystock Management;

(e) Level 6 Advanced Certificate in Agricultural Mechanisation;

(f) Level 6 Advanced Certificate in Farm Management;

(g) Level 6 Advanced Certificate in Machinery and Crop Management;

(h) Level 6 Advanced Certificate in Horticulture;

(i) Level 6 Advanced Certificate in Forestry;

(j) Level 6 Advanced Certificate in Stud Management;

(k) Level 6 Advanced Certificate in Horsemanship.

2. Qualifications awarded by the Higher Education and Training Awards Council:

(a) Higher Certificate in Agriculture;

(b) Bachelor of Science in Agriculture;

(c) Higher Certificate in Agricultural Science;

(d) Bachelor of Science in Agricultural Science;

(e) Bachelor of Science (Honours) in Land Management, Agriculture;

(f) Bachelor of Science (Honours) in Land Management, Horticulture;

(g) Bachelor of Science (Honours) in Land Management, Forestry;

(h) Higher Certificate in Engineering in Agricultural Mechanisation;

(i) Bachelor of Science in Rural Enterprise and Agri-Business;

(j) Bachelor of Science in Agriculture and Environmental Management;

(k) Bachelor of Science in Horticulture;

(l) Bachelor of Arts (Honours) in Horticultural Management;

(m) Bachelor of Science in Forestry;

(n) Higher Certificate in Business in Equine Studies;

(o) Bachelor of Science in Equine Studies.

3. Qualifications awarded by other third level institutions:

(a) Bachelor of Agricultural Science — Animal Crop Production awarded by University College Dublin;

(b) Bachelor of Agricultural Science — Animal Science awarded by University College Dublin;

(c) Bachelor of Agricultural Science — Food and Agribusiness Management awarded by University College Dublin;

(d) Bachelor of Agricultural Science — Forestry awarded by University College Dublin;

(e) Bachelor of Agricultural Science — Horticulture, Landscape and Sportsturf Management awarded by University College Dublin;

(f) Bachelor of Veterinary Medicine awarded by University College Dublin;

(g) Bachelor of Science in Equine Science awarded by the University of Limerick;

(h) Diploma in Equine Science awarded by the University of Limerick.”.

(2) Subsection (1) comes into operation on the making of an order to that effect by the Minister for Finance.

25 .— Section 669A of the Principal Act is amended in the definition of “ qualifying expenditure ” by substituting the following for paragraph (b)(ii):

“(ii) the amount of capital expenditure which would have been incurred on the purchase of that milk quota if the price paid were set otherwise than by the Minister for Agriculture and Food for the purposes of a Milk Quota Restructuring Scheme in the area in which the land, with which that milk quota is associated, is situated;”.

26 .— (1) The Principal Act is amended—

(a) in section 381 by inserting the following after subsection (2):

“(2A) Subsection (2) shall cease to have effect as respects losses arising on or after 1 August 2008 and, as respects the chargeable period in which 1 August 2008 occurs, the amount of such losses will be determined by the formula—

A x B

C

where—

A is the total amount of losses arising in the chargeable period,

B is the length, in days, of the period beginning on 1 August 2008 and ending on the last day of the chargeable period in which 1 August 2008 occurs, and

C is the length, in days, of the chargeable period.”,

and

(b) by inserting the following Chapter into Part 23 after Chapter 3:

“Chapter 4

Taxation of stallion profits and gains

Interpretation (Chapter 4).

669G.— In this Chapter—

‘ excess relief ’ has the same meaning as in section 485C;

‘ initial value ’ in relation to a stallion means its market value on—

(a) 1 August 2008, or

(b) the day it is either acquired for, or appropriated to, stud activities, as the case may be,

whichever is later, and any reference to a stallion includes a reference to an interest in a stallion;

‘ market value ’, at any time in relation to a stallion, means the price which the stallion might reasonably be expected to fetch on a sale in the open market and in a case where a person (the ‘purchaser’) acquires the stallion from another person (the ‘vendor’)—

(a) at arm’s length, and

(b) the purchaser and the vendor are not connected persons (within the meaning of section 10),

then the market value is the price paid;

‘ relevant amount ’, in relation to a year of assessment and an individual, means an amount determined by the formula—

A — B

where—

A is the amount of income tax payable by the individual for the year of assessment, and

B is the amount of income tax which would be payable by the individual for the year of assessment if—

(a) the entry at Reference Number 6 of Schedule 25B had not been enacted, and

(b) for the purposes of the entry at Reference Number 1 of Schedule 25B the definition of ‘exempt profits’ in section 140(1) did not include profits or gains which by virtue of section 231 were not charged to tax;

‘ relevant excess relief ’, in relation to a year of assessment and an individual, means an amount determined by the formula—

C — D

where—

C is the amount of excess relief which is carried forward to the next year of assessment and which the individual is entitled to deduct from his or her total income for that year, and

D is the amount of excess relief which would be carried forward to the next year of assessment and which the individual would be entitled to deduct from his or her total income for that year if—

(a) the entry at Reference Number 6 of Schedule 25B had not been enacted, and

(b) for the purposes of the entry at Reference Number 1 of Schedule 25B the definition of ‘exempt profits’ in section 140(1) did not include profits or gains which by virtue of section 231 were not charged to tax;

‘ residual value ’, in relation to a stallion, at any time, means—

(a) an amount equal to the initial value of the stallion, or

(b) if less, the amount by which the initial value of the stallion exceeds—

(i) the amount which has been allowed as a deduction under section 669I for a chargeable period ending before that time, or

(ii) where there is more than one such amount, the aggregate of such amounts.

Charging provisions.

669H.— (1) The profits or gains arising in any chargeable period to the owner or part-owner of a stallion from the sale of services of mares by the stallion or rights to such services shall be chargeable to income tax or corporation tax, as the case may be, in accordance with subsection (2).

(2) (a) In a case in which the owner or part-owner of a stallion carries on in the chargeable period referred to in subsection (1) the trade of farming in respect of which the owner or part-owner is within the charge to tax under Case I of Schedule D, the profits or gains referred to in subsection (1) and any amount chargeable under subsection (3)(c) of section 669I shall be chargeable under that Case of that Schedule as part of that trade.

(b) In a case, other than one referred to in paragraph (a), the profits or gains referred to in subsection (1) and any amount chargeable under subsection (3)(c) of section 669I shall be chargeable under Case IV of Schedule D.

Provisions as to deductions.

669I.— (1) Where any person acquires ownership or part-ownership of a stallion, the profits or gains in relation to which are chargeable in accordance with section 669H(2), then that person, in computing the amount of income to be charged to tax under the Tax Acts for any chargeable period, shall not be entitled, other than in accordance with subsection (2), to any deduction in respect of expenditure incurred on such acquisition.

(2) (a) Where the profits or gains referred to in subsection (1) are chargeable in accordance with section 669H(2)(a), for each of 4 consecutive chargeable periods, the first of which begins with the chargeable period in which—

(i) 1 August 2008 occurs, in a case where the stallion is owned or part-owned on that day, or

(ii) in any other case, the stallion is either acquired for, or appropriated to, stud activities, as the case may be,

the owner or part-owner of the stallion shall, in computing for the purposes of tax the trading income of the trade of farming referred to in that section, be entitled to a deduction under this section equal to 25 per cent of the initial value of the stallion, as if the deduction were a trading expense incurred in the chargeable period.

(b) Subject to section 669K(3), where the profits or gains referred to in subsection (1) are chargeable in accordance with section 669H(2)(b), in determining the amount of income to be charged to tax under Case IV of Schedule D, such income shall be computed in accordance with the provisions applicable to Case I of Schedule D, taking into account this Chapter.

(3) Where, in any chargeable period a stallion to which this Chapter applies is disposed of or dies, then—

(a) no deduction which would otherwise be allowed under subsection (2)(a) or (2)(b), as the case may be, in respect of the initial value of that stallion shall be allowed for that chargeable period or for any subsequent chargeable period,

(b) a deduction of an amount equal to the residual value of the stallion at the time of its disposal or death shall be allowed for that chargeable period as if it were a deduction under subsection (2)(a), and

(c) the owner or part-owner of the stallion shall be chargeable to income tax or corporation tax, as the case may be, on—

(i) the amount received in money or money’s worth, in respect of its disposal or death, or

(ii) in the case of a disposal, if greater, the price which the stallion might reasonably have been expected to fetch at the time of its disposal on a sale, at arm’s length between persons who are not connected (within the meaning of section 10), in the open market.

Credit for tax paid.

669J.— (1) Subject to the provisions of this section, any individual, to whom Chapter 2A of Part 15 applies for any year of assessment, who has made a payment which includes a relevant amount in respect of that year of assessment shall, without prejudice to the payment so made, be treated as having made a payment on account of income tax of an amount equal to the relevant amount.

(2) So much of a payment of tax (referred to in this section as the ‘deemed payment on account of tax’) for a year of assessment by an individual as is treated in accordance with subsection (1) shall, in so far as possible, be set against any liability to income tax of the individual, for the year of assessment following the first-mentioned year of assessment.

(3) To the extent that the deemed payment on account of tax has not been set off in accordance with subsection (2), the balance remaining shall be set off against a liability to income tax for any subsequent year of assessment of the individual who is treated as having made the payment, in the order of being set off against a liability for an earlier period in priority to a liability for a later period.

(4) Only the excess of an overpayment of income tax for any year of assessment over the deemed payment on account of tax to be made for that year of assessment by virtue of this section may be repaid and interest shall not be payable in respect of any part of such overpayment other than the excess.

(5) Where in any year of assessment section 485E applies to an individual, then for the purposes of section 485F the excess relief for the year shall be reduced by an amount equal to the amount of the relevant excess relief.

Miscellaneous (Chapter 4).

669K.— (1) For the purposes of determining the market value of a stallion to which this Chapter applies, the Revenue Commissioners may consult with such person or body of persons as, in their opinion, may be of assistance to them.

(2) Notwithstanding any other provisions of the Tax Acts, trading stock comprising stallions shall be disregarded for all purposes of section 666.

(3) In a case in which in any chargeable period the computation of the amount of income of a person to be charged to tax under Case IV of Schedule D under this Chapter results in a loss, then, notwithstanding section 383, the amount of the loss may not be deducted from or set off against other income charged to tax under Case IV of Schedule D arising in that chargeable period, and any loss, when carried forward to a subsequent chargeable period, may only be deducted from or set off against income to which section 669H(2)(b) applies arising in that subsequent chargeable period.”.

(2) Subsection (1) comes into operation on the making of an order to that effect by the Minister for Finance.

27 .— (1) Schedule 26A to the Principal Act is amended—

(a) in Part 1—

(i) by deleting “in the State” in each place it occurs in paragraphs 3 to 7, and

(ii) by deleting paragraphs 8 to 16, and paragraph 18,

and

(b) in Part 2 by substituting the following for the definition of “approved body” in paragraph 1:

“ ‘ approved body ’ means any body or institution which may be approved of by the Minister for Finance and which—

(a) provides any course one of the conditions of entry to which is related to the results of the Leaving Certificate Examination, a matriculation examination of a recognised university in the State or an equivalent examination held outside the State, or

(b) (i) is established on a permanent basis solely for the advancement of one or more approved subjects,

(ii) contributes to the advancement of that subject or those subjects on a national or regional basis, and

(iii) is prohibited by its constitution from distributing to its members any of its assets or profits;”.

(2) Subsection (1) applies as on and from 1 February 2007.

28 .— (1) Part 9 of the Principal Act is amended―

(a) in section 268―

(i) in subsection (3A)―

(I) by substituting “Subject to subsections (3B) to (3E), in this section” for “In this section”, and

(II) by substituting the following for subparagraph (i) of paragraph (d):

“(i) is leased to a person and, as the case may be, the spouse of that person―

(I) who is or, as the case may be, are not connected (within the meaning of section 10) with the lessor,

(II) who has or have been selected as the occupant or occupants of the house by the registered nursing home, and

(III) either the person or the spouse of that person has been certified by a person, who is registered in the General Register of Medical Practitioners, as requiring such accommodation by reason of old age or infirmity,

or”,

(ii) by substituting the following for subsection (3B):

“(3B) (a) For the purposes of this section ‘house’, in relation to a qualifying residential unit, has the same meaning as in section 372AK.

(b) For the purposes only of the making of allowances and charges under this Part but subject to subsection (3C) and sections 270 and 316 (as amended by the Finance Act 2007), as respects capital expenditure incurred in the period commencing on 25 March 2002 and ending on 30 April 2010, a house in use as a qualifying residential unit shall be deemed to be a building in use for the purposes of a trade referred to in subsection (1)(g).”,

and

(iii) by inserting the following after subsection (3C):

“(3D) Where the relevant interest in relation to capital expenditure incurred on the construction or refurbishment of all qualifying residential units in a development is held by a company (within the meaning of section 4(1)) then subsection (3A) shall apply as if subparagraphs (iv) and (v) of paragraph (c) of that subsection were deleted.

(3E) A house shall not be a qualifying residential unit for the purposes of this section unless―

(a) the following information has been provided to the Health Service Executive, by the person who is entitled to the relevant interest in relation to the capital expenditure incurred on the construction or refurbishment of the house, for onward transmission to the Minister for Health and Children and the Minister for Finance:

(i) the amount of the capital expenditure actually incurred on the construction or refurbishment of the house;

(ii) the number and nature of the investors that are investing in the house;

(iii) the amount to be invested by each investor; and

(iv) the nature of the structures which are being put in place to facilitate the investment in the house,

together with such other information as may be specified by the Minister for Finance, in consultation with the Minister for Health and Children, as being of assistance in evaluating the costs, including but not limited to exchequer costs, and the benefits arising from the operation of tax relief under this Part for qualifying residential units,

(b) the Health Service Executive, in consultation with the Minister for Health and Children, gives a certificate in writing after the house is first leased or, where capital expenditure is incurred on the refurbishment of a house, first leased subsequent to the incurring of that expenditure stating that it is satisfied that―

(i) the house and the development in which it is comprised complies with all the conditions mentioned in paragraphs (a), (b), (c) and (d) of subsection (3A), and

(ii) the information required in accordance with paragraph (a) of this subsection has been provided,

and

(c) an annual report in writing is provided, by the person who is entitled to the relevant interest in relation to the capital expenditure incurred on the construction or refurbishment of the house, to the Health Service Executive, for onward transmission to the Minister for Health and Children and the Minister for Finance, by the end of each year in the 20 year period referred to in section 272(4)(fa) (inserted by the Finance Act 2007), which―

(i) confirms whether the house and the development in which it is comprised continue to comply with all the conditions mentioned in paragraphs (a), (b), (c) and (d) of subsection (3A), and

(ii) provides details of the level of occupation of the house for the previous year including the age of and, as the case may be, the nature of the infirmity of the occupants.”,

(b) in section 270 by inserting the following subsection after subsection (7):

“(8) Where capital expenditure is incurred on or after 1 May 2007 under a contract or agreement which is entered into on or after that date for the construction, refurbishment or development of a qualifying residential unit as is referred to in subsection (4)(i), then―

(a) subsection (4) shall apply as if the reference to ‘31 July 2008’ were a reference to ‘30 April 2010’,

(b) subsection (5) shall apply as if―

(i) the reference to ‘subject to subsections (6) and (7)’ were a reference to ‘subject to subsections (6) to (8)’, and

(ii) the following paragraphs were substituted for paragraphs (a) and (b):

‘(a) in the case of expenditure incurred by a company (within the meaning of section 4(1)) in the period from 1 May 2007 to 30 April 2010, to 75 per cent, and

(b) in the case of expenditure incurred by a person other than a company (within the meaning of section 4(1)) in the period from 1 May 2007 to 30 April 2010, to 50 per cent,’,”,

(c) in section 272(4)―

(i) in paragraph (f), by inserting “subject to paragraph (fa),” before “in relation to”, and

(ii) by inserting the following paragraph after paragraph (f):

“(fa) where subsection (8) of section 270 applies in relation to a qualifying residential unit as is referred to in subsection (4)(i) of that section―

(i) 20 years beginning with the time when the unit was first used, or

(ii) where capital expenditure on the refurbishment of the unit is incurred, 20 years beginning with the time when the unit was first used subsequent to the incurring of that expenditure,”,

(d) in section 274(1)(b)―

(i) in subparagraph (iia), by inserting “subject to subparagraph (iib),” before “in relation to”, and

(ii) by inserting the following subparagraph after subparagraph (iia):

“(iib) where subsection (8) of section 270 applies in relation to a qualifying residential unit as is referred to in subsection (4)(i) of that section―

(I) 20 years after the unit was first used, or

(II) where capital expenditure on the refurbishment of the unit is incurred, 20 years after the unit was first used subsequent to the incurring of that expenditure,”,

and

(e) in section 316(2B)―

(i) by deleting “or” at the end of paragraph (b) and by substituting “31 July 2008, or” for “31 July 2008,” in paragraph (c), and

(ii) by inserting the following paragraph after paragraph (c):

“(d) where subsection (8) of section 270 applies in relation to a qualifying residential unit as is referred to in subsection (4)(i) of that section, the period from 1 May 2007 to 30 April 2010,”.

(2) Subsection (1) of this section applies as respects capital expenditure incurred on or after 1 May 2007 under a contract or agreement for the construction, refurbishment or development of a qualifying residential unit (within the meaning of section 268(3A) of the Principal Act) which is entered into on or after that date.

29 .— (1) The Principal Act is amended—

(a) in Part 10, by inserting the following after Chapter 11:

“Chapter 12

Mid-Shannon Corridor Tourism Infrastructure Investment Scheme

Interpretation, applications for approval and certification.

372AW.— (1) In this Chapter—

‘ accommodation building ’, in relation to a project, means a building or structure or part of a building or structure which consists of accommodation facilities or which is to be used or is suitable for use for the provision of such facilities;

‘ market value ’, in relation to a building or structure, means the price which the unencumbered fee simple of the building or structure would fetch if sold in the open market in such manner and subject to such conditions as might reasonably be calculated to obtain for the vendor the best price for the building or structure, less the part of that price which would be attributable to the acquisition of, or of rights in or over, the land on which the building or structure is constructed;

‘ mid-Shannon corridor ’ means the corridor of land comprising all qualifying mid-Shannon areas;

‘ mid-Shannon Tourism Infrastructure Board ’ means a board consisting of not more than 5 persons selected for the purposes of this Chapter by the Minister in consultation with the Minister for Finance;

‘ Minister ’ means the Minister for Arts, Sport and Tourism;

‘ project ’ means the construction or refurbishment of buildings and structures comprising—

(a) a holiday camp of the type referred to in section 372AX(1)(b), or

(b) one or more qualifying tourism infrastructure facilities,

the site or sites of which is or are wholly within a qualifying mid-Shannon area;

‘ property developer ’ means a person carrying on a trade which consists wholly or mainly of the construction or refurbishment of buildings or structures with a view to their sale;

‘ qualifying mid-Shannon area ’ means any area described in Schedule 8B;

‘ qualifying period ’ means a period of 3 years commencing on the date on which this Chapter comes into effect;

‘ qualifying tourism infrastructure facilities ’ means such class or classes of facilities, comprising of buildings and structures only, as may be approved for the purposes of this Chapter by the Minister, in consultation with the Minister for Finance, and published in the relevant guidelines;

‘ refurbishment ’, in relation to a building or structure, means any work of construction, reconstruction, repair or renewal, including the provision or improvement of water, sewerage or heating facilities, carried out in the course of—

(a) the repair or restoration, or

(b) maintenance in the nature of repair or restoration,

of the building or structure;

‘ relevant guidelines ’ mean guidelines issued in accordance with subsection (3) of this section or any guidelines issued in accordance with that subsection which amend or replace those guidelines.

(2) (a) Notwithstanding sections 372AX and 372AY, but subject to the subsequent provisions of this section and to section 372AZ, no relief from income tax or corporation tax, as the case may be, may be granted by virtue of this Chapter in respect of capital expenditure incurred in the qualifying period on the construction or refurbishment of a building or structure unless the mid-Shannon Tourism Infrastructure Board has—

(i) prior to such expenditure being incurred, but subject to paragraph (b), granted approval in principle in relation to the construction or refurbishment of the building or structure, and

(ii) after the expenditure is incurred, certified in writing that the construction or refurbishment which was carried out is in accordance with the criteria specified in the relevant guidelines, having regard to any relevant conditions and requirements imposed by the Board in the approval granted under subparagraph (i).

(b) Approval in principle shall not be granted in accordance with paragraph (a)(i) unless an application for such approval, in which the information and details as may be required in accordance with subsection (3)(h) are included, is received by the mid-Shannon Tourism Infrastructure Board within a period of one year commencing on the date on which this Chapter comes into effect.

(3) Subject to subsection (4), for the purposes of approval and certification in accordance with subsection (2) and, as the case may be, certification in accordance with section 372AX(1)(d) or 372AY(1)(g) the Minister shall, in consultation with the Minister for Finance, issue guidelines to which the mid-Shannon Tourism Infrastructure Board shall have regard in deciding whether to grant approval in principle or to issue certification in relation to any building or structure and which guidelines may include criteria in relation to all or any one or more of the following:

(a) the nature and extent of the contribution which the project, in which the building or structure is comprised, makes to tourism development in the mid-Shannon corridor or the qualifying mid-Shannon area;

(b) coherence with national tourism strategy;

(c) environmental sensitivity, having particular regard to any area which is—

(i) a European site within the meaning of the European Communities (Natural Habitats) Regulations 1997 (S.I. No. 94 of 1997), or

(ii) a natural heritage area, a nature reserve or a refuge for fauna for the purposes of the Wildlife Acts 1976 and 2000;

(d) the amenities and facilities required to be provided in each type of project;

(e) the nature of and maximum extent to which accommodation buildings (if any) are allowable in each type of project;

(f) specific standards of design and construction in relation to buildings and structures which may qualify for relief under this Chapter;

(g) relevant planning matters, including the need for consistency with the requirements of a development plan or a local area plan within the meaning of those terms in the Planning and Development Act 2000 ;

(h) the details and information required to be provided in an application for approval or certification in accordance with section 372AW(2) and, as the case may be, an application for certification in accordance with section 372AX(1)(d) or 372AY(1)(g); and

(i) matters relating to the provision of information in accordance with sections 372AX(1)(c) and 372AY(1)(f),

together with such other matters as the Minister, in consultation with the Minister for Finance, may consider are required to be included.

(4) (a) Subject to paragraphs (b) and (c), approval and certification in accordance with subsection (2) shall not be granted or issued by the mid-Shannon Tourism Infrastructure Board in relation to capital expenditure incurred in the qualifying period on the construction or refurbishment of one or more than one accommodation building comprised in a project to the extent that such expenditure exceeds (or, where an application for approval is involved, is projected to exceed) an amount (referred to in this subsection as the ‘limit amount’) which is equal to the lesser of—

(i) 50 per cent, or such lower percentage as may be specified (in accordance with subsection (3)(e)) in the relevant guidelines for the type of project involved, of the total amount of the capital expenditure incurred in the qualifying period on the construction or refurbishment of all the buildings or structures comprised in the project, and

(ii) the amount of the capital expenditure incurred in the qualifying period on the construction or refurbishment of buildings and structures comprised in the project which are other than accommodation buildings.

(b) In any case where—

(i) there is more than one accommodation building comprised in a project, and

(ii) the aggregate of the amounts of capital expenditure incurred in the qualifying period on the construction or refurbishment of each accommodation building exceeds the limit amount,

then that aggregate shall, for the purposes of an application for approval or for certification in accordance with subsection (2), be reduced to an amount equivalent to the limit amount and that equivalent amount shall be apportioned on a just and reasonable basis between all the accommodation buildings comprised in the project.

(c) Subject to the criteria in the relevant guidelines being satisfied, the mid-Shannon Tourism Infrastructure Board may grant approval or issue certification in accordance with subsection (2) in relation to an accommodation building—

(i) where there is one accommodation building comprised in a project, only in relation to the amount of the capital expenditure incurred on the construction or refurbishment of the building in the qualifying period as does not exceed the limit amount, and

(ii) where paragraph (b) applies, provided that it is satisfied with the basis on which the apportionment has been made, only in relation to that part of the equivalent amount (as referred to in paragraph (b)) which is attributable to the buildingfollowing the apportionment made in accordance with that paragraph.

Accelerated capital allowances in relation to the construction or refurbishment of certain registered holiday camps.

372AX.— (1) In this section ‘ building or structure to which this section applies ’ means a building or structure—

(a) the site of which is wholly within a qualifying mid-Shannon area,

(b) which is in use as a holiday camp—

(i) registered in the register of holiday camps kept under the Tourist Traffic Acts 1939 to 2003, and

(ii) which meets the requirements of the relevant guidelines in relation to the types of amenities and facilities that need to be provided in a holiday camp for the purposes of this Chapter,

(c) in relation to which the following data has been provided to the mid-Shannon Tourism Infrastructure Board for onward transmission to the Minister and the Minister for Finance:

(i) (I) the amount of the capital expenditure actually incurred in the qualifying period on the construction or refurbishment of the building or structure, and

(II) where subsection (4) of section 372AW applies in relation to an accommodation building, the amount of such expenditure which is eligible for certification in accordance with that section;

(ii) the number and nature of the investors that are investing in the building or structure;

(iii) the amount to be invested by each investor; and

(iv) the nature of the structures which are being put in place to facilitate the investment in the building or structure;

together with such other information as may be specified in the relevant guidelines as being of assistance to the Minister for Finance in evaluating the costs, including but not limited to exchequer costs, and the benefits arising from the operation of tax relief for buildings and structures under this Chapter, and

(d) in respect of which the mid-Shannon Tourism Infrastructure Board gives a certificate in writing after the building or structure is first used or, where capital expenditure is incurred on the refurbishment of a building or structure, first used subsequent to the incurring of that expenditure—

(i) stating that it is satisfied that the conditions in paragraphs (a), (b) and (c) have been met,

(ii) confirming the date of first use or, as the case may be, first use after refurbishment, and

(iii) which includes certification in accordance with section 372AW(2)(a)(ii) or a copy of such certification (if previously issued).

(2) Subject to subsections (3) and (4) and to section 372AZ, Chapter 1 of Part 9 applies in relation to capital expenditure incurred in the qualifying period on the construction or refurbishment of a building or structure to which this section applies as if—

(a) in section 272—

(i) in subsection (3), the following were substituted for paragraph (c):

‘(c) in relation to a building or structure to which section 372AX applies, 15 per cent of the capital expenditure referred to in subsection (2) of that section,’,

and

(ii) in subsection (4), the following were substituted for paragraph (c):

‘(c) in relation to a building or structure to which section 372AX applies, 15 years beginning with the time when the building or structure was first used or, where capital expenditure on the refurbishment of the building or structure is incurred, 15 years beginning with the time when the building or structure was first used subsequent to the incurring of that expenditure,’,

and

(b) in section 274(1)(b), the following were substituted for subparagraph (iii):

‘(iii) in relation to a building or structure to which section 372AX applies, 15 years after the building or structure was first used or, where capital expenditure on the refurbishment of the building or structure is incurred, 15 years after the building or structure was first used subsequent to the incurring of that expenditure,’.

(3) In the case where capital expenditure is incurred in the qualifying period on the refurbishment of a building or structure to which this section applies, subsection (2) shall apply only if the total amount of the capital expenditure so incurred is not less than an amount equal to 20 per cent of the market value of the building or structure immediately before that expenditure was incurred.

(4) In determining for the purposes of this Chapter whether and to what extent capital expenditure incurred on the construction or refurbishment of a building or structure to which this section applies is incurred or not incurred in the qualifying period, such an amount of that capital expenditure as is properly attributable to work on the construction or, as the case may be, refurbishment of the building or structure actually carried out during the qualifying period shall (notwithstanding any other provision of the Tax Acts as to the time when any capital expenditure is or is to be treated as incurred) be treated as having been incurred in that period.

Capital allowances in relation to the construction or refurbishment of certain tourism infrastructure facilities.

372AY.— (1) In this section ‘ qualifying premises ’ means a building or structure—

(a) the site of which is wholly within a qualifying mid-Shannon area,

(b) which apart from this section is not an industrial building or structure within the meaning of section 268 or deemed to be such a building or structure,

(c) which is in use for the purposes of the operation of one or more qualifying tourism infrastructure facilities,

(d) (i) subject to subparagraph (ii), which does not include a building or structure or part of a building or structure which is a licensed premises (as defined in section 2 of the Intoxicating Liquor Act 1988 ), but

(ii) which may include a building or structure or part of a building or structure which is a restaurant (as defined in section 6 of the Intoxicating Liquor Act 1988 ) in relation to which—

(I) a wine retailer’s on-licence, within the meaning of the Finance (1909-10) Act 1910, is currently in force, or

(II) a special restaurant licence, within the meaning of the Intoxicating Liquor Act 1988 , has been granted under section 9 of that Act,

(e) which does not include a building or structure or part of a building or structure in use as a facility in which gambling, gaming or wagering of any sort is carried on for valuable consideration or which supports the carrying on of such activities,

(f) in relation to which the following data has been provided to the mid-Shannon Tourism Infrastructure Board for onward transmission to the Minister and the Minister for Finance:

(i) (I) the amount of the capital expenditure actually incurred in the qualifying period on the construction or refurbishment of the building or structure; and

(II) where subsection (4) of section 372AW applies in relation to an accommodation building, the amount of such expenditure which is eligible for certification in accordance with that section;

(ii) the number and nature of the investors that are investing in the building or structure;

(iii) the amount to be invested by each investor; and

(iv) the nature of the structures which are being put in place to facilitate the investment in the building or structure;

together with such other information as may be specified in the relevant guidelines as being of assistance to the Minister for Finance in evaluating the costs, including but not limited to exchequer costs, and the benefits arising from the operation of tax relief for buildings and structures under this Chapter, and

(g) in respect of which the mid-Shannon Tourism Infrastructure Board gives a certificate in writing after the building or structure is first used or, where capital expenditure is incurred on the refurbishment of the building or structure, first used subsequent to the incurring of that expenditure—

(i) stating that it is satisfied that the conditions in paragraphs (a), (b), (c), (d), (e) and (f) have been met,

(ii) confirming the date of first use or, as the case may be, first use after refurbishment, and

(iii) which includes certification in accordance with section 372AW(2)(a)(ii) or a copy of such certification (if previously issued).

(2) (a) Subject to paragraph (b), subsections (3) to (5) and section 372AZ, the provisions of the Tax Acts relating to the making of allowances and charges in respect of capital expenditure incurred on the construction or refurbishment of an industrial building or structure shall, notwithstanding anything to the contrary in those provisions, apply—

(i) as if the qualifying premises were, at all times at which it is a qualifying premises, a building or structure in respect of which an allowance is to be made for the purposes of income tax or corporation tax, as the case may be, under Chapter 1 of Part 9 by reason of its use for a purpose specified in section 268(1)(a), and

(ii) where any activity carried on in the qualifying premises is not a trade, as if (for the purposes only of the making of allowances and charges by virtue of subparagraph (i)), it were a trade.

(b) An allowance shall be given by virtue of this subsection in respect of any capital expenditure incurred on the construction or refurbishment of a qualifying premises only in so far as that expenditure is incurred in the qualifying period.

(3) In the case where capital expenditure is incurred in the qualifying period on the refurbishment of a qualifying premises, subsection (2) shall apply only if the total amount of the capital expenditure so incurred is not less than an amount equal to 20 per cent of the market value of the building or structure immediately before that expenditure was incurred.

(4) For the purposes of the application, by subsection (2), of Chapter 1 of Part 9 in relation to capital expenditure incurred in the qualifying period on the construction or refurbishment of a qualifying premises—

(a) section 272 shall apply as if—

(i) in subsection (3), the following were substituted for paragraph (a):

‘(a) in relation to a building or structure to which section 372AY applies, 15 per cent of the capital expenditure referred to in subsection (2)(b) of that section,’,

and

(ii) in subsection (4), the following were substituted for paragraph (a):

‘(a) in relation to a building or structure to which section 372AY applies, 15 years beginning with the time when the building or structure was first used or, where capital expenditure on the refurbishment of the building or structure is incurred, 15 years beginning with the time when the building or structure was first used subsequent to the incurring of that expenditure,’,

and

(b) section 274(1)(b) shall apply as if the following were substituted for subparagraph (i):

‘(i) in relation to a building or structure to which section 372AY applies, 15 years after the building or structure was first used or, where capital expenditure on the refurbishment of the building or structure is incurred, 15 years after the building or structure was first used subsequent to the incurring of that expenditure,’.

(5) In determining for the purposes of this Chapter whether and to what extent capital expenditure incurred on the construction or refurbishment of a qualifying premises is incurred or not incurred in the qualifying period, such an amount of that capital expenditure as is properly attributable to work on the construction or, as the case may be, refurbishment of the premises actually carried out during the qualifying period shall (notwithstanding any other provision of the Tax Acts as to the time when any capital expenditure is or is to be treated as incurred) be treated as having been incurred in that period.

Restrictions on relief, non-application of relief in certain cases and provision against double relief.

372AZ.— (1) Notwithstanding any other provision of this Chapter, sections 372AX and 372AY shall not apply in respect of expenditure incurred on the construction or refurbishment of a building or structure—

(a) (i) where a property developer is entitled to the relevant interest, within the meaning of section 269, in relation to that expenditure, and

(ii) either the person referred to in subparagraph (i) or a person connected (within the meaning of section 10) with that person incurred the expenditure on the construction or refurbishment of the building or structure concerned,

(b) where any part of such expenditure has been or is to be met, directly or indirectly, by grant assistance or any other assistance which is granted by or through the State, any board established by statute, any public or local authority or any other agency of the State,

(c) unless the potential capital allowances in relation to the building or structure concerned and the project in which it is comprised comply with the requirements of Commission Regulation (EC) No 1628/2006 of 24 October 2006 on the application of Articles 87 and 88 of the European Communities Treaty to national regional investment aid 5 .

(2) Where relief is given by virtue of section 372AX or 372AY in relation to capital expenditure incurred on the construction or refurbishment of a building or structure, relief shall not be given in respect of that expenditure under any other provision of the Tax Acts.

(3) Where—

(a) capital expenditure is incurred in the qualifying period on the construction or refurbishment of an accommodation building, and

(b) subsection (4) of section 372AW applies so as to reduce the amount of such expenditure which is eligible for certification in accordance with that section by the mid-Shannon Tourism Infrastructure Board,

then the amount of the capital expenditure actually incurred in the qualifying period on the construction or refurbishment of the accommodation building which is to be treated as incurred—

(i) for the purposes of the making of allowances and charges under Chapter 1 of Part 9, by virtue of section 372AX or 372AY, (including the making of balancing allowances and charges under section 274 and the calculation of the residue of expenditure under section 277), but

(ii) prior to the operation of subsection (4),

shall be reduced to the amount of the capital expenditure which was eligible for certification by the mid-Shannon Tourism Infrastructure Board in relation to that building.

(4) Where relief under Chapter 1 of Part 9 is, by virtue of section 372AX or 372AY, to apply in relation to capital expenditure incurred in the qualifying period on the construction or refurbishment of a building or structure the site of which is wholly within a qualifying mid-Shannon area described in either Part 1 or Part 5 of Schedule 8B (as inserted by the Finance Act 2007), then the amount of that capital expenditure which is to be treated as incurred for the purposes of the making of allowances and charges under that Chapter (including the making of balancing allowances and charges under section 274 and the calculation of the residue of expenditure under section 277) shall be reduced to 80 per cent of the amount which, apart from this subsection, would otherwise be so treated.

(5) (a) For the purposes of the making of allowances and charges under Chapter 1 of Part 9 as is referred to in subsections (3) and (4), references in the Tax Acts, other than those in section 279 as applied by paragraph (b), to expenditure incurred on the construction or, as the case may be, refurbishment of a building or structure shall be construed as a reference to such expenditure as reduced in accordance with either or both of those subsections.

(b) Section 279 shall apply in relation to a building or structure to which either or both subsections (3) and (4) apply as if—

(i) in subsection (1) of that section, the following were substituted for the definition of ‘the net price paid’:

‘ “ the net price paid ” means the amount represented by A in the equation—

A = B x DCD

D + E

where—

B is the amount paid by a person on the purchase of the relevant interest in the building or structure,

C is the amount of the expenditure actually incurred on the construction of the building or structure as reduced in accordance with either or both subsections (3) and (4) of section 372AZ,

D is the amount of the expenditure actually incurred on the construction of the building or structure, and

E is the amount of any expenditure actually incurred which is expenditure for the purposes of paragraph (a), (b) or (c) of section 270(2).’,

(ii) in subsection (2) of that section, the following were substituted for paragraph (b):

‘(b) the person who buys that interest shall be deemed for those purposes to have incurred, on the date when the purchase price becomes payable, expenditure on the construction of the building or structure equal to that expenditure as reduced in accordance with either or both subsections (3) and (4) of section 372AZ or to the net price paid (within the meaning of that term as applied by section 372AZ(5)) by such person for that interest, whichever is the less;’,

and

(iii) in subsection (3) of that section, the reference to ‘that expenditure or to’ were a reference to ‘that expenditure as reduced in accordance with either or both subsections (3) and (4) of section 372AZ or to’.”,

(b) by inserting the following after Schedule 8A:

“Section 372AW.

SCHEDULE 8B

Description of Qualifying Mid-Shannon Areas

PART 1

Description of qualifying mid-Shannon areas of Clare

The District Electoral Divisions of Ayle, Ballynahinch, Boherglass, Caherhurley, Cappaghabaun, Carrowbaun, Cloonusker, Coolreagh, Corlea, Derrynagittagh, Drummaan, Fahymore, Feakle, Inishcaltra North, Inishcaltra South, Killaloe, Killokennedy, Killuran, Kilseily, Lackareagh, Loughea, Mountshannon, O’Briensbridge, Ogonnelloe and Scarriff.

PART 2

Description of qualifying mid-Shannon areas of Galway

The District Electoral Divisions of Abbeygormacan, Abbeyville, Balinasloe Rural, Ballinasloe Urban, Ballyglass, Ballynagar, Bracklagh, Clonfert, Clontuskert, Coos, Derrew, Drumkeary, Drummin, Eyrecourt, Kellysgrove, Killimor (Portumna rural area), Kilmacshane, Kilmalinoge, Kilquain, Kiltormer, Kylemore, Laurencetown, Leitrim, Lismanny, Loughatorick, Marblehill, Meelick, Moat, Pallas, Portumna, Tiranascragh, Tynagh and Woodford.

PART 3

Description of qualifying mid-Shannon areas of Offaly

The District Electoral Divisions of Ballycumber, Banagher, Birr Rural, Birr Urban, Broughal, Cloghan, Clonmacnoise, Derryad, Doon, Drumcullen, Eglish, Ferbane, Gallen, Hinds, Hunston, Killyon, Lumcloon, Lusmagh, Mounterin, Moyclare, Shannonbridge, Shannonharbour, Srah and Tinamuck.

PART 4

Description of qualifying mid-Shannon areas of Roscommon

The District Electoral Divisions of Athleague East, Athleague West, Athlone West Rural, Ballydangan, Ballynamona, Castlesampson, Caltragh, Cams, Carnagh, Carrowreagh, Cloonburren, Cloonown, Crannagh, Creagh, Culliagh, Drumlosh, Dysart, Fuerty, Kilcar, Kiltoom, Lackan, Lecarrow, Lismaha, Moore, Mote, Rockhill, Roscommon Rural, Roscommon Urban, Scregg, Taghmaconnell, Thomastown and Turrock.

PART 5

Description of qualifying mid-Shannon areas of Tipperary

The District Electoral Divisions of Aglishcloghane, Ardcrony, Ballina, Ballingarry (in Borrisokane rural area), Ballygibbon, Ballylusky, Ballymackey, Ballynaclogh, Birdhill, Borrisokane, Burgesbeg, Carrig, Carrigatogher, Castletown, Cloghprior, Clohaskin, Cloghjordan, Derrycastle, Finnoe, Graigue (in Borrisokane rural area), Greenhall, Kilbarron, Kilcomenty, Killoscully, Kilkeary, Kilmore, Kilnarath, Knigh, Lackagh, Lorrha East, Lorrha West, Mertonhall, Monsea, Nenagh East Urban, Nenagh Rural, Nenagh West Urban, Newport, Rathcabban, Redwood, Riverstown, Terryglass, Uskane and Youghalarra.

PART 6

Description of qualifying mid-Shannon areas of Westmeath

The District Electoral Divisions of Athlone East Rural, Athlone East Urban, Athlone West Urban, Ardnagragh, Auburn, Ballymore, Bellanalack, Carn, Castledaly, Doonis, Drumraney, Glassan, Killinure, Moate, Mount Temple, Moydrum, Muckanagh, Noughaval, Templepatrick, Tubbrit, Umma and Winetown.”,

and

(c) in Schedule 25B by inserting the following after the matter set out opposite reference number 36:

“

”.

(2) This section comes into operation on such day or days as the Minister for Finance may by order appoint and different days may be appointed for different purposes or different provisions.

30 .— (1) Section 1008 of the Principal Act is amended—

(a) in subsection (2)(a)—

(i) by renumbering the existing text as subparagraph (i), and

(ii) by inserting the following subparagraph after subparagraph (i):

“(ii) Where for any year or period within the relevant period the aggregate of the respective amounts (in this subparagraph referred to as the ‘aggregate’) of the profits or gains which under subparagraph (i) are taken as arising to each partner in the partnership is less than the full amount of the profits or gains of the partnership trade for that year or period, then the amount of the difference (in this subparagraph referred to as the ‘balance’) between that full amount and the aggregate shall for the purposes of subsection (1) be apportioned in full between the partners—

(I) in the ratio which is expressed between the partners in relation to the apportionment of the balance, or

(II) where there is no such ratio expressed—

(A) in the same ratio as the ratio which applies between the respective amounts of the profits or gains which, under subparagraph (i), were taken as arising to each partner, or

(B) where no amount of profits or gains was, under subparagraph (i), taken as arising to any individual partner, in equal shares.”,

and

(b) by deleting subsection (4).

(2) Subsection (1) of this section applies as respects the full amount of the profits or gains of a partnership trade (as provided for in subsection (3)(a) of section 1008 of the Principal Act for the purposes of subsection (2) of that section) for any year or period ending on or after 1 January 2007.

31 .— (1) Chapter 2 of Part 18 of the Principal Act is amended—

(a) in section 530(1) by inserting the following after paragraph (c) of the definition of “construction operations”:

“(ca) the installation in or on any building or structure of systems of telecommunications,”,

and

(b) in section 531—

(i) in subsection (1)—

(I) in paragraph (b)(i) by inserting “the development of land (within the meaning of section 639(1)) or” after “the erection of buildings or”, and

(II) in paragraph (f) by inserting “or any board or body established by or under royal charter and funded wholly or mainly out of moneys provided by the Oireachtas” after “statute”,

(ii) in subsection (2), by inserting “or develops land” after “buildings”,

(iii) in subsection (6)—

(I) in paragraph (b)(ii) by deleting “and” and in paragraph (b)(iii) by substituting “declarations, and” for “declarations;”, and

(II) by inserting the following after paragraph (b)(iii):

“(iv) the delivery by principals of any or all such declarations to the Revenue Commissioners;”,

and

(iv) in subsection (14)—

(I) in paragraph (c)(iv)(II) by deleting “or” and in paragraph (c)(iv)(III) by substituting “declarations, or” for “declarations,”, and

(II) by inserting the following after paragraph (c)(iv)(III):

“(IV) to deliver declarations to the Revenue Commissioners,”.

(2) (a) Subject to paragraph (b), subsection (1) has effect as on and from the date of passing of this Act.

(b) Paragraphs (a), (b)(i) and (b)(ii) of subsection (1) have effect as respects relevant contracts entered into on or after 1 May 2007.

32 .— The Principal Act is amended in Part 36A by inserting the following section after section 848Q:

“Other returns.

848QA.— A qualifying savings manager, who is or was registered in accordance with section 848R, shall when so required by the Revenue Commissioners, make a return to them in an electronic format specified by them, which sets out, in relation to all of the special savings incentive accounts managed by the qualifying savings manager, or such category of those accounts as may be specified by the Revenue Commissioners, such details in relation to each account as the Revenue Commissioners may specify.”.

33 .— The Principal Act is amended in Part 36B by inserting the following after section 848AB:

“Withdrawal of tax credits.

848ABA.— (1) In this section—

‘ requested amount ’ has the meaning assigned to it in subsection (2);

‘ retained amount ’, in relation to a requested amount and subject to subsection (4), means the amount determined by the formula—

R x DCD

S + C

where—

R is the requested amount,

C is the aggregate of the tax credit and the additional tax credit, in relation to the pension subscription made by the individual, and

S is the amount of the pension subscription;

‘ vesting day ’, in relation to an individual’s pension product, means the day on which an administrator, in accordance with section 848AA, treats tax credits as an additional voluntary contribution, a PRSA contribution, or as the case may be, a premium under an annuity contract, made by the individual.

(2) Where the vesting day in relation to an individual’s pension product is on or after 29 September 2006, and, within a period of 1 year commencing on the vesting day, the individual requires the administrator to pay an amount (in this section referred to as a ‘requested amount’) to him or her—

(a) where payment is to be made on or after 10 April 2007, the administrator shall deduct from the requested amount, the retained amount in relation to the requested amount, and

(b) where payment is made before 10 April 2007, the individual shall be assessed to income tax for the year of assessment 2007 in such an amount as would ensure that the individual is liable to pay to the Revenue Commissioners an amount equal to the retained amount, in relation to the requested amount.

(3) Where in accordance with subsection (2)(a) an administrator deducts a retained amount, the administrator is liable to pay that amount to the Revenue Commissioners in accordance with arrangements determined by them.

(4) The retained amount, in relation to any part of a requested amount or the aggregate of requested amounts that exceeds the aggregate of the tax credit, the additional tax credit and the pension subscription, shall be a nil amount.

(5) An administrator shall, when requested to do so by the Revenue Commissioners, furnish to them in respect of each individual who required the administrator to pay a requested amount—

(a) the name of the individual,

(b) the address of the individual,

(c) the PPS Number of the individual,

(d) the amount of tax credit in relation to the pension subscription made by the individual, that was claimed and paid,

(e) the amount of additional tax credit that was claimed and paid,

(f) the requested amount,

(g) the amount deducted by the administrator from the requested amount,

(h) the date on which payment was made to the individual, and

(i) such other information as the Revenue Commissioners may require.”.

34 .— (1) The Principal Act is amended—

(a) in section 256(1)—

(i) in the definition of “relevant deposit”—

(I) in paragraph (g)(ii) by deleting “or” and in paragraph (h)(ii) by substituting “charity (CHY) number,” for “charity (CHY) number;”, and

(II) by inserting the following paragraphs after paragraph (h):

“(i) which is a deposit referred to in subsection (1A), or

(j) which is a deposit referred to in subsection (1B);”,

(ii) in the definition of “relevant deposit taker” by inserting the following paragraph after paragraph (ca):

“(cb) a specified intermediary in relation only to a specified deposit,”,

(iii) in the definition of “special term share account” by substituting “section 267A;” for “section 267A.”, and

(iv) by inserting the following after the definition of “special term share account”:

“ ‘ specified deposit ’ means a deposit of a class designated by the Minister for Finance for the purposes of this definition;

‘ specified intermediary ’ means a person appointed by the National Treasury Management Agency for the purposes only of taking specified deposits.”,

(b) by inserting the following after section 256(1):

“(1A) A deposit shall be a deposit to which this subsection refers as respects any year of assessment if—

(a) (i) at any time in that year of assessment the individual beneficially entitled to the interest or the individual’s spouse has attained the age of 65 years, and

(ii) the total income of the individual for that year of assessment does not exceed the specified amount (within the meaning of section 188(2)) applicable to that individual,

and

(b) a declaration of the kind mentioned in section 263A has been made to the relevant deposit taker.

(1B) A deposit shall be a deposit to which this subsection refers as respects any year of assessment if—

(a) (i) the individual beneficially entitled to any interest paid in respect of that deposit in that year of assessment, or the individual’s spouse, is a relevant person (within the meaning of section 267(1)(b)) and the individual would, in accordance with section 267(3), be entitled to repayment of the whole of any appropriate tax if it had been deducted from that interest, or

(ii) the person entitled to any interest paid in respect of that deposit in that year of assessment is a person who is exempt from income tax by virtue of section 189A(2) and that person would, in accordance with section 267(2), be entitled to repayment of the whole of any appropriate tax if it had been deducted from that interest,

(b) a declaration of the kind mentioned in section 263B has been made to the Revenue Commissioners,

(c) a notification of the kind mentioned in section 263C has been issued by the Revenue Commissioners to the relevant deposit taker that the deposit is a deposit to which this subsection refers and that notification is not cancelled in accordance with section 263C(2), and

(d) the individual beneficially entitled to the interest is not an individual referred to in subsection (1A), other than an individual who is a relevant person within the meaning of section 267(1)(b),

and where, by virtue of section 263C(2), a deposit is not a deposit to which this subsection refers as respects any year of assessment, then the Revenue Commissioners shall notify the deposit taker accordingly and where at any time the Revenue Commissioners have so notified the deposit taker, the deposit shall not be a deposit to which this subsection applies from that time.”,

(c) by inserting the following after section 261A:

“Taxation of specified interest.

261B.— (1) In this section ‘specified interest’ means interest arising to a person in respect of a deposit in relation to which a declaration has been made by the person under subsection (1A) or (1B) of section 256 and which is not included in relevant interest for the purposes of paragraph (c)(i)(II) of section 261.

(2) Notwithstanding any other provision of the Income Tax Acts, the amount of taxable income on which a person is charged to income tax at the standard rate for any year of assessment shall be increased by an amount equal to the amount of that person’s specified interest on which income tax for that year falls to be computed.

(3) Section 246(2) does not apply to a payment of specified interest if it would otherwise apply.”,

(d) by inserting after section 263 the following:

“Declarations to a relevant deposit taker relating to deposits of certain persons.

263A.— (1) The declaration referred to in section 256(1A) is a declaration in writing to a relevant deposit taker which—

(a) is made by an individual (in this section referred to as the ‘declarer’) to whom any interest on the deposit in respect of which the declaration is made is payable by the relevant deposit taker and is signed by the declarer,

(b) is made in such form as may be prescribed, authorised or approved by the Revenue Commissioners,

(c) declares that at the time when the declaration is made—

(i) the individual beneficially entitled to the interest in relation to the deposit or his or her spouse has attained the age of 65 years, and

(ii) the total income of the individual for the year of assessment in which the declaration is made will not exceed the specified amount (within the meaning of section 188(2)) applicable to that individual,

(d) contains as respects the individual, or as the case may be each of the individuals, mentioned in paragraph (c)—

(i) the name and address of the individual,

(ii) the date of birth of the individual who has attained the age of 65 years, and

(iii) the individual’s PPS Number (within the meaning of section 891B),

(e) contains an undertaking by the declarer that if the individual or, as the case may be, any of the individuals mentioned in paragraph (d) no longer satisfies the conditions set out in paragraph (a) of section 256(1A) the declarer will notify the relevant deposit taker accordingly, and

(f) contains such other information as the Revenue Commissioners may reasonably require for the purposes of this Chapter.

(2) Section 263(2) applies as respects declarations of the kind mentioned in this section as it applies as respects declarations of the kind mentioned in that section.

Declarations to the Revenue Commissioners relating to deposits of certain persons.

263B.— The declaration referred to in section 256(1B) is a declaration in writing to the Revenue Commissioners which—

(a) is made by the person (in this section referred to as the ‘declarer’) to whom any interest on the deposit in respect of which the declaration is made is payable by the relevant deposit taker and is signed by the declarer,

(b) is made in such form as may be prescribed, authorised or approved by the Revenue Commissioners,

(c) declares that at the time when the declaration is made—

(i) (I) the individual beneficially entitled to the interest in relation to the deposit or his or her spouse is permanently incapacitated by reason of mental or physical infirmity from maintaining himself or herself, and

(II) the individual beneficially entitled to any interest paid in respect of that deposit in any year of assessment or his or her spouse, is a relevant person (within the meaning of section 267) and the individual would, in accordance with section 267(3), be entitled to repayment of the whole of any appropriate tax if it had been deducted from that interest,

or

(ii) (I) the person entitled to the interest in relation to the deposit is exempt from income tax by virtue of section 189A(2), and

(II) the person entitled to any interest paid in respect of that deposit in any year of assessment is a person referred to in section 189A(2) and would, in accordance with section 267(2), be entitled to repayment of the whole of any appropriate tax if it had been deducted from that interest,

(d) contains as respects the person, or as the case may be, each of the persons mentioned in paragraph (c)—

(i) the name and address of the person,

(ii) the person’s PPS Number (within the meaning of section 891B) or where the person is not an individual, the person’s tax reference number (within the meaning of paragraphs (b) and (c) of the definition of ‘tax reference number’ in section 885),

(iii) the name and address of the deposit taker (including the name and address of the branch of the deposit taker, if any) who holds the deposit in respect of which the declaration is made, and

(iv) the account number or membership number, as the case may be, of the deposit in respect of which the declaration is made,

(e) contains an undertaking by the declarer that if the person or, as the case may be, any of the persons mentioned in paragraph (d) no longer satisfies the conditions set out in paragraph (a) of section 256(1B) the declarer will notify the Revenue Commissioners accordingly, and

(f) contains such other information as the Revenue Commissioners may reasonably require for the purposes of this Chapter.

Notifications by the Revenue Commissioners relating to deposits of certain persons.

263C.— (1) The notification referred to in section 256(1B) is a notification—

(a) in writing by the Revenue Commissioners to a relevant deposit taker confirming that the account identified in the notification is to be treated as not being a relevant deposit unless and until the notification is cancelled in accordance with subsection (2),

(b) which contains as respects the person beneficially entitled to, or the person (being one or more than one trustee) referred to in section 189A(2) entitled to, the interest in relation to the deposit mentioned in paragraph (a)—

(i) the name and address of the person,

(ii) the person’s PPS Number (within the meaning of section 891B) or, where the person is not an individual, the person’s tax reference number (within the meaning of paragraphs (b) and (c) of the definition of ‘tax reference number’ in section 885), and

(iii) the account number of the deposit,

and

(c) which contains such other information as the Revenue Commissioners may reasonably decide for the purposes of this Chapter.

(2) The Revenue Commissioners may at any time cancel the notification and give notice in writing to that effect to both the relevant deposit taker and the person or persons mentioned in subsection (1)(b). Where at any time the Revenue Commissioners have so notified the deposit taker, the deposit shall not be a deposit to which this section applies from that time.”,

(e) by inserting after section 265 the following:

“Deposits of certain persons.

265A.— Where a return is required to be made by a relevant deposit taker under section 891 in respect of interest on a deposit which is a deposit of a kind referred to in subsection (1A) or (1B) of section 256, then that return shall, in addition to the matters which shall be included on the return by virtue of section 891, include—

(a) the PPS Number (within the meaning of section 891B) of the person, or

(b) where the person is not an individual, the person’s tax reference number (within the meaning of paragraphs (b) and (c) of section 885).”,

(f) in section 267(3) by substituting “section 189A(4)” for “section 189A(3)”,

(g) in section 891(1A) by substituting the following for paragraph (b):

“(b) This section shall not apply in relation to any interest paid or credited by a credit union in respect of money received or retained by it, other than interest paid or credited by it in respect of a deposit to which subsection (1A) or (1B) of section 256 refers.”,

and

(h) in section 904A(3)(b)(ii)(I) by substituting “section 246A(3)(b)(ii)(III), 263 or 263A,” for “section 246A(3)(b)(ii)(III) or 263,”.

(2) This section applies on and from the date of the passing of this Act.

35 .— (1) The Principal Act is amended—

(a) in section 826 by substituting the following for subsection (1):

“(1) Where—

(a) the Government by order declare that arrangements specified in the order have been made with the government of any territory outside the State in relation to—

(i) affording relief from double taxation in respect of—

(I) income tax,

(II) corporation tax in respect of income and chargeable gains (or, in the case of arrangements made before the enactment of the Corporation Tax Act 1976 , corporation profits tax),

(III) capital gains tax,

(IV) any taxes of a similar character,

imposed by the laws of the State or by the laws of that territory, and

(ii) in the case of taxes of any kind or description imposed by the laws of the State or the laws of that territory—

(I) exchanging information for the purposes of the prevention and detection of tax evasion, or

(II) granting relief from taxation under the laws of that territory to persons who are resident in the State for the purposes of tax,

and that it is expedient that those arrangements should have the force of law, and

(b) the order so made is referred to in Part 1 of Schedule 24A,

then, subject to this section and to the extent provided for in this section, the arrangements shall, notwithstanding any enactment, have the force of law as if each such order were an Act of the Oireachtas on and from the date of—

(A) the insertion of Schedule 24A into this Act, or

(B) the insertion of a reference to the order into Part 1 of Schedule 24A,

whichever is the later.

(1A) Where—

(a) the Government by order declare that arrangements specified in the order have been made with the government of any territory outside the State in relation to affording relief from double taxation of air transport undertakings and their employees in respect of all taxes which are or may become chargeable on profits, income and capital gains imposed by the laws of the State or the laws of that territory, and that it is expedient that those arrangements should have the force of law, and

(b) the order so made is referred to in Part 2 of Schedule 24A,

then, subject to this section and to the extent provided for in this section, the arrangements shall, notwithstanding any enactment, have the force of law as if each such order were an Act of the Oireachtas on and from the date of—

(i) the insertion of Schedule 24A into this Act, or

(ii) the insertion of a reference to the order into Part 2 of Schedule 24A,

whichever is the later.

(1B) Where—

(a) the Government by order declare that arrangements specified in the order have been made with the government of any territory outside the State in relation to—

(i) exchanging information for the purposes of the prevention and detection of tax evasion in the case of taxes of any kind or description imposed by the law of the State or the laws of that territory,

(ii) such other matters relating to affording relief from double taxation as the Government consider appropriate,

and that it is expedient that those arrangements should have the force of law, and

(b) the order so made is specified in Part 3 of Schedule 24A,

then, subject to this section, the arrangements shall, notwithstanding any enactment, have the force of law as if each such order were an Act of the Oireachtas on and from the date of the insertion of a reference to the order into Part 3 of Schedule 24A.”,

and

(b) by inserting the following after Schedule 24:

“SCHEDULE 24A

Arrangements Made by the Government with the Government of any Territory Outside the State in Relation to Affording Relief from Double Taxation and Exchanging Information in Relation to Tax

PART 1

Arrangements in Relation to Affording Relief from Double Taxation in Respect of the Taxes Referred to in Section 826(1), Made by the Government and Specified in Orders Made by the Government

1. The Double Taxation Relief (Taxes on Income and Capital) (Australia) Order 1983 (S.I. No. 406 of 1983).

2. The Double Taxation Relief (Taxes on Income) (Republic of Austria) Order 1967 (S.I. No. 250 of 1967) and the Double Taxation Relief (Taxes on Income and Capital Gains) (Republic of Austria) Order 1988 (S.I. No. 29 of 1988).

3. The Double Taxation Relief (Taxes on Income) (Kingdom of Belgium) Order 1973 (S.I. No. 66 of 1973).

4. The Double Taxation Relief (Taxes on Income and Capital Gains) (The Republic of Bulgaria) Order 2000 (S.I. No. 372 of 2000).

5. The Double Taxation Relief (Taxes on Income and Capital Gains) (Government of Canada) Order 2004 (S.I. No. 773 of 2004).

6. The Double Taxation Relief (Taxes on Income) (People’s Republic of China) Order 2000 (S.I. No. 373 of 2000).

7. The Double Taxation Relief (Taxes on Income and Capital Gains) (Republic of Croatia) Order 2002 (S.I. No. 574 of 2002).

8. The Double Taxation Relief (Taxes on Income) (Cyprus) Order 1970 (S.I. No. 79 of 1970).

9. The Double Taxation Relief (Taxes on Income and Capital) (Czech Republic) Order 1995 (S.I. No. 321 of 1995).

10. The Double Taxation Relief (Taxes on Income) (Kingdom of Denmark) Order 1993 (S.I. No. 286 of 1993).

11. The Double Taxation Relief (Taxes on Income and Capital Gains) (Republic of Estonia) Order 1998 (S.I. No. 496 of 1998).

12. The Double Taxation Relief (Taxes on Income and Capital Gains) (Republic of Finland) Order 1993 (S.I. No. 289 of 1993).

13. The Double Taxation Relief (Taxes on Income) (Republic of France) Order 1970 (S.I. No. 162 of 1970).

14. The Double Taxation Relief (Taxes on Income and Capital and Gewerbesteuer (Trade Tax)) (Federal Republic of Germany) Order 1962 (S.I. No. 212 of 1962).

15. The Double Taxation Relief (Taxes on Income and Capital Gains) (Government of the Hellenic Republic) Order 2004 (S.I. No. 774 of 2004).

16. The Double Taxation Relief (Taxes on Income) (Republic of Hungary) Order 1995 (S.I. No. 301 of 1995).

17. The Double Taxation Relief (Taxes on Income and on Capital) (Republic of Iceland) Order 2004 (S.I. No. 775 of 2004).

18. The Double Taxation Relief (Taxes on Income and Capital Gains) (Republic of India) Order 2001 (S.I. No. 521 of 2001).

19. The Double Taxation Relief (Taxes on Income) (Italy) Order 1973 (S.I. No. 64 of 1973).

20. The Double Taxation Relief (Taxes on Income) (State of Israel) Order 1995 (S.I. No. 323 of 1995).

21. The Double Taxation Relief (Taxes on Income) (Japan) Order 1974 (S.I. No. 259 of 1974).

22. The Double Taxation Relief (Taxes on Income and Capital Gains) (Republic of Korea) Order 1991 (S.I. No. 290 of 1991).

23. The Double Taxation Relief (Taxes on Income and Capital Gains) (Republic of Latvia) Order 1997 (S.I. No. 504 of 1997).

24. The Double Taxation Relief (Taxes on Income and Capital Gains) (Republic of Lithuania) Order 1997 (S.I. No. 503 of 1997).

25. The Double Taxation Relief (Taxes on Income and on Capital) (Grand Duchy of Luxembourg) Order 1973 (S.I. No. 65 of 1973).

26. The Double Taxation Relief (Taxes on Income) (Malaysia) Order 1998 (S.I. No. 495 of 1998).

27. The Double Taxation Relief (Taxes on Income and Capital Gains) (The United Mexican States) Order 1998 (S.I. No. 497 of 1998).

28. The Double Taxation Relief (Taxes on Income and Capital) (Kingdom of the Netherlands) Order 1970 (S.I. No. 22 of 1970).

29. The Double Taxation Relief (Taxes on Income and Capital Gains) (New Zealand) Order 1988 (S.I. No. 30 of 1988).

30. The Double Taxation Relief (Taxes on Income and on Capital) (Kingdom of Norway) Order 2001 (S.I. No. 520 of 2001).

31. The Double Taxation Relief (Taxes on Income) (Pakistan) Order 1974 (S.I. No. 260 of 1974).

32. The Double Taxation Relief (Taxes on Income) (Republic of Poland) Order 1995 (S.I. No. 322 of 1995).

33. The Double Taxation Relief (Taxes on Income) (Portuguese Republic) Order 1994 (S.I. No. 102 of 1994) and the Double Taxation Relief (Taxes on Income) (Portuguese Republic) Order 2005 (S.I. No. 816 of 2005).

34. The Double Taxation Relief (Taxes on Income and Capital Gains) (Romania) Order 1999 (S.I. No. 427 of 1999).

35. The Double Taxation Relief (Taxes on Income) (Russian Federation) Order 1994 (S.I. No. 428 of 1994).

36. The Double Taxation Relief (Taxes on Income and Capital Gains) (The Slovak Republic) Order 1999 (S.I. No. 426 of 1999).

37. The Double Taxation Relief (Taxes on Income and Capital Gains) (Republic of Slovenia) Order 2002 (S.I. No. 573 of 2002).

38. The Double Taxation Relief (Taxes on Income and Capital Gains) (Republic of South Africa) Order 1997 (S.I. No. 478 of 1997).

39. The Double Taxation Relief (Taxes on Income and Capital Gains) (Kingdom of Spain) Order 1994 (S.I. No. 308 of 1994).

40. The Double Taxation Relief (Taxes on Income and Capital Gains) (Sweden) Order 1987 (S.I. No. 348 of 1987) and the Double Taxation Relief (Taxes on Income and Capital Gains) (Sweden) Order 1993 (S.I. No. 398 of 1993).

41. The Double Taxation Relief (Taxes on Income and Capital) (Swiss Confederation) Order 1967 (S.I. No. 240 of 1967) and the Double Taxation Relief (Taxes on Income and Capital) (Swiss Confederation) Order 1984 (S.I. No. 76 of 1984).

42. The Double Taxation Relief (Taxes on Income and Capital Gains) (United Kingdom) Order 1976 (S.I. No. 319 of 1976), the Double Taxation Relief (Taxes on Income and Capital Gains) (United Kingdom) Order 1995 (S.I. No. 209 of 1995) and the Double Taxation Relief (Taxes on Income and Capital Gains) (United Kingdom of Great Britain and Northern Ireland) Order 1998 (S.I. No. 494 of 1998).

43. The Double Taxation Relief (Taxes on Income and Capital Gains) (United States of America) Order 1997 (S.I. No. 477 of 1997) and the Double Taxation Relief (Taxes on Income and Capital Gains) (United States of America) Order 1999 (S.I. No. 425 of 1999).

44. The Double Taxation Relief (Taxes on Income) (Republic of Zambia) Order 1973 (S.I. No. 130 of 1973).

45. The Double Taxation Relief (Taxes on Income) (Adjustment of Profits of Associated Enterprises) (European Community) Order 1994 (S.I. No. 88 of 1994) as amended by the Double Taxation Relief (Taxes on Income) (Adjustment of Profits of Associated Enterprises) (European Communities) Order 2004 (S.I. No. 40 of 2004), the Double Taxation Relief (Taxes on Income) (Adjustment of Profits of Associated Enterprises) (Republic of Austria, Republic of Finland and Kingdom of Sweden) Order 2004 (S.I. No. 41 of 2004) and the Double Taxation Relief (Taxes on Income) (Adjustment of Profits of Associated Enterprises) (Accession States) Order 2006 (S.I. No. 112 of 2006).

PART 2

Arrangements, Pursuant to Section 826(1A) in Relation to Affording Relief from Double Taxation of Air Transport Undertakings and their Employees, Made by the Government and Specified in Orders Made by the Government

Double Taxation Relief (Air Transport Undertakings and their Employees) (Union of Soviet Socialist Republics) Order 1987 (S.I. No. 349 of 1987).

PART 3

Arrangements, Pursuant to Section 826(1B) in Relation to Exchange of Information Relating to Tax and in Relation to Other Matters Relating to Tax”.

(2) Schedule 2 applies for the purposes of supplementing subsection (1).

(3) This section has effect as on and from the passing of this Act.

36 .— (1) The Principal Act is amended—

(a) by inserting the following section after section 826:

“Unilateral relief from double taxation.

826A.— Where relief from double taxation is not afforded by virtue of section 826, relief (known as ‘unilateral relief’) from tax shall be given in respect of tax paid under the laws of a territory other than the State in accordance with Schedule 24.”,

and

(b) in Schedule 24—

(i) by inserting the following after paragraph 9D:

“Unilateral Relief (branch profits)

9DA.— (1) To the extent appearing from the following provisions of this paragraph, relief (in this paragraph referred to as ‘unilateral relief’) from corporation tax in respect of profits of a company from a trade carried on by the company through a branch or agency in a territory other than the State shall be given in respect of tax payable under the law of any territory other than the State by allowing that tax as a credit against corporation tax, notwithstanding that there are not for the time being in force any arrangements providing for such relief.

(2) Unilateral relief shall be such relief as would fall to be given under this Schedule if arrangements with the government of the territory in question containing the provisions in subparagraphs (3) to (5) were in force, and a reference in this Schedule to credit under arrangements shall be construed as including a reference to unilateral relief.

(3) Subject to Part 1 and to subparagraph (5), credit for tax paid under the law of a territory other than the State and computed by reference to income of a company, being a company falling within subparagraph (4), from a trade carried on by it through a branch or agency in that territory shall be allowed against corporation tax in the State computed by reference to that income.

(4) (a) A company falls within this subparagraph if—

(i) it is resident in the State, or

(ii) it is, by virtue of the law of a relevant Member State other than the State, resident for the purposes of tax in such a Member State and the income referred to in subparagraph (3) forms part of the income of a branch or agency of the company in the State.

(b) For the purposes of subparagraph (a)(ii), ‘tax’, in relation to a relevant Member State other than the State, means any tax imposed in the Member State which corresponds to corporation tax in the State.

(5) Credit shall not be allowed by virtue of subparagraph (3)—

(a) for tax paid under the law of a territory where there are arrangements with the government of the territory except to the extent that credit may not be given for that tax under those arrangements, or

(b) for any tax which is relevant foreign tax within the meaning of section 449 or paragraph 9D.

(6) Where—

(a) unilateral relief may be given in respect of any profits, and

(b) it appears that the assessment to corporation tax made in respect of the profits is not made in respect of the full amount thereof, or is incorrect having regard to the credit, if any, which falls to be given by way of unilateral relief,

then any such assessment may be made or amended as is necessary to ensure that the total amount of the profits is assessed, and the proper credit, if any, is given in respect thereof.

(7) In this Schedule in its application to unilateral relief, references to tax payable or paid under the law of a territory outside the State include only references to taxes which are charged on income or capital gains and which correspond to corporation tax and capital gains tax.”,

and

(ii) by inserting the following after paragraph 9F:

“9FA.— (1) In this paragraph—

‘ aggregate amount of corporation tax payable by a company for an accounting period in respect of foreign branch income of the company for the accounting period ’ means so much of the corporation tax which, apart from this paragraph, would be payable by the company for that accounting period as would not have been payable had the foreign branch income been disregarded for the purposes of tax;

‘ foreign branch ’, in relation to a company, means a branch or agency of the company in a territory other than the State through which the company carries on a trade in that territory;

‘ foreign branch income ’, in relation to a company, means so much of the income of the company as is attributable to a foreign branch;

‘ foreign tax ’, in relation to foreign branch income of a company, means tax which—

(a) is paid under the laws of the territory in which the foreign branch is situated on income attributable to that branch, and

(b) corresponds to corporation tax.

(2) Where, as respects any foreign branch income of a company for an accounting period, any part of the foreign tax cannot, apart from this paragraph, be allowed as a credit against corporation tax and, accordingly, the amount of the income is treated under paragraph 7(3)(c) as reduced by that part of the foreign tax, then an amount equal to the aggregate of—

(a) where income that is chargeable to tax at the rate specified in section 21(1) for the accounting period is treated under paragraph 7(3)(c) as reduced, an amount determined by the formula—

100 — R x D

100

where—

R is the rate per cent specified in section 21(1), and

D is the amount by which that income is so treated as reduced,

and

(b) where income that is chargeable to tax at the rate specified in section 21A(3) for the accounting period is treated under paragraph 7(3)(c) as reduced, an amount determined by the formula—

100 — R x D

100

where—

R is the rate per cent specified in section 21A(3), and

D is the amount by which that income is so treated as reduced,

shall be treated for the purposes of subparagraph (3) as unrelieved foreign tax of that accounting period.

(3) The aggregate amount of corporation tax payable by a company for an accounting period in respect of foreign branch income of the company for the accounting period shall be reduced by the unrelieved foreign tax of that accounting period.

Unilateral Relief (capital gains)

9FB.— (1) To the extent appearing from the following provisions of this paragraph, relief (in this paragraph referred to as ‘unilateral relief’) from capital gains tax (including corporation tax in respect of chargeable gains) in respect of chargeable gains accruing to a person on the disposal of an asset (in this paragraph referred to as a ‘specified asset’) which is located in a territory other than the State shall be given in respect of tax payable under the law of any specified territory by allowing that tax as a credit against capital gains tax (or as the case may be corporation tax in respect of chargeable gains), notwithstanding that there are not for the time being in force any arrangements providing for such relief.

(2) Unilateral relief shall be such relief as would fall to be given under this Schedule if arrangements with the government of the specified territory in question contained the provisions in subparagraphs (3) and (4), and a reference in this Schedule to credit under arrangements shall be construed as including a reference to unilateral relief.

(3) Subject to Part 1 and to subparagraph (5), credit for tax paid under the law of a specified territory and computed by reference to a capital gain of a person from the disposal by the person of a specified asset, shall be allowed against capital gains tax (or as the case may be corporation tax in respect of chargeable gains) in the State computed by reference to that capital gain.

(4) Credit shall not be allowed by virtue of subparagraph (3) for tax paid under the law of a specified territory to the extent that credit may be given for that tax under—

(a) arrangements with the government of the territory, or

(b) any other provision of this Schedule.

(5) Where—

(a) unilateral relief may be given in respect of any chargeable gain, and

(b) it appears that any assessment made in respect of the chargeable gain is not made in respect of the full amount thereof, or is incorrect having regard to the credit, if any, which falls to be given by way of unilateral relief,

then any such assessment may be made or amended as is necessary to ensure that the total amount of the chargeable gain is assessed, and the proper credit, if any, is given in respect thereof.

(6) In this Schedule in its application to unilateral relief, references to tax payable or paid under the law of a territory outside the State include only references to taxes which are charged on capital gains and which correspond to income tax, corporation tax or capital gains tax.

(7) In this paragraph ‘ specified territory ’ means any of the following territories with the government of which arrangements have been made, that is to say, the Kingdom of Belgium, Cyprus, the Republic of France, the Federal Republic of Germany, the Italian Republic, Japan, the Grand Duchy of Luxembourg, the Kingdom of the Netherlands, Pakistan or Zambia.”.

(2) This section applies—

(a) in the case of relief from corporation tax, as respects an accounting period ending on or after 1 January 2007, and

(b) in any other case, for the year of assessment 2007 and subsequent years.

37 .— (1) Section 81 of the Principal Act is amended in subsection (2)(n)—

(a) in subparagraph (i) by deleting “or” and in subparagraph (ii) by substituting “length, or” for “length.”, and

(b) by inserting the following after subparagraph (ii):

“(iii) of other—

(I) expenditure incurred, or

(II) payment made to the connected company,

by the company in connection with the right to receive such shares which is incurred or, as the case may be, made for bona fide commercial purposes and does not form part of any scheme or arrangement of which the main purpose or one of the main purposes is the avoidance of liability to income tax, corporation tax or capital gains tax.”.

(2) This section applies as respects accounting periods ending on or after 1 February 2007.

38 .— (1) The Principal Act is amended—

(a) In section 172A(1)(a)—

(i) by inserting the following after the definition of “dividend withholding tax”:

“ ‘ electronic dividend voucher ’ means a statement in electronic format that satisfies the requirements of section 172I(1A)(a);

‘ electronic number ’ means a unique number on an electronic dividend voucher;”,

(ii) by inserting the following after the definition of “intermediary”:

“ ‘ ISI Number ’, in relation to a security issued by a company, means that security’s unique International Securities Identification Number (ISIN) issued by the Irish Stock Exchange Limited or by an equivalent authority in a relevant territory;”,

and

(iii) by inserting the following after the definition of “qualifying savings manager”:

“ ‘ recipient ID code ’, in relation to the recipient of a dividend, means the unique code on an electronic dividend voucher that identifies that recipient;”,

(b) in section 172D(3)(b)(iii) by substituting “is substantially and regularly traded on a stock exchange in the State, on” for “is substantially and regularly traded on”,

(c) in section 172I by inserting the following after subsection (1):

“(1A) A statement delivered by means of electronic communications to an intermediary shall satisfy the requirements of subsection (1) where—

(a) the statement contains—

(i) an ISI Number,

(ii) a recipient ID code,

(iii) the information referred to in paragraphs (c) to (e) of subsection (1), and

(iv) an electronic number,

(b) the intermediary has consented to the statement being delivered by means of electronic communications and has not withdrawn that consent, and

(c) the Revenue Commissioners have agreed to accept the statement for the purposes of this Chapter.”,

(d) in section 172J(3) by substituting “Where, in a year of assessment or in an accounting period of a company (as appropriate),” for “Where”, and

(e) in paragraph 9(f)(iii) of Schedule 2A, by substituting “is substantially and regularly traded on a stock exchange in the State, on” for “is substantially and regularly traded on”.

(2) (a) Paragraphs (a), (b), (c) and (e) of subsection (1) apply as respects any relevant distribution (within the meaning of section 172A of the Principal Act) made on or after 1 February 2007.

(b) Paragraph (d) of subsection (1 applies as respects any chargeable period (within the meaning of section 321(2) of the Principal Act) ending on or after 1 February 2007.

39 .— (1) Part 27 of the Principal Act is amended—

(a) in section 747B—

(i) in subsection (2), by substituting “Subject to subsection (2A), this Chapter” for “This Chapter”, and

(ii) by inserting the following after subsection (2):

“(2A) This Chapter does not apply to an offshore fund other than an offshore fund which—

(a) (i) is an undertaking for collective investment formed under the law of an offshore state,

(ii) is similar in all material respects to an investment limited partnership (within the meaning of the Investment Limited Partnership Act 1994), and

(iii) holds a certificate authorising it to act as such an undertaking, being a certificate issued by the authorities of that state under laws providing for the proper and orderly regulation of such undertakings,

(b) is authorised by or under any measures duly taken by a Member State for the purposes of giving effect to—

(i) Council Directive 85/611/EEC on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities (UCITS), or

(ii) any amendment to that Directive,

(c) (i) is a company formed under the law of an offshore state,

(ii) is similar in all material respects to an authorised investment company (within the meaning of Part XIII of the Companies Act 1990 ),

(iii) holds an authorisation issued by the authorities of that state under laws providing for the proper and orderly regulation of such companies and that authorisation has not ceased to have effect, and

(iv) is an investment company—

(I) which raises capital by promoting the sale of its shares to the public, or

(II) each of the shareholders of which is an investor which, if the company were an authorised investment company within the meaning of Part XIII of the Companies Act 1990 would be a collective investor within the meaning of section 739B,

or

(d) (i) is a unit trust scheme, the trustees of which are not resident in the State,

(ii) is similar in all material respects to an authorised unit trust scheme (within the meaning of the Unit Trusts Act 1990 ),

(iii) holds an authorisation issued by the authorities of that offshore state under laws providing for the proper and orderly regulation of such schemes and that authorisation has not ceased to have effect, and

(iv) provides facilities for the participation by the public, as beneficiaries under the trust, in profits or income arising from the acquisition, holding, management or disposal of securities or any other property whatsoever.”,

and

(b) by inserting the following after section 747A:

“Treatment of certain offshore funds.

747AA.— Without prejudice to ‘offshore fund’ having the meaning assigned to it by section 743 for the purposes of Chapter 4, where that Chapter does not apply to an offshore fund by virtue of subsection (2A) of section 747B, then Chapter 2 and section 747A shall not apply in respect of that offshore fund.”.

(2) (a) Subject to paragraph (b), subsection (1) applies as respects income arising or gains accruing on or after 20 February 2007.

(b) Where on 20 February 2007 a person had a material interest in an offshore fund, which was an offshore fund to which Chapter 4 of Part 27 of the Principal Act applied before the passing of this Act, and that fund—

(i) is not an offshore fund to which Chapter 4 of Part 27 of the Principal Act applies after the passing of this Act, and

(ii) would not be a personal portfolio investment undertaking (within the meaning of section 739BA of the Principal Act) if it were deemed to be a fund to which that Chapter applied after the passing of this Act,

then subsection (1) does not apply to income arising and gains accruing in respect of the material interest which the person had on 20 February 2007.

40 .— (1) The Principal Act is amended—

(a) by inserting the following after section 739B:

“Personal portfolio investment undertaking.

739BA.— (1) In this section—

‘ investor ’ means—

(a) in relation to an investment undertaking, a unit holder in the investment undertaking who is an individual, and

(b) in relation to an offshore fund to which Chapter 4 applies, an individual who has a material interest in the offshore fund;

‘ land ’ has the same meaning as in section 730BA;

‘ material interest ’ shall be construed in accordance with section 743;

‘ offshore fund ’ has the meaning assigned to it by section 743;

‘ public ’ has the same meaning as in section 730BA.

(2) In this Chapter and in Chapter 4 of this Part ‘ personal portfolio investment undertaking ’ means—

(a) in relation to an investor in an investment undertaking, an investment undertaking, and

(b) in relation to an investor in an offshore fund to which Chapter 4 applies, such an offshore fund,

under the terms of which some or all of the property of the undertaking or, as the case may be, the offshore fund, may be, or was, selected by, or the selection of some or all of the property may be, or was, influenced by—

(i) the investor,

(ii) a person acting on behalf of the investor,

(iii) a person connected with the investor,

(iv) a person connected with a person acting on behalf of the investor,

(v) the investor and a person connected with the investor, or

(vi) a person acting on behalf of both the investor and a person connected with the investor,

where ‘ person connected ’ in this subsection means a person connected within the meaning of section 10.

(3) For the purposes of subsection (2) and without prejudice to the application of that subsection, the terms of an investment undertaking or an offshore fund, as the case may be, shall be treated as permitting the selection referred to in that subsection where—

(a) the terms of such undertaking or offshore fund, or any other agreement between any person referred to in that subsection and such undertaking or offshore fund concerned—

(i) allow the exercise of an option by any person referred to in that subsection to make the selection referred to in that subsection,

(ii) give such undertaking or offshore fund discretion to offer any person referred to in that subsection the right to make the selection referred to in that subsection, or

(iii) allow any of the persons referred to in that subsection the right to request, subject to the agreement of such undertaking or offshore fund, a change in those terms such that the selection referred to in that subsection may be made by any of those persons,

or

(b) the investor is unable under those terms to select any of the property but any of the persons referred to in that subsection has or had the option of requiring such undertaking or offshore fund to appoint an investment advisor (no matter how such a person is described) in relation to the selection of the property.

(4) An investment undertaking or an offshore fund, as the case may be, is not a personal portfolio investment undertaking if—

(a) the only property which may be or has been selected satisfies the condition specified in subsection (5), and

(b) the terms under which such undertaking or offshore fund is offered meet the requirements of subsection (6).

(5) The condition specified in this subsection is that at the time when the property is or was available to be selected the opportunity to select—

(a) in the case of land, that property, and

(b) in any other case, property of the same description as the first-mentioned property,

is or was available to the public on terms which provide or provided that the opportunity to select the property is or was available to any person falling within the terms of the opportunity and that opportunity is or was clearly identified to the public, in marketing or other promotional literature published at that time by the investment undertaking or offshore fund concerned, as available generally to any person falling within the terms of the opportunity.

(6) The requirements of this subsection are that—

(a) the investment undertaking or offshore fund concerned does not subject any person to any treatment in connection with the opportunity which is different or more burdensome than any treatment to which any other person is or may be subject, and

(b) where the terms of the opportunity referred to in subsection (5) include terms—

(i) which set out the capital requirement of the opportunity and this requirement is identified to the public in the marketing or other promotional material published by the investment undertaking or offshore fund at the time the property is available to be selected, and

(ii) indicating that 50 per cent or more by value of the property referred to in that subsection is or is to be land,

then the amount any one person may invest in the investment undertaking or offshore fund shall not represent more than 1 per cent of the capital requirement (exclusive of any borrowings) of the opportunity as so identified.”,

(b) in section 739E, by substituting the following for paragraphs (a) and (b) of subsection (1):

“(a) subject to paragraph (ba), where the amount of the gain is provided by section 739D(2)(a), at the standard rate for the year of assessment in which the gain arises,

(b) subject to paragraph (ba), where the chargeable event happens on or after 1 January 2001 and the amount of the gain is provided by paragraph (b), (c), (d), (dd) or (ddd) of section 739D(2), at a rate determined by the formula—

(S + 3) per cent,

where S is the standard rate per cent (within the meaning of section 4),

(ba) where in the case of a personal portfolio investment undertaking, the chargeable event happens on or after 20 February 2007, at a rate determined by the formula—

(S + 23) per cent,

where S is the standard rate per cent (within the meaning of section 4), and”,

(c) in section 747D, by substituting the following for paragraph (a):

“(a) where the person is not a company, and—

(i) the income represented by the payment is correctly included in a return made by the person, then notwithstanding section 15, the rate of income tax to be charged on the income shall be—

(I) where the payment is a relevant payment—

(A) in the case of an offshore fund which is a personal portfolio investment undertaking, at the rate determined by the formula—

(S + 23) per cent,

where S is the standard rate per cent for the year of assessment in which the payment is made, and

(B) in any other case, the standard rate per cent,

and

(II) where the payment is not a relevant payment and is not made in consideration of the disposal of an interest in the offshore fund—

(A) in the case of an offshore fund which is a personal portfolio investment undertaking, at the rate determined by the formula—

(S + 23) per cent,

where S is the standard rate per cent for the year of assessment in which the payment is made, and

(B) in any other case, at the rate determined by the formula—

(S + 3) per cent,

where S is the standard rate per cent,

and

(ii) where the income represented by the payment is not correctly included in a return made by the person, the income shall be charged to income tax—

(I) in the case of an offshore fund which is a personal portfolio investment undertaking, at the rate determined by the formula—

(H + 20) per cent,

where H is the rate per cent determined in relation to the person by section 15 for the year of assessment in which the payment is made, and

(II) in any other case, at a rate determined by section 15,”,

and

(d) in section 747E, by substituting the following for subsection (1):

“(1) Where on or after 1 January 2001 a person who has a material interest in an offshore fund, disposes of an interest in the offshore fund and the disposal gives rise to a gain computed in accordance with subsection (2) then, notwithstanding sections 745 and 747, where the gain is not taken into account in computing the profits or gains of a trade carried on by a company, the amount of that gain shall be treated as an amount of income chargeable to tax under Case IV of Schedule D, and—

(a) where the person is a company, the rate of corporation tax to be charged on that income shall, notwithstanding section 21A(3), be the rate of income tax chargeable on income referred to in subparagraph (ii) of paragraph (b), and

(b) where the person is not a company, and the person has correctly included details of the disposal in a return made by the person, the rate of income tax to be charged on that income shall, notwithstanding section 15, be the rate determined—

(i) in the case of an offshore fund which is a personal portfolio investment undertaking, by the formula—

(S + 23) per cent,

where S is the standard rate per cent for the year of assessment in which the payment is made, and

(ii) in any other case, by the formula—

(S + 3) per cent,

where S is the standard rate per cent.”.

(2) Subsection (1) applies as respects—

(a) the occurrence of a chargeable event in relation to an investment undertaking (within the meaning of Chapter 1A of Part 27 of the Principal Act),

(b) the receipt by a person of a payment in respect of a material interest in an offshore fund (within the meaning of Chapter 4 of Part 27 of the Principal Act), and

(c) the disposal in whole or in part of a material interest in an offshore fund (within that meaning),

on or after 20 February 2007.

41 .— Section 739D of the Principal Act is amended in subsection (6)—

(a) in paragraph (j) by deleting “or”,

(b) in paragraph (k) by deleting “or 110(2)”, and

(c) by inserting the following after paragraph (k):

“(l) is the National Pensions Reserve Fund Commission and has made a declaration to that effect to the investment undertaking, or

(m) is a company that—

(i) is or will be within the charge to corporation tax in accordance with section 110(2), in respect of payments made to it by the investment undertaking, and

(ii) has made a declaration to that effect and has provided the investment undertaking with the company’s tax reference number (within the meaning of section 885),”.

42 .— (1) Section 730H of the Principal Act is amended in subsection (1)—

(a) in the definition of “relevant event” by substituting “period;” for “period, where”, and

(b) by substituting the following for the definition of “relevant period”:

“ ‘ relevant period ’ in relation to a foreign life policy means a period of 8 years beginning with the inception of the policy and each subsequent period of 8 years beginning immediately after the preceding relevant period;”.

(2) This section applies as respects any relevant event (within the meaning of section 730H(1) of the Principal Act) occurring on or after the passing of this Act in respect of a foreign life policy (within the meaning of section 730H(1) of the Principal Act) taken out on or after 1 January 2001.

43 .— (1) Chapter 5 of Part 26 of the Principal Act is amended—

(a) in section 730C(1)(a) by substituting the following for subparagraph (iv):

“(iv) the ending of a relevant period, where such ending is not otherwise a chargeable event within the meaning of this section, and for the purposes of this subparagraph ‘relevant period’, in relation to a life policy, means a period of 8 years beginning with the inception of the policy and each subsequent period of 8 years beginning immediately after the preceding relevant period,”,

(b) by substituting the following for section 730D(1A):

“730D.— (1A) (a) Where—

(i) a chargeable event occurs in relation to a life policy, and

(ii) a chargeable event within the meaning of section 730C(1)(a)(iv) occurred previously in relation to that policy,

then the gain arising on the chargeable event referred to in subparagraph (i) shall be determined as if section 730C(1)(a)(iv) had not been enacted.

(b) Where paragraph (a) applies and the chargeable event referred to in subparagraph (i) of that paragraph is not the surrender or assignment of part of the rights conferred by the life policy, any first tax (within the meaning of section 730F(1A)) shall, for the purposes of subsection (3), be added to the value of the rights or other benefits conferred by that policy immediately before the chargeable event.

(c) Where paragraph (a) applies and the chargeable event referred to in subparagraph (i) of that paragraph is the surrender or assignment of part of the rights conferred by the life policy, any first tax (within the meaning of section 730F(1A)) shall, for the purposes of subsection (3), be deducted from the amount of premiums taken into account in determining the gain on the happening of the chargeable event.”,

(c) in section 730D(3), in the construction of P, by substituting “of a chargeable event (not being a chargeable event within the meaning of section 730C(1)(a)(iv)),” for “of a chargeable event,”, and

(d) in section 730F(1A)—

(i) in the definition of “first tax” by substituting “within the meaning of section 730C(1)(a)(iv) in relation to the life policy and which has not been repaid;” for “referred to in subsection 730D(1A)(b) in relation to the life policy;”,

(ii) by substituting the following for the definition of “new gain”:

“ ‘ new gain ’, in relation to a life policy, means a gain referred to in section 730D(1A)(a) determined in accordance with section 730D in relation to the life policy;”,

(iii) in paragraph (b)(i) by substituting “section 730D(1A)(a)” for “subsection 730D(1A)”,

(iv) in paragraph (b)(ii) by deleting “, subject to subparagraph (iii)”, and

(v) by deleting subparagraph (iii) of paragraph (b).

(2) This section applies and has effect as respects any chargeable event (within the meaning of section 730C(1)(a)(iv) of the Principal Act) occurring on or after the passing of this Act.

44 .— (1) Chapter 1 of Part 33 of the Principal Act is amended—

(a) in section 806—

(i) in subsection (1), in the definition of “associated operation” by inserting “and for the purposes of this definition it is immaterial whether the operation is effected before, after, or at the same time as the transfer;” after “any such assets;”,

(ii) in subsection (2)—

(I) by deleting “and” at the end of paragraph (b) and by substituting “transferred,” for “transferred.” at the end of paragraph (c), and

(II) by inserting the following after paragraph (c):

“(d) the income that becomes payable to, or has become income of, a person resident or domiciled out of the State that is referred to in subsection (3) or (5) or in section 807A(1) includes any income which becomes payable to, or has become income of, the person by virtue or in consequence of—

(i) the transfer,

(ii) one or more associated operations, or

(iii) the transfer and one or more associated operations,

and

(e) the income which an individual has power to enjoy, as referred to in subsection (4), includes any income which that individual has power to enjoy by virtue or in consequence of—

(i) the transfer,

(ii) one or more associated operations, or

(iii) the transfer and one or more associated operations.”,

(iii) in subsection (8) by substituting “Subject to section 807B, subsections (4) and (5)” for “Subsections (4) and (5)”,

(iv) in subsection (9), by substituting “subsection (8) or (10) or section 807B or 807C” for “subsection (8)”, and

(v) by inserting the following after subsection (9):

“(10) (a) In this subsection—

‘ commercial transaction ’ does not include—

(i) a transaction on terms other than those that would have been made between independent persons dealing at arm’s length, or

(ii) a transaction that would not have been entered into between independent persons dealing at arm’s length;

‘ independent persons ’ means persons who are not connected with each other (within the meaning of section 10);

‘ relevant transactions ’ means—

(i) the transfer, and

(ii) any associated operations.

(b) Subject to section 807B, subsections (4) and (5) shall not apply by reference to the relevant transactions where the individual shows in writing or otherwise to the satisfaction of the Revenue Commissioners—

(i) that it would not be reasonable to draw the conclusion, from all the circumstances of the case, that the purpose of avoiding liability to taxation was the purpose, or one of the purposes, for which the relevant transactions or any of them were effected, or

(ii) in a case where the condition in subparagraph (i) is not met, that—

(I) all the relevant transactions were genuine commercial transactions, and

(II) it would not be reasonable to draw the conclusion, from all the circumstances of the case, that any one or more of those transactions was more than incidentally designed for the purpose of avoiding liability to taxation.

(c) The intentions and purposes of any person who, whether or not for consideration—

(i) designs or effects the relevant transactions or any of them, or

(ii) provides advice in relation to the relevant transactions or any of them,

are to be taken into account in determining the purposes for which those transactions or any of them were effected.

(d) A relevant transaction is a commercial transaction only if it is effected—

(i) in the course of a trade or business, or

(ii) with a view to setting up and commencing a trade or business,

and, in either cases, for the purposes of such trade or business.

(e) For the purposes of paragraph (d), the making and managing of investments, or the making or managing of investments, is not a trade or business except to the extent that—

(i) the person by whom it is done, and

(ii) the person for whom it is done,

are independent persons dealing at arm’s length.

(f) Any associated operation that would not (apart from this paragraph) fall to be taken into account for the purposes of this subsection shall be taken into account for those purposes if, were it to be so taken into account, the conditions in paragraph (b) would be failed by reference to—

(i) that associated operation, or

(ii) that associated operation taken together with the transfer or any one or more other associated operations.”,

(b) by inserting the following after section 807A:

“Certain transitional arrangements in relation to transfer of assets abroad.

807B.— (1) In this section—

‘ new transaction ’ means a relevant transaction effected on or after the relevant date;

‘ old transaction ’ means a relevant transaction effected before the relevant date;

‘ relevant date ’ means 1 February 2007;

‘ relevant transactions ’ has the meaning assigned to it by section 806(10).

(2) For the purposes of applying subsection (3) of this section and subsections (8) and (10) of section 806—

(a) if all the relevant transactions are old transactions, section 806(8) shall apply,

(b) if all the relevant transactions are new transactions, section 806(10) shall apply,

(c) if any one or more of the relevant transactions are old transactions and any one or more of the relevant transactions are new transactions, sections 806 and 807A shall apply subject to subsection (3).

(3) (a) Where—

(i) the conditions in section 806(8) are failed by reference to the old transactions or any of them, or

(ii) the conditions in section 806(10)(b) are failed by reference to the new transactions or any of them,

then, subject to paragraph (b), sections 806 and 807A apply as they would have applied apart from any exemption by virtue of this section or by virtue of section 806(8) or section 806(10).

(b) Where paragraph (a) applies by virtue only of subparagraph (ii) of that paragraph—

(i) for the purposes of subsection (4) or (5)(b) of section 806 any income arising before the relevant date shall not be brought into account as income of the person resident or domiciled out of the State,

(ii) for the purposes of section 807A—

(I) (A) where a benefit is received by an individual in a year of assessment ending after the relevant date, and

(B) relevant income (within the meaning of section 807A(3)) of years of assessment up to and including that year falls to be determined,

then years of assessment ending before the relevant date are to be brought into account as well as years of assessment ending after that date, and

(II) a benefit received by an individual in the year of assessment 2007 is to be left out of account to the extent that, on a time apportionment basis, it fell to be enjoyed in any part of the year that falls before the relevant date.

Supplementary provisions in relation to section 806 — apportionment in certain cases.

807C.— (1) In this section—

‘ appropriate exemption ’ means an exemption by virtue of subsection (8)(b) or (10)(b)(ii) of section 806;

‘ exempt year of assessment ’ means a year of assessment referred to in subsection (2)(b) in respect of which there was no earlier year of assessment where—

(a) the individual was liable to tax by virtue of section 806, or

(b) the individual would have been liable to tax by virtue of section 806 if there had been any deemed income of such individual under that section;

‘ relevant transactions ’ has the meaning assigned to it by section 806(10).

(2) This section applies where an individual is liable to income tax by virtue of section 806 for a year of assessment and—

(a) the individual is so liable by virtue of the conditions in section 806(10)(b)(ii) not being met,

(b) since the making of the transfer there have been one or more years of assessment where the circumstances were such that, so far as relating to such of the relevant transactions as were effected before the end of the year of assessment concerned, the individual—

(i) was not liable to tax by virtue of section 806 because an appropriate exemption applied, or

(ii) would not have been liable to tax by virtue of section 806 if there had been any deemed income of such individual under that section because an appropriate exemption would have applied,

and

(c) the income by reference to which the individual is so liable is attributable—

(i) partly to relevant transactions by reference to which the appropriate exemption applied for the last exempt year of assessment, and

(ii) partly to associated operations not falling within subparagraph (i) (in this section referred to as ‘chargeable operations’).

(3) Where this section applies, the liability of the individual shall be reduced as if it fell to be determined by reference to so much of the income as appears to the Revenue Commissioners, or such officer as the Revenue Commissioners may appoint, to be justly and reasonably attributable to chargeable operations in all the circumstances of the case.

(4) The facts and matters that may be taken into account in determining for the purposes of subsection (3) whether income may be regarded as justly and reasonably attributable to chargeable operations include whether, and to what extent, the chargeable operations or any of them directly or indirectly affect—

(a) the character, description or amount of any income of any person,

(b) any person’s power to enjoy any income, or

(c) the character, description or amount of any income which a person has power to enjoy.”,

(c) in section 807A(7), by substituting “Subsections (8), (9) and (10)” for “Subsections (8) and (9)”, and

(d) in section 808, in subsections (2) and (3)(b), by substituting “sections 806, 807, 807A, 807B, 807C and 809” for “sections 806, 807, 807A and 809” in each place where it occurs.

(2) This section has effect as respects relevant transactions (within the meaning of section 806(10)(a) of the Principal Act) on or after 1 February 2007.

45 .— (1) Section 234 of the Principal Act is amended—

(a) in subsection (1)—

(i) by inserting the following before the definition of “ income from a qualifying patent ”:

“ ‘ EEA Agreement ’ means the Agreement on the European Economic Area signed at Oporto on 2 May 1992, as adjusted by the Protocol signed at Brussels on 17 March 1993;

‘ EEA state ’ means a state which is a Contracting Party to the EEA Agreement;”,

(ii) in the definition of “ qualifying patent ” by substituting “in an EEA state;” for “in the State;”,

(b) by inserting the following after subsection (3):

“(3A) (a) Notwithstanding subsection (2) but subject to paragraphs (b) to (d), so much of the aggregate of the amounts of any income from qualifying patents arising to a person in a relevant period which would, apart from this subsection, be disregarded under subsection (2) for the purposes of income tax or corporation tax as exceeds €5,000,000 shall not be so disregarded.

(b) Where—

(i) in relation to a company, income from qualifying patents arising in a relevant period would, apart from this paragraph, be disregarded under subsection (2), and

(ii) in relation to one or more persons who are connected (within the meaning of section 10) with the company referred to in subparagraph (i), income from qualifying patents arising in that relevant period would, apart from this paragraph, be disregarded under subsection (2),

then the aggregate of the amounts of income from qualifying patents, which is to be disregarded under subsection (2), arising to the company and all of those persons in the relevant period shall not be greater than €5,000,000.

(c) Where the aggregate of the amounts of income from qualifying patents in a relevant period arising to a company and all of the persons referred to in paragraph (b) which would, apart from paragraph (b), be disregarded under subsection (2) exceeds €5,000,000, the amount of any income from qualifying patents which is to be so disregarded for the relevant period in relation to the company or any person referred to in paragraph (b) shall be—