Chapter 4

Corporation Tax

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

(a) in section 21A(3) by substituting “but subject to subsection (4) and section 21B” for “but subject to subsection (4)”, and

(b) by inserting the following section after section 21A:

“Tax treatment of certain dividends.

21B.— (1) (a) In this section—

‘ profits ’, in relation to a company for a period, means—

(i) where the profit and loss account, or income statement, of the company for that period is required to be laid before the annual general meeting of the company, the amount of profits, after taxation, as shown in that profit and loss account, or that income statement, and

(ii) in any other case, the amount of profits, after taxation, as shown in the profit and loss account, or income statement, of the company which is prepared in accordance with an accounting framework that, in the territory in which the company is incorporated, is generally accepted as presenting a fair view of the profit for that period;

‘ relevant territory ’ means—

(i) a Member State of the European Communities, or

(ii) not being such a Member State, a territory with the government of which arrangements having the force of law by virtue of section 826(1) have been made;

‘ trading profits ’, in relation to a company for a period, means the aggregate of so much of the profits of the company for that period as are, on a just and reasonable basis, attributable to—

(i) the carrying on by the company of a trade, and

(ii) the amount of dividends received by the company which are treated as trading profits by virtue of this section,

but does not include amounts attributable to profits, or to dividends received by a company which are paid out of profits, of an excepted trade (within the meaning of section 21A).

(b) For the purposes of this section—

(i) references to a company by which a dividend is paid apply only to a company that throughout the period out of the profits of which the dividend was paid was, by virtue of the law of a relevant territory, resident for the purposes of tax in such a relevant territory, and for this purpose ‘ tax ’, in relation to a relevant territory, means any tax imposed in the relevant territory which corresponds to corporation tax in the State,

(ii) so much of a dividend received by a company (in this subparagraph referred to as the ‘first-mentioned company’) which is paid by another company out of trading profits, or an amount treated by this section as trading profits, of the other company shall be treated as trading profits of the first-mentioned company,

(iii) subject to subparagraph (iv), the period out of the profits of which a dividend is paid by a company shall be—

(I) if the dividend is paid by the company for a specified period, that period,

(II) if the dividend is not paid for a specified period but is paid out of specified profits, the period in which those profits arise, or

(III) if the dividend is not paid by the company for a specified period nor out of specified profits, the last period for which accounts of the company were made up and which ended before the dividend became payable,

and

(iv) where, as respects a period identified in accordance with subparagraph (iii) or this subparagraph, the total dividend exceeds the profits available for distribution for that period, then so much of the dividend as is equal to the excess shall be treated as paid out of profits of the preceding period (other than profits of that period which were, or were treated for the purposes of this subparagraph as, previously distributed), and such period shall be treated as a period identified by subparagraph (iii) for the purposes of the further application of this subparagraph where required.

(2) For the purposes of this section—

(a) subject to paragraph (b), so much of a dividend paid by a company for a period, as bears to the amount of that dividend the same proportion as the amount of trading profits of the company for that period bears to the total profits of the company for that period, shall be treated as paid out of trading profits of the company, and

(b) a dividend received by a company (in this paragraph referred to as the ‘receiving company’) within the charge to corporation tax in the State which is paid by a company (in this paragraph referred to as the ‘paying company’) out of the profits of a period shall be treated as paid out of trading profits of the paying company for that period if—

(i) not less than 75 per cent of the total profits of the paying company for the period are trading profits, and

(ii) the value at the end of the accounting period in which the dividend is received by the receiving company of assets (other than specified assets) used by the receiving company, and each company of which the receiving company is the parent company (within the meaning of section 626B), during that period for the purposes of the carrying on by those companies of a trade or trades is not less than 75 per cent of the value at the end of that period of the assets (other than specified assets) of those companies, and for this purpose an asset shall be treated as a specified asset if it consists of—

(I) shares of one of those companies held by another of those companies, or

(II) loans made by one of those companies to another of those companies.

(3) Subject to subsection (4), this section applies as respects an accounting period of a company where the company receives a dividend chargeable under Case III of Schedule D from another company and the dividend is paid by the other company out of trading profits of the other company.

(4) Where the income of a company (in this subsection referred to as the ‘first-mentioned company’) which is chargeable under Case III of Schedule D for an accounting period of the company includes a dividend paid to the company by another company and the first-mentioned company—

(a) does not own, directly or indirectly, either alone or together with a person who is connected (within the meaning of section 10) with the first-mentioned company, more than 5 per cent of the share capital of the other company, and

(b) does not hold more than 5 per cent of the voting rights in the other company,

then the dividend shall be treated for the purposes of subsection (3) as a dividend received by the first-mentioned company which is paid by the other company out of trading profits of the other company.

(5) Where a company proves that this section applies as respects an accounting period of the company and makes a claim in that behalf, then subsection (3) of section 21A shall not apply to so much of any income of the company chargeable under Case III of Schedule D as consists of a dividend received by the company from another company if the dividend is paid by the other company out of trading profits of the other company.

(6) A claim by a company under this section as respects an accounting period of the company shall be included with the return under section 951 which falls to be made by the company for the accounting period.”,

(c) in section 243A(3)—

(i) in paragraph (a) by deleting “and” and in paragraph (b) by substituting “income, and” for “income,”, and

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

“(c) income to which section 21A(3) does not apply by virtue of section 21B,”,

(d) in section 396A(3)—

(i) in paragraph (a) by deleting “and” and in paragraph (b) by substituting “income, and” for “income,”, and

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

“(c) income to which section 21A(3) does not apply by virtue of section 21B,”,

(e) in section 420A(3)(a)—

(i) in subparagraph (i) by deleting “and” and in subparagraph (ii) by substituting “income, and” for “income,”, and

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

“(iii) income to which section 21A(3) does not apply by virtue of section 21B,”,

and

(f) in Schedule 24, by substituting the following for paragraph 9E:

“9E. (1) (a) In this paragraph—

‘ foreign company ’ means a company resident outside the State;

‘ unrelieved foreign tax ’ has the meaning assigned to it in subparagraph (2);

‘ unrelieved foreign tax in respect of specified dividends ’ has the meaning assigned to it in subparagraph (3).

(b) For the purposes of this paragraph—

(i) a dividend is a relevant dividend if it is received by a company (in this clause referred to as the ‘receiving company’) from a company which is not resident in the State (in this clause referred to as the ‘paying company’) and the paying company is related to the receiving company (within the meaning of paragraph 9B(5)(b)), and

(ii) the aggregate amount of corporation tax payable by a company for an accounting period in respect of any dividends received by the company in the accounting period from foreign companies means so much of the corporation tax that, apart from this paragraph, would be payable by the company for that accounting period as would not have been payable had those dividends not been received by the company.

(2) (a) Where, as respects a relevant dividend received in an accounting period by a company and which is charged to corporation tax in accordance with section 21A, any part of the foreign tax cannot, apart from this paragraph, be allowed as a credit against any of the Irish taxes and, accordingly, the amount of income representing the dividend is treated under paragraph 7(3)(c) as reduced by that part of the foreign tax, then 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 of the part of the foreign tax by which the income is to be treated under paragraph 7(3)(c) as reduced,

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

(b) The aggregate amount of corporation tax payable by a company for an accounting period in respect of relevant dividends received by the company in that accounting period from foreign companies shall be reduced by the unrelieved foreign tax of that accounting period.

(c) Where the unrelieved foreign tax in relation to an accounting period of a company exceeds the aggregate amount of corporation tax payable by the company for the accounting period in respect of relevant dividends received by the company in that accounting period from foreign companies, the excess shall be carried forward and treated as unrelieved foreign tax of the next succeeding accounting period, and so on for succeeding accounting periods.

(3) (a) In this subparagraph ‘ specified dividend ’ means a relevant dividend which is not charged to corporation tax in accordance with section 21A.

(b) Where, as respects a specified dividend received in an accounting period by a company, any part of the foreign tax cannot, apart from this paragraph, be allowed as a credit against any of the Irish taxes and, accordingly, the amount of income representing the dividend is treated under paragraph 7(3)(c) as reduced by that part of the foreign tax, then an amount determined by the formula—

100 — R x D

100

where—

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

D is the amount of the part of the foreign tax by which the income is to be treated under paragraph 7(3)(c) as reduced,

shall be treated for the purposes of clause (c) as unrelieved foreign tax in respect of specified dividends of that accounting period.

(c) The aggregate amount of corporation tax payable by a company for an accounting period in respect of specified dividends received by the company in that accounting period from foreign companies shall be reduced by the unrelieved foreign tax in respect of specified dividends of that accounting period.

(d) Where the unrelieved foreign tax in respect of specified dividends in relation to an accounting period of a company exceeds the aggregate amount of corporation tax payable by the company for the accounting period in respect of specified dividends received by the company in that accounting period from foreign companies, the excess shall be carried forward and treated as unrelieved foreign tax in respect of specified dividends of the next succeeding accounting period, and so on for succeeding accounting periods.”.

(2) This section shall be deemed to have applied as respects a dividend received on or after 1 January 2007.

44 .— (1) Part 13 of the Principal Act is amended—

(a) in section 434—

(i) in subsection (2) by substituting “and subject to subsection (3A) the distributions of a company” for “, the distributions of a company”, and

(ii) by inserting the following after subsection (3):

“(3A) (a) Where a close company pays a dividend, or makes a distribution, to another close company, the companies may jointly elect, by giving notice to the Collector-General in such manner as the Revenue Commissioners may require, that the dividend, or as the case may be the distribution, is to be treated for the purposes of section 440 as not being a distribution.

(b) Where notice is given in accordance with paragraph (a), the dividend, or as the case may be the distribution, shall be treated—

(i) for the purposes of section 440 as not being a distribution, and

(ii) for the purposes of subsection (5) as not being franked investment income.

(c) An election by a company under paragraph (a) as respects an accounting period shall be included with the return under section 951 which falls to be made by the company for the accounting period.”.

and

(b) in section 441(6)(a) by substituting “Subsections (2), (3), (3A), (6) and (7)” for “Subsections (2), (3), (6) and (7)”.

(2) This section applies as respects a dividend paid, or distribution made, on or after 31 January 2008.

45 .— (1) Part 24 of the Principal Act is amended—

(a) by renumbering section 697 as section 696A, and

(b) by inserting the following after section 696A (renumbered by paragraph (a)):

“Chapter 3

Profit Resource Rent Tax

Interpretation and application (Chapter 3).

696B.— (1) In this Chapter—

‘ cumulative field expenditure ’, in relation to an accounting period of a company in respect of a taxable field, means the aggregate of the taxable field expenditure of the company in respect of the taxable field—

(a) for that accounting period, and

(b) for any preceding accounting period beginning on or after 1 January 2007;

‘ cumulative field profits ’, in relation to an accounting period of a company in respect of a taxable field, means the aggregate of the net taxable field profits of the company in respect of the taxable field—

(a) for that accounting period, and

(b) for any preceding accounting period beginning on or after 1 January 2007,

after deducting the amount of any loss incurred in respect of the taxable field for any such period;

‘ net taxable field profits ’, in relation to an accounting period of a company, means the taxable field profits of the company for the accounting period after deducting the amount of corporation tax (if any) which would, apart from this Chapter, be payable by the company for the accounting period if the tax were computed on the basis of those profits;

‘ profit ratio ’, in relation to an accounting period of a company in respect of a taxable field, means an amount determined by the formula—

A

B

where—

A is the cumulative field profits of the company in respect of the taxable field in relation to that accounting period, and

B is the cumulative field expenditure of the company in respect of the taxable field in relation to that accounting period;

‘ profit resource rent tax ’ has the meaning given to it in section 696C;

‘ specified licence ’ means—

(a) an exploration licence, or a reserved area licence, that is granted on or after 1 January 2007, or

(b) a licensing option;

‘ taxable field ’ means an area in respect of which a petroleum lease entered into following on from a specified licence is in force;

‘ taxable field expenditure ’, in relation to an accounting period of a company, means the aggregate of the amounts of capital expenditure which consist of—

(a) abandonment expenditure,

(b) development expenditure, and

(c) exploration expenditure,

incurred by the company for the accounting period in respect of a taxable field;

‘ taxable field profits ’, in relation to an accounting period of a company, means the amount of the petroleum profits of the company in respect of a taxable field, after making all deductions and giving or allowing all reliefs that for the purposes of corporation tax are made from, or given or allowed against, or are treated as reducing—

(a) those profits, or

(b) income or chargeable gains, if any, included in those profits.

(2) For the purposes of this Chapter—

(a) the interpretations in section 684 shall apply, with any necessary modifications, in relation to expenditure and activities carried on under a specified licence as they would apply in relation to expenditure and activities carried on under a licence within the meaning of section 684 if such a licence was a specified licence, and

(b) capital expenditure incurred on or after 1 January 2007 by a company in an area which is not a taxable field but which subsequently becomes a taxable field (or part of such a field) shall be treated as if it had been incurred by the company on the day on which the area first becomes a taxable field (or part of such a field).

(3) (a) Where a company carries on a petroleum trade and that petroleum trade includes petroleum activities carried on under a specified licence, such activities shall, for the purposes of this Chapter, be treated in respect of each taxable field as a separate petroleum trade distinct from all other activities carried on by the company as part of the trade.

(b) For the purposes of paragraph (a), any necessary apportionment shall be made in computing taxable field profits or taxable field expenditure of a company and the method of apportionment adopted shall be such method as appears to the inspector or on appeal the Appeal Commissioners to be just and reasonable.

(c) Subject to paragraph (d) the provisions of sections 687 to 690 shall apply for the purposes of this Chapter in relation to any activities treated under paragraph (a) as a separate trade as they apply to a petroleum trade within the meaning of those sections.

(d) For the purposes of applying this Chapter, in relation to an accounting period of a company in respect of a taxable field, no account shall be taken of any charges paid, interest payable or a loss incurred—

(i) by any other company, or

(ii) by the first-mentioned company,

in respect of activities other than activities in relation to that field.

Charge to profit resource rent tax.

696C.— (1) Where for an accounting period of a company the profit ratio of the company in relation to a taxable field is equal to 1.5 or more, an additional duty of corporation tax (in this Chapter referred to as a ‘profit resource rent tax’) shall be charged on the profits of the company in accordance with the provisions of this Chapter.

(2) Profit resource rent tax shall be charged on the profits to which this Chapter applies of a company for an accounting period at the rate of—

(a) 5 per cent, where the profit ratio is less than 3,

(b) 10 per cent, where the profit ratio is equal to or greater than 3 and less than 4.5,

(c) 15 per cent, where the profit ratio is equal to or greater than 4.5.

(3) The profits to which this Chapter applies as respects any taxable field for an accounting period of a company shall—

(a) in respect of any accounting period in relation to which—

(i) the profit ratio is equal to or greater than 1.5, and

(ii) the profit ratio for the immediately preceding accounting period was less than 1.5,

be determined by the formula—

{A — (B x 1.5)} x 1010010

100 — R

where—

A is the cumulative field profits of the company in respect of the taxable field in relation to the accounting period,

B is the cumulative field expenditure of the company in respect of the taxable field in relation to the accounting period, and

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

and

(b) in respect of any other accounting period of the company, be the taxable field profits of the company in respect of the taxable field for the accounting period.

Provisions relating to groups (Chapter 3).

696D.— (1) Where taxable field expenditure in respect of a taxable field is incurred by a company (in this section referred to as the ‘first company’) and

(a) another company is a wholly-owned subsidiary of the first company, or

(b) the first company is, at the time the taxable field expenditure is incurred, a wholly-owned subsidiary of another company (in this section referred to as the ‘parent company’),

then, the expenditure or so much of it as the first company specifies, may at the election of that company be deemed to be taxable field expenditure in respect of the taxable field incurred—

(i) in the case referred to in paragraph (a), by such other company (being a wholly-owned subsidiary of the first company) as the first company specifies, and

(ii) in the case referred to in paragraph (b), by the parent company or by such other company (being a wholly-owned subsidiary of the parent company) as the first company specifies.

(2) Where under subsection (1) taxable field expenditure incurred by a first company is deemed to have been incurred by another company (in this subsection referred to as the ‘other company’)—

(a) the expenditure shall be deemed to have been incurred by the other company at the time at which the expenditure was actually incurred by the first company, and

(b) in the application of this Chapter the expenditure shall—

(i) be deemed to have been incurred by the other company for the purposes of determining the cumulative field expenditure of that company, and

(ii) be deemed not to have been incurred by the first company for the purposes of determining the cumulative field expenditure of that company.

(3) The same expenditure shall not be taken into account in relation to the determination of cumulative expenditure for more than one taxable field by virtue of this section.

(4) Subsection (5) of section 694 applies for the purposes of subsection (1) as it applies for the purposes of that subsection.

Returns (Chapter3).

696E.— (1) In this section ‘ prescribed form ’ means a form prescribed by the Revenue Commissioners or a form used under the authority of the Revenue Commissioners, and includes a form which involves the delivery of a statement by any electronic, photographic or other process approved of by the Revenue Commissioners.

(2) A company carrying on petroleum activities under a specified licence shall, in addition to the return required to be delivered under section 951, prepare and deliver to the Collector-General at the same time as, and together with, the return required under section 951 on or before the specified return date for the chargeable period a full and true statement in a prescribed form of the details required by the form in respect of—

(a) the amounts constituting the aggregate of the cumulative field expenditure for each field,

(b) the amounts constituting the aggregate of the cumulative field profits for each field,

(c) the breakdown of the amounts specified in paragraphs (a) and (b), and

(d) the amount of profit resource rent tax, if any, payable in respect of each field,

and of such further particulars in relation to this Chapter as may be required by the prescribed form.

(3) An officer of the Revenue Commissioners may make such enquiries or take such actions within his or her powers as he or she considers necessary for the purposes of determining the accuracy or otherwise of any details or particulars contained in the statement referred to in subsection (2).

(4) Subsections (9) and (10) of section 951 shall apply to a statement required to be delivered under this section as they apply to a return required to be delivered under that section, and for that purpose a reference in those subsections to a return, other than a reference to the specified return date for the chargeable period, shall be construed as a reference to a statement under this section.

(5) Section 1052 shall apply to a failure by a person to deliver a statement under this section or the details or particulars referred to in subsection (3) as it applies to a failure to deliver a return referred to in section 1052.

Collection and general provisions.

696F.— (1) The provisions of the Corporation Tax Acts relating to—

(a) assessments to corporation tax,

(b) appeals against such assessments (including the rehearing of appeals and the statement of a case for the opinion of the High Court), and

(c) the collection and recovery of corporation tax,

shall apply in relation to a profit resource rent tax charged under section 696C as they apply to corporation tax charged otherwise than under this Chapter.

(2) (a) Any amount of profit resource rent tax payable in accordance with this Chapter without the making of an assessment shall carry interest at the rate of 0.0273 per cent for each day or part of a day from the date when the amount becomes due and payable until payment.

(b) Section 1080 shall apply in relation to interest payable under paragraph (a) as it applies in relation to interest payable under section 1080.”.

(2) This section is deemed to have applied in the case of profits in respect of any petroleum lease entered into following on from a licensing option or from an exploration licence, or a reserved area licence, awarded by the Minister for Communications, Energy and Natural Resources after 1 January 2007.

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

(a) by inserting the following section after section 285:

“285A.— (1) In this section—

‘ energy-efficient equipment ’ means equipment, named on and complying with the criteria stated on the specified list, provided for the purposes of a trade and which at the time it is so provided is unused and not second-hand;

‘ relevant period ’ means the period commencing on the date on which the first order is made under subsection (4) and ending 3 years after that date;

‘ the specified list ’ means the list of energy-efficient equipment which—

(a) complies with subsections (3) and (4), and

(b) is maintained for the purposes of this section by Sustainable Energy Ireland — The Sustainable Energy Authority of Ireland;

‘ Table ’ means the Table in Schedule 4A.

(2) Subject to this section, where for any chargeable period a wear and tear allowance is to be made under section 284 to a company which has incurred capital expenditure on the provision of energy-efficient equipment for the purposes of a trade carried on by that company, section 284(2) shall apply as if the reference in paragraph (ad) of that section to 12.5 per cent were a reference to 100 per cent.

(3) The specified list shall contain only such equipment that—

(a) is in a class of technology specified in column (1) of the Table, and

(b) is of a description for that class of technology specified in column (2) of the Table.

(4) For the purposes of this section, the Minister for Communications, Energy and Natural Resources, after consultation with and the approval of the Minister for Finance—

(a) shall by order make the specified list—

(i) stating the energy efficiency criteria to be met for, and

(ii) naming the eligible products in,

each class of technology specified in column (1) of the Table, and

(b) may by order amend the specified list—

(i) stating energy efficiency criteria to be met for, or

(ii) naming eligible products in,

any class of technology specified in column (1) of the Table.

(5) Subsection (2) shall not apply—

(a) where the person to whom the allowance is to be made in accordance with section 284 is not a company, or

(b) where the energy-efficient equipment is leased, let or hired to any person.

(6) Subsection (2) shall not apply in respect of expenditure incurred in a chargeable period on the provision of energy-efficient equipment in relation to a class of technology where the amount of that expenditure is less than the minimum amount specified in column (3) of the Table in relation to that class of technology.

(7) (a) Subsection (2) shall not apply in respect of expenditure incurred on the provision of equipment where that expenditure is not incurred in the relevant period.

(b) Where—

(i) expenditure on equipment is incurred on or after 31 January 2008 but before the first order is made under subsection (4), and

(ii) that equipment would have qualified as energy-efficient equipment under this section had such an order been made at the time the expenditure was incurred,

then this section shall apply as if the order had been made at that time.

(8) Where this section applies to capital expenditure incurred by a company on the provision of energy-efficient equipment and that equipment would not, apart from this section, be treated as machinery or plant, then that equipment shall be treated as machinery or plant for the purposes of this Chapter and Chapter 4 of this Part.

(9) Any order made by the Minister for Communications, Energy and Natural Resources for the purpose of this section shall be laid before Dáil Éireann as soon as may be after it is made and, if a resolution annulling the order is passed by Dáil Éireann within the next 21 days on which Dáil Éireann has sat after the order is laid before it, the order shall be annulled accordingly, but without prejudice to the validity of anything previously done thereunder.”,

and

(b) by inserting the following after Schedule 4:

“SCHEDULE 4A

TABLE

.”.

(2) Subsection (1) comes into operation on such day or days as the Minister for Finance may by order or orders appoint and different days may be appointed for different purposes or different provisions.

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

(a) in section 958—

(i) in subsection (1)(a)—

(I) by inserting the following definitions after the definition of “pre-preceding chargeable period”:

“ ‘ relevant accounting standards ’ has the same meaning as in Schedule 17A;

‘ relevant company ’ means a company in respect of which profits or gains for the purposes of Case I or II of Schedule D are computed in accordance with relevant accounting standards, which are, or include, relevant accounting standards in relation to profits or gains or losses on financial assets or liabilities;”,

and

(II) in the definition of “ relevant limit ” by substituting “€200,000” for “€150,000”,

(ii) in subsection (4D)(b), by substituting the following for “no amount were included in the chargeable person’s profits for the chargeable period in respect of chargeable gains on the disposal by the person of assets in the part of the chargeable period which is after the date by which the first instalment for the chargeable period is payable in accordance with subsection (2A),”:

“no amount were included in the chargeable person’s profits for the chargeable period—

(i) in respect of chargeable gains on the disposal by the person of assets in the part of the chargeable period which is after the date by which, or

(ii) in the case of a relevant company, in respect of profits or gains or losses accruing, and not realised, in the chargeable period on financial assets or financial liabilities as are attributable to changes in value of those assets or liabilities in the part of the chargeable period which is after the end of the month immediately preceding the month in which,

the first instalment for the chargeable period is payable in accordance with subsection (2A),”,

and

(iii) in subsection (4E), by substituting the following for paragraph (b):

“(b) the preliminary tax so paid by the chargeable person for the chargeable period is not less than 90 per cent of the amount which would be payable by the chargeable person for the chargeable period if no amount were included in the chargeable person’s profits for the chargeable period—

(i) in respect of chargeable gains on the disposal by the person of assets in the part of the chargeable period which is after the date by which, or

(ii) in the case of a relevant company, in respect of profits or gains or losses accruing, and not realised, in the chargeable period on financial assets or financial liabilities as are attributable to changes in value of those assets or liabilities in the part of the chargeable period which is after the end of the month immediately preceding the month in which,

preliminary tax for the chargeable period is payable in accordance with subsection (2B), and”,

and

(b) by deleting subparagraph (6) of paragraph 4 of Schedule 17A.

(2) (a) Subject to paragraph (b) this section has effect for any period of account beginning on or after 1 January 2005.

(b) Subsection (1)(a)(i)(II) has effect as respects accounting periods in respect of which preliminary tax is payable after 5 December 2007.

48 .— (1) The Principal Act is amended by inserting the following section after section 176:

“176A.— (1) Subject to subsection (2), no sum shall be deducted in computing the amount of the profits or gains charged to tax under Case I or II of Schedule D in respect of any payment that is treated by virtue of section 175 or 176 as not being a distribution.

(2) Subject to section 81(2)(n), subsection (1) shall not apply to so much of any payment as consists of expenditure incurred by a company to the extent that it is incurred on shares acquired by the company and given by it as consideration for goods or services, or to an employee or director of the company.”.

(2) This section applies as respects accounting periods ending on or after 31 January 2008.

49 .— (1) Schedule 24 to the Principal Act is amended—

(a) in paragraph 4(2A) (inserted by the Finance Act 2006 ) by substituting “foreign tax in respect of any income of a company (in this subparagraph referred to as ‘that income’), being income (other than income from a trade carried on by the company through a branch or agency in a territory other than the State) which is taken into account” for “foreign tax in respect of any income of a company (in this subparagraph referred to as ‘that income’), being income which is taken into account”, and

(b) by inserting the following after paragraph 9G (inserted by the Finance Act 2006 ):

“Dividends paid out of transferred profits

9H(1) This paragraph applies in any case where—

(a) under the law of a territory outside the State, tax is paid by a company (in this paragraph referred to as the ‘first company’) resident outside the State in respect of any of its profits,

(b) some or all of those profits become profits of another company (in this paragraph referred to as the ‘second company’) resident outside the State otherwise than by virtue of the payment of a dividend to the second company, and

(c) the second company pays a dividend out of those profits to another company, wherever resident.

(2) Where this paragraph applies, then for the purposes of allowing credit under this Schedule for foreign tax in respect of profits of the first company attributable to any dividends paid—

(a) by any company (whether or not the second company) resident outside the State,

(b) to a company resident in the State,

this Schedule shall apply with any necessary modifications as if the second company had paid the tax paid by the first company in respect of those profits of the first company which have become profits of the second company in accordance with subparagraph (1)(b).

(3) Subparagraphs (1) and (2) are subject to the following limitations—

(a) the credit against corporation tax allowable to a company resident in the State shall not exceed the amount which would have been allowable to that company had those profits become profits of the second company by virtue of the payment of a dividend by the first company to the second company, and

(b) no tax shall be taken into account in respect of profits referred to in subparagraph (1) where such profits become the profits of the second company by virtue of a scheme or arrangement the purpose or one of the main purposes of which is the avoidance of tax.”.

(2) (a) (i) Subject to subparagraph (ii)(1)(a) applies as on and from 31 January 2008.

(ii) Subsection (1)(a) shall be deemed to have applied as respects any company as on and from 1 January 2006, if an election in writing is made by the company to the Revenue Commissioners to that effect.

(b) Subsection (1)(b) applies to dividends paid on or after 31 January 2008.

50 .— (1) Section 766 of the Principal Act is amended in subsection (1)(a) in the definition of “threshold amount”—

(a) in paragraph (i) by substituting “1 January 2014” for “1 January 2010”, and

(b) in paragraph (ii) by substituting “10 years” for “3 years”.

(2) This section applies to accounting periods commencing on or after 1 January 2008.

51 .— (1) The Principal Act is amended by inserting the following after section 591—

“591A.— (1) For the purposes of this section, a dividend paid, or a distribution made, by a company to a person in respect of shares or securities of the company in connection with a disposal of shares in the company shall be treated as being abnormal if the amount or value of the dividend, or as the case may be the distribution, exceeds the amount that could reasonably have been expected to be paid, or as the case may be made, in respect of the shares or securities of the company if there were no such disposal of the shares or securities.

(2) Where, in connection with the disposal by a person of any shares or securities of a company, there exists any scheme, arrangement or understanding by virtue of which, either directly or indirectly, an abnormal dividend is paid, or an abnormal distribution is made—

(a) where the person is a company, to that person or to any company connected (within the meaning of section 10) with that person, and

(b) where the person is not a company, to any company connected (within the meaning of section 10) with the person,

then, for the purposes of the Capital Gains Tax Acts, the amount or value of the dividend paid, or distribution made, to the person or, as the case may be, to the connected person, shall be treated as consideration received by the person for the disposal of the shares or securities, and shall be ignored for the purposes of the Tax Acts.

(3) Subsection (2) does not apply if it is shown that the scheme, arrangement or understanding is effected for bona fide commercial reasons and is not, or does not form part of, any scheme, arrangement or understanding of which the main purpose or one of the main purposes is avoidance of liability to tax.”.

(2) This section applies as respects a dividend paid, or a distribution made, on or after 19 February 2008.

52 .— (1) Schedule 4 to the Principal Act is amended by inserting the following after paragraph 26:

“26A. Commission for Communications Regulation.”.

(2) Subsection (1) is deemed to have come into force and have taken effect as on and from 1 December 2002.

53 .— (1) Section 448 of the Principal Act is amended—

(a) by substituting the following for paragraph (b) of subsection (3):

“(b) then deducting from the relevant sum any amounts allowed under sections 243A, 396A or 420A against the company’s income for the relevant accounting period from the sale of those goods.”,

and

(b) by substituting the following for subsection (5A):

“(5A) Where any part of the profits of an accounting period of a company is charged to corporation tax in accordance with section 21A, then for the purposes of this section, the relevant corporation tax shall be reduced by an amount determined by the formula—

1R0 x S

100

where—

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

S is an amount equal to so much of the profits of the company for the accounting period as are charged to tax in accordance with section 21A.

(5B) Notwithstanding section 4(4)(b), the income of a company, referred to in the expression ‘total income brought into charge to corporation tax’, for the accounting period for the purposes of subsection (2) shall be the sum determined by section 4(4)(b) for that period reduced—

(a) by any amounts allowed under sections 243A, 396A or 420A, and

(b) by an amount equal to so much of the profits of the company for the accounting period as are charged to tax in accordance with section 21A.”.

(2) (a) Subsection (1)(a) has effect for accounting periods ending on or after 18 February 2008.

(b) Subsection (1)(b) shall be deemed to have had effect for accounting periods ending on or after 31 January 2007.