Chapter 5

Corporation Tax

31 .— (1) The Principal Act is amended by inserting the following after section 486B—

“486C.— (1) (a) In this section—

‘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, other than the State, which is a Contracting Party to the EEA Agreement;

‘ excepted trade ’ has the same meaning as in section 21A;

‘ net chargeable gains ’ means chargeable gains less allowable losses;

‘ new company ’ means a company incorporated in the State or in an EEA State other than the State on or after 14 October 2008;

‘qualifying assets’, in relation to a qualifying trade, means relevant assets of the qualifying trade which are disposed of in the relevant period in relation to that trade;

‘qualifying trade’ has the meaning assigned to it in subsection (2);

‘relevant asset’, in relation to a qualifying trade means, an asset (including goodwill but not including shares or securities or other assets held as investments) which is, or is an interest in, an asset used for the purposes of that trade other than an asset on the disposal of which no gain accruing would be a chargeable gain or an asset the consideration for the acquisition of which is determined by section 617 or section 631;

‘ relevant corporation tax ’, in relation to an accounting period, means the corporation tax which, apart from this section, sections 239, 241, 440, 441, 644B and 827 and paragraph 18 of Schedule 32, would be chargeable for the accounting period exclusive of—

(i) the corporation tax chargeable on the profits of the company attributable to chargeable gains for that period, and

(ii) the corporation tax chargeable on the part of the company’s profits which are charged to tax at the rate specified in section 21A;

‘ relevant period ’, in relation to a qualifying trade, means the period beginning on the day the company commences to carry on the qualifying trade and ending 3 years after that date;

‘ total corporation tax ’, in relation to an accounting period, means the corporation tax which, apart from this section, sections 239 and 241 would be chargeable for the accounting period;

‘ trade ’ means a trade the profits or gains of which are charged to tax under Case I of Schedule D.

(b) For the purposes of this section, the profits of a company attributable to chargeable gains for an accounting period shall be taken to be the amount of its profits for that period on which corporation tax falls finally to be borne exclusive of the part of the profits attributable to income. That part shall be taken to be the amount brought into the company’s profits for that period for the purposes of corporation tax in respect of income after any deduction for charges on income, expenses of management or other amounts which can be deducted from or set against or treated as reducing profits of more than one description.

(2) (a) In this section ‘ qualifying trade ’ means a trade which is set up and commenced by a new company in 2009 other than a trade—

(i) which was previously carried on by another person and to which the company has succeeded,

(ii) the activities of which were previously carried on as part of another person’s trade or profession,

(iii) which is an excepted trade, or

(iv) the activities of which if carried on by a close company with no other source of income, would result in that company being a service company for the purposes of section 441.

(b) Where a trade consists partly of excepted operations and partly of other operations or activities, then section 21A(2) shall apply for the purposes of this section as it applies for the purposes of section 21A.

(3) Where a company carries on a qualifying trade in an accounting period falling partly within the relevant period in relation to that qualifying trade, then the income from the qualifying trade for that accounting period shall, for the purpose of this section, be the amount of the income of the qualifying trade for that part of the accounting period and the amount of the income of the qualifying trade for that part shall be determined as if that part were a separate accounting period.

(4) (a) Where an accounting period of a company falls wholly or partly within a relevant period in relation to a qualifying trade and the total corporation tax payable by the company for that accounting period does not exceed the lower relevant maximum amount, then—

(i) corporation tax payable by the company for that accounting period, so far as it is referable to income from the qualifying trade for that accounting period, and

(ii) corporation tax payable by the company so far as it is referable to chargeable gains on the disposal of qualifying assets in relation to the trade,

shall be reduced to nil.

(b) Where an accounting period of a company falls wholly or partly within a relevant period in relation to a qualifying trade and the total corporation tax payable by the company for that accounting period exceeds the lower relevant maximum amount but does not exceed the upper relevant maximum amount, then the aggregate of corporation tax payable by the company for that accounting period so far as it is referable to income from the qualifying trade for that accounting period and corporation tax payable by the company for that accounting period so far as it is referable to chargeable gains on the disposal of qualifying assets in relation to the trade, shall be reduced to an amount determined by the following formula:

3 [html] (T — M) [html] A + B

T

where—

T is the total corporation tax payable by the company for that accounting period,

M is the lower relevant maximum amount,

A is the corporation tax payable by the company for the accounting period so far as is referable to income from the qualifying trade for that accounting period, and

B is the corporation tax payable by the company for that accounting period so far as is referable to chargeable gains on the disposal of qualifying assets of the qualifying trade.

(c) For the purposes of this subsection, the corporation tax referable to income from a qualifying trade in an accounting period is such an amount as bears to the relevant corporation tax the same proportion as the income from the qualifying trade bears to the total income brought into charge to corporation tax for that accounting period.

(d) For the purposes of this subsection, the corporation tax referable to chargeable gains on the disposal of qualifying assets is such amount as bears to the corporation tax payable on the profits of the company attributable to the chargeable gains for the accounting period the same proportion as the net chargeable gains on qualifying assets disposed of in the accounting period bears to net chargeable gains on all chargeable assets disposed of in the accounting period.

(5) Subject to subsection (6), the lower relevant maximum amount and the upper relevant maximum amount mentioned in subsection (4) are €40,000 and €60,000 respectively.

(6) For an accounting period of less than 12 months the relevant maximum amounts determined in accordance with subsection (5) shall be proportionately reduced.

(7) The aggregate of all reductions in corporation tax to which a company is entitled under subsection (4) in respect of a qualifying trade, the activities of which consist wholly or mainly of the conveyance by road of persons or goods or the haulage by road of other vehicles, shall not exceed €100,000.

(8) (a) Where, on a person ceasing to carry on a trade or part of a trade, a company (in this subsection referred to as the ‘successor’) begins—

(i) to carry on the activities of the trade as part of its trade, or

(ii) to carry on the activities of that part as part of its trade,

then that part of the trade carried on by the successor shall for the purposes of this section be treated as a separate trade.

(b) Where under paragraph (a) any activities of a company’s trade are to be treated as a separate trade, then any necessary apportionment shall be made of receipts or expenses.

(9) 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) is the sum determined by section 4(4)(b) for that period reduced 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.

(10) Where in an accounting period a company transfers to a connected person part of a qualifying trade, then the company shall not be entitled to relief under this section in respect of that trade for that or any subsequent accounting periods.

(11) Where a company is entitled to relief under this section in respect of any accounting period, then it shall specify the amount of relief due in its return required under section 951 for that accounting period.”.

(2) This section comes into operation on such day as the Minister for Finance may appoint by order.

32 .— (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—

(i) the amount of any charges on income paid for the purposes of the sale of goods in the relevant accounting period,

(ii) the amount of any loss from the sale of goods incurred by the company in the relevant accounting period, and

(iii) the amount of any excess of charges on income paid for the purpose of the sale of goods or the amount of any loss from the sale of goods, incurred by a surrendering company and allowed under section 420A,

allowed against income of the trade in the relevant accounting period.”,

and

(b) by substituting the following for paragraph (a) of subsection (5B) (inserted by the Finance Act 2008 ):

“(a) by any amounts in respect of—

(i) any charges on income paid for the purposes of the sale of goods in the relevant accounting period,

(ii) any loss from the sale of goods incurred by the company in the relevant accounting period, and

(iii) any excess of charges on income paid for the purpose of the sale of goods or the amount of any loss from the sale of goods, incurred by a surrendering company and allowed under section 420A,

allowed against income of the trade in the relevant accounting period, and”.

(2) This section has effect for accounting periods ending on or after 20 November 2008.

33 .— The Principal Act is amended—

(a) in the definition of “ relevant territory ” in section 21B(1)(a)—

(i) in subparagraph (i) by deleting “or” and in subparagraph (ii) by substituting “have been made, or” for “have been made;”, and

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

“(iii) not being a territory referred to in subparagraph (i) or (ii), a territory with the government of which arrangements have been made which on completion of the procedures set out in section 826(1) will have the force of law;”,

(b) in the definition of “ relevant territory” in section 153(1)—

(i) in paragraph (a) by deleting “or” and in paragraph (b) by substituting “have been made, or” for “have been made;”, and

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

“(c) not being a territory referred to in paragraph (a) or (b), a territory with the government of which arrangements have been made which on completion of the procedures set out in section 826(1) will have the force of law;”,

(c) in the definition of “ relevant territory ” in section 172A(1)(a)—

(i) in subparagraph (i) by deleting “or” and in subparagraph (ii) by substituting “have been made, or” for “have been made;”, and

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

“(iii) not being a territory referred to in subparagraph (i) or (ii), a territory with the government of which arrangements have been made which on completion of the procedures set out in section 826(1) will have the force of law;”,

(d) in the definition of “ relevant territory ” in section 198(1)(a)—

(i) in subparagraph (i) by deleting “or” and in subparagraph (ii) by substituting “have been made, or” for “have been made;”, and

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

“(iii) not being a territory referred to in subparagraph (i) or (ii), a territory with the government of which arrangements have been made which on completion of the procedures set out in section 826(1) will have the force of law;”,

(e) in the definition of “ relevant territory ” in section 246(1)—

(i) in paragraph (a) by deleting “or” and in paragraph (b) by substituting “have been made, or” for “have been made;”, and

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

“(c) not being a territory referred to in paragraph (a) or (b), a territory with the government of which arrangements have been made which on completion of the procedures set out in section 826(1) will have the force of law;”,

(f) in section 452—

(i) by inserting in subsection (1)(a) the following after “section 826(1)” in the definition of “ arrangements ”:

“or arrangements made with the government of a territory which on completion of the procedures set out in section 826(1) will have the force of law”,

and

(ii) by inserting in subsection (1)(b)(i) “and have effect in accordance with the provisions of those arrangements” after “have been made”,

(g) in the definition of “ relevant territory ” in section 626B(1)(a)—

(i) in subparagraph (i) by deleting “or” and in subparagraph (ii) by substituting “have been made, or” for “have been made;”, and

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

“(iii) not being a territory referred to in subparagraph (i) or (ii), a territory with the government of which arrangements have been made which on completion of the procedures set out in section 826(1) will have the force of law;”,

and

(h) in paragraph 9F of Schedule 24 by inserting the following after clause (b) of subparagraph (1):

“(c) (i) In this clause ‘arrangements’ means arrangements made with the government of a territory which on completion of the procedures set out in section 826(1) will have the force of law.

(ii) A territory not otherwise within subparagraph (1)(b)(i)(II) shall for the purposes of this paragraph be so treated if it is a territory with the government of which arrangements have been made.”.

34 .— (1) The Principal Act is amended in section 766—

(a) in subsection (1)(a) by substituting the following for the definition of “ threshold amount ”:

“ ‘threshold amount’, in relation to a relevant period of a group of companies, means the aggregate of the amounts of expenditure on research and development incurred in the period of one year ending on a date in the year 2003, which corresponds with the date on which the relevant period ends by all companies which are members of the group in the threshold period, in relation to the relevant period concerned: but expenditure incurred by a company which is a member of the group for a part of the threshold period shall only be included in the threshold amount if the expenditure is incurred at a time when the company is a member of the group;”,

(b) in subsection (2) by substituting “25 per cent” for “20 per cent”,

(c) in subsection (4) by deleting “Where” and substituting “Subject to subsections (4A) and (4B), where”,

(d) by inserting the following after subsection (4):

“(4A) (a) Where as respects any accounting period of a company the amount by which the company is entitled to reduce corporation tax of the accounting period exceeds the corporation tax of the company for the accounting period, the company may make a claim requiring the corporation tax of the preceding accounting period ending within the time specified in paragraph (b) to be reduced by the amount of the excess.

(b) The time referred to in paragraph (a) shall be a time immediately preceding the accounting period first mentioned in that paragraph, equal in length to that accounting period, but the amount of the reduction which may be made under paragraph (a) in the corporation tax of an accounting period falling partly before that time shall not exceed the corporation tax referable to the part of those profits proportionate to the part of the period falling within that time.

(4B) (a) Where a claim under subsection (4A)(a) has been made, and the amount of the excess referred to in subsection (4A)(a) exceeds the corporation tax of the preceding accounting periods ending within the time specified in subsection (4A)(b) or where no corporation tax arises for those preceding accounting periods, the company may make a claim to have any excess remaining paid to the company by the Revenue Commissioners.

(b) Subject to section 766B, on receipt of a claim the Revenue Commissioners shall pay any excess remaining to the company, in 3 instalments—

(i) the first instalment shall be paid by the Revenue Commissioners not earlier than the date provided for in paragraph (b) of the definition of ‘specified return date for the chargeable period’ as defined in section 950(1), for the accounting period in which the expenditure on research and development was incurred and shall equal 33 per cent of the excess remaining,

(ii) in respect of the second instalment—

(I) the excess remaining, as reduced by the first instalment under subparagraph (i), shall be first treated as an amount by which the corporation tax of the accounting period next succeeding the accounting period in which the expenditure giving rise to the claim under this subsection was incurred, is reduced in accordance with subsection (4), and

(II) the second instalment shall be paid by the Revenue Commissioners not earlier than 12 months immediately following the date referred to in subparagraph (i) and shall equal 50 per cent of the amount by which the excess remaining is reduced by the aggregate of the first instalment under subparagraph (i) and the amount treated as reducing the corporation tax of an accounting period under clause (I),

and

(iii) in respect of the last instalment—

(I) the excess remaining, as reduced by the first and second instalments and by the amount treated as reducing the corporation tax of an accounting period under clause (I) of subparagraph (ii), shall be first treated as an amount by which the corporation tax of the accounting period next succeeding the accounting period referred to in clause (I) of subparagraph (ii) is reduced in accordance with subsection (4), and

(II) the last instalment shall be paid by the Revenue Commissioners not earlier than 24 months immediately following the date referred to in subparagraph (i) and shall equal the amount by which the excess remaining is reduced by the first and second instalments and by the total of the amounts by which the corporation tax of an accounting period is reduced under clause (I) of subparagraph (ii) and under clause (I) of this subparagraph.”,

(e) by substituting for subsection (5):

“(5) Any claim under this section shall be made within 12 months from the end of the accounting period in which the expenditure on research and development, giving rise to the claim, is incurred.”,

and

(f) by inserting the following after subsection (7):

“(7A) Any amount payable by virtue of subsection (4B) shall not be income of the company or another company for any tax purpose.

(7B) Any amount payable by the Revenue Commissioners to the company or another company by virtue of subsection (4B) shall be deemed to be an overpayment of corporation tax, for the purposes only of section 1006A (2).”.

(2) (a) Paragraph (e) of subsection (1) applies to claims under section 766 of the Principal Act made on or after 1 January 2009.

(b) Except where otherwise expressly provided, this section applies to expenditure incurred in accounting periods commencing on or after 1 January 2009.

35 .— (1) The Principal Act is amended in section 766A—

(a) in subsection (1)(a)—

(i) by inserting the following definition before the definition of “ refurbishment ” :

“ ‘ qualifying building ’ means a building or structure, which is to be used for the purpose of the carrying on by the company of research and development activities in a relevant Member State, where, for the specified relevant period in relation to that building or structure, the proportion of use of the building or structure attributable to the research and development activities carried on by the company, as calculated in accordance with subsection (6), is not less than 35 per cent;”,

(ii) in the definition of “ relevant expenditure ” by substituting “qualifying building” for “building or structure which is to be used wholly and exclusively for the purpose of the carrying on by the company of research and development activities in a relevant Member State”, and

(iii) by inserting the following definitions after the definition of “relevant expenditure”:

“ ‘ specified relevant expenditure ’ means the same proportion of relevant expenditure as the research and development activities carried on in the qualifying building by the company for the specified relevant period bears to the total of all activities carried on by the company in that building for that period;

‘ specified relevant period ’ means—

(i) in the case of the construction of a qualifying building, the period of 4 years, commencing with the date on which the building or structure is first brought into use for the purposes of a trade,

(ii) in the case of the refurbishment of a qualifying building, the period of 4 years, commencing with the date on which the refurbishment is completed or, such earlier period of 4 years, as the company may elect, beginning not earlier than the date on which the refurbishment commences;”,

(b) by substituting for subsection (2):

“(2) Where in an accounting period a qualified company incurs relevant expenditure, the corporation tax of the company for that accounting period shall be reduced by an amount equal to 25 per cent of the specified relevant expenditure.”,

(c) by substituting for subsection (3):

“(3) Where—

(a) in an accounting period a company incurs relevant expenditure on a building or structure,

(b) in relation to that expenditure the corporation tax of the company or another company is reduced under subsection (2) or (4A), or a payment has been made to the company or another company by the Revenue Commissioners by virtue of subsection (4B), and

(c) at any time in the period of 10 years commencing at the beginning of that accounting period the building or structure is sold or ceases to be used by the company for the purpose of research and development activities or for the purpose of the same trade that was carried on by the company at the beginning of the specified relevant period, in connection with which the research and development activities were carried on,

then the company—

(i) and in relation to that expenditure, another company, shall not be entitled to reduce corporation tax under subsection (2) for any accounting period ending after the time specified in paragraph (c), and

(ii) shall be charged to tax under Case IV of Schedule D for the accounting period in which the building or structure is sold or ceases to be used for the purpose of research and development activities or for the purpose of the trade, in an amount equal to 4 times the aggregate amount by which, in respect of the company or in relation to that expenditure, another company, the corporation tax payable is reduced under subsections (2), (4) and (4A), and payments are made under subsection (4B).”,

(d) in subsection (4)(a) by inserting “and subsections (4A) and (4B),” after “(c)”,

(e) by inserting the following after subsection (4):

“(4A) (a) Where as respects any accounting period of a company the amount by which the company is entitled to reduce corporation tax of the accounting period exceeds the corporation tax of the company for the accounting period, the company may make a claim requiring the corporation tax of the preceding accounting periods ending within the time specified in paragraph (b) to be reduced by the amount of the excess.

(b) The time referred to in paragraph (a) shall be a time immediately preceding the accounting period first mentioned in that paragraph, equal in length to that accounting period, but the amount of the reduction which may be made under that paragraph in the corporation tax of an accounting period falling partly before that time shall not exceed the corporation tax referable to the part of those profits proportionate to the part of the period falling within that time.

(4B) (a) Where a claim under subsection (4A)(a) has been made, and the amount of the excess referred to in subsection (4A)(a) exceeds the corporation tax of the preceding accounting periods ending within the time specified in subsection (4A)(b) or where no corporation tax arises for those preceding accounting periods, the company may make a claim to have any excess remaining paid to the company by the Revenue Commissioners.

(b) Subject to section 766B, on receipt of a claim the Revenue Commissioners shall pay any excess remaining to the company, in 3 instalments—

(i) the first instalment shall be paid by the Revenue Commissioners not earlier than the date provided for in paragraph (b) of the definition of ‘specified return date for the chargeable period’ as defined in section 950(1), for the accounting period in which the expenditure on research and development was incurred and shall equal 33 per cent of the excess remaining,

(ii) in respect of the second instalment—

(I) the excess remaining, as reduced by the first instalment under subparagraph (i), shall be first treated as an amount by which the corporation tax of the accounting period next succeeding the accounting period in which the expenditure giving rise to the claim under this subsection was incurred, is reduced in accordance with subsection (4), and

(II) the second instalment shall be paid by the Revenue Commissioners not earlier than 12 months immediately following the date referred to in sub- subparagraph (i) and shall equal 50 per cent of the amount by which the excess remaining is reduced by the aggregate of the first instalment under subparagraph (i) and the amount treated as reducing the corporation tax of an accounting period under clause (I),

and

(iii) in respect of the last instalment—

(I) the excess remaining, as reduced by the first and second instalments and by the amount treated as reducing the corporation tax of an accounting period under clause (I) of subparagraph (ii), shall be first treated as an amount by which the corporation tax of the accounting period next succeeding the accounting period referred to in clause (I) of subparagraph (ii) is reduced in accordance with subsection (4), and

(II) the last instalment shall be paid by the Revenue Commissioners not earlier than 24 months immediately following the date referred to in subparagraph (i) and shall equal the amount by which the excess remaining is reduced by the first and second instalments and by the total of the amounts by which the corporation tax of an accounting period is reduced under clause (I) of subparagraph (ii) and under clause (I) of this subparagraph.”,

(f) by substituting for subsection (5):

“(5) Any claim under this section shall be made within 12 months from the end of the accounting period in which the relevant expenditure, giving rise to the claim, is incurred.”,

and

(g) by inserting the following after subsection (5):

“(6) (a) Where expenditure is incurred by a company on a building or structure and the building or structure will not be used by the company wholly and exclusively for the purposes of research and development, the proportion of the use of the building or the amount of the expenditure, attributable to research and development shall be such portion of the use of the building or the expenditure as appears to the inspector (or on appeal the Appeal Commissioners) to be just and reasonable.

(b) Where, at any time, any apportionment referred to in paragraph (a), or a further apportionment made under this paragraph, ceases to be just and reasonable, then—

(i) such further apportionment shall be made at that time as appears to the inspector (or on appeal the Appeal Commissioners) to be just and reasonable,

(ii) any such further apportionment shall supersede any earlier apportionment, and

(iii) any such adjustments, assessments or repayments of tax shall be made as are necessary to give effect to any apportionment under this subsection.

(7) Any amount payable by virtue of subsection (4B) shall not be income of the company or another company, for any tax purpose.

(8) Any amount payable by the Revenue Commissioners to the company or another company by virtue of subsection (4B) shall be deemed to be an overpayment of corporation tax, for the purposes only of section 1006A (2).”.

(2) (a) Paragraph (f) of subsection (1) applies to claims under section 766A of the Principal Act made on or after 1 January 2009.

(b) Except where otherwise expressly provided, this section 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.

36 .— The Principal Act is amended in Part 29 by inserting the following after section 766A:

“Limitation of tax credits to be paid under section 766 or 766A.

766B.— (1) In this section ‘ payroll liabilities ’ means—

(a) the amount of income tax which the company is required, by or under Chapter 4 of Part 42, to remit to the Collector-General for that period in respect of emoluments, as defined in section 983, paid to, or on account of, all employees and directors,

(b) the amount of Pay Related Social Insurance Contributions in respect of the reckonable earnings and reckonable emoluments of all directors and employees which the company is required to remit to the Collector-General for that period by or under the Social Welfare Acts, and

(c) any other levies the company is required to remit to the Collector-General, for that period, in respect of directors and employees.

(2) For the purpose of subsection (1), Pay Related Social Insurance includes Pay Related Social Insurance Contributions payable under the Social Welfare Acts, Health Contributions payable under the Health Contributions Act 1979 , and levies payable under the National Training Fund Act 2000 .

(3) Where in respect of expenditure in an accounting period a company makes a claim under section 766(4B) or 766A(4B), then the aggregate amount payable by the Revenue Commissioners to that company under those sections shall not exceed the greater of—

(a) the aggregate of the corporation tax paid by the company in respect of accounting periods ending in the 10 years immediately preceding the time specified in subsection (4A)(b) of section 766, in relation to the accounting period in which the expenditure was incurred, as reduced by any amounts payable to the company in respect of claims made under section 766(4B) or 766A(4B), as the case may be, in respect of expenditure in a previous accounting period, or

(b) the aggregate of the amounts payable by the company in respect of payroll liabilities for the accounting period in which the expenditure was incurred.”.

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

(a) in section 285A by inserting the following after subsection (8):

“(8A) (a) Notwithstanding Part 11C, where an allowance is increased under this section in respect of expenditure incurred in a chargeable period on the provision of any vehicle (being a vehicle to which subsection (1) of section 380K relates) in relation to the class of technology described in column (1) of the Table as ‘Electric and Alternative Fuel Vehicles’, then subsection (2) shall apply as if the reference in paragraph (ad) of section 284(2) to the actual cost were a reference to the lower of the actual cost of the vehicle or the specified amount referred to in section 380K(4).

(b) Subsection (2) shall not apply where an allowance in respect of expenditure incurred on the provision of a vehicle referred to in paragraph (a) is made under section 284(2) as applied by section 380L.”,

(b) in section 380K(1) by inserting “, but this Part shall not apply where an allowance for a vehicle is increased under section 285A” after “so used”, and

(c) by substituting the following for Schedule 4A (inserted by the Finance Act 2008 ):

“SCHEDULE 4A

TABLE

”.

(2) This section 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.

38 .— (1) Section 958 of the Principal Act is amended—

(a) in subsection (1)—

(i) in paragraph (a)—

(I) by inserting the following definition after “ corres ponding corporation tax for the preceding chargeable period ”:

“ ‘ corresponding income tax for the preceding chargeable period ’, in relation to a chargeable period which is an accounting period of a company, means an amount determined by the formula—

I x C

P

where—

I is the income tax payable under section 239 or 241 by the chargeable person for the preceding chargeable period,

C is the number of days in the chargeable period, and

P is the number of days in the preceding chargeable period;”,

(II) by substituting the following for the definition of “ tax payable for the initial period ”:

“ ‘ tax payable for the initial period ’, in relation to a chargeable period which is—

(I) a year of assessment for capital gains tax (being the years of assessment 2003 to 2008 inclusive), means the tax which would be payable by the chargeable person if the year of assessment ended on 30 September in that year instead of 31 December in that year, or

(II) a year of assessment for capital gains tax (being the year of assessment 2009 or any subsequent year of assessment), means the tax which would be payable by the chargeable person if the year of assessment ended on 30 November in that year instead of 31 December in that year;”,

and

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

“ ‘ relevant accounting period ’ shall be construed in accordance with paragraph (c);”, and

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

“(c) (i) Subject to subparagraph (ii), a relevant accounting period shall mean an accounting period of a company, other than a small company, which commences on or after 14 October 2008.

(ii) An accounting period shall not be a relevant accounting period where, but for this subparagraph, the final instalment of preliminary tax would, by reason of the dates on which the accounting period commences and ends, be due and payable in accordance with subsection (2BA)(c) on or before the date on which the initial instalment would be due and payable in accordance with subsection (2BA)(b).”,

(b) in subsection (2B)—

(i) in paragraph (a), by substituting “Subject to subsection (2BA), preliminary tax” for “Preliminary tax”, and

(ii) in paragraph (c), by substituting “subsections (4C) and (4CA)” for “subsections (4C) and (4E)”,

(c) by inserting the following after subsection (2B):

“(2BA) (a) Preliminary tax appropriate to a chargeable period which is a relevant accounting period shall be due and payable in 2 instalments.

(b) The first of the 2 instalments referred to in paragraph (a) (in this section referred to as the ‘initial instalment’) shall be due and payable within a period of 6 months from the commencement of the accounting period, but in any event the initial instalment shall be due and payable not later than day 21 of the month in which that period of 6 months ends.

(c) The second of the 2 instalments referred to in paragraph (a) (in this section referred to as the ‘final instalment’) shall be due and payable not later than the day which is 31 days before the day on which the accounting period ends, but where that day is later than day 21 of the month in which the first-mentioned day occurs, the final instalment shall be due and payable not later than day 21 of that month.”,

(d) in subsection (2C)—

(i) in paragraph (b), by inserting “Subject to paragraph (c), references” for “References”, and

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

“(c) References in this Part to the due date for the payment of the initial instalment, or the final instalment, of preliminary tax shall, in the case where that tax is due for a chargeable period which is a relevant accounting period, be construed in accordance with subsection (2BA).”,

(e) in subsection (3)(a)—

(i) by substituting “Subject to subsections (3A), (4), (4B), (4C), (4CA), (4D), (4E), (4F) and (4G)” for “Subject to subsections (3A), (4), (4B), (4C), (4D) and (4E)”, and

(ii) in subparagraph (v) by substituting the following for clause (I):

“(I) as respects tax payable for the initial period—

(A) where the initial period falls in the years of assessment 2003 to 2008 inclusive, on or before 31 October in the year of assessment, and

(B) where the initial period falls in the year of assessment 2009 or any subsequent year of assessment, on or before 15 December in that year of assessment, and”,

(f) in subsection (4C)—

(i) by substituting “Subject to subsections (2B)(c), (4CA), (4E), (4F), (4G) and (11)” for “Subject to subsections (2B)(c), (4E) and (11)”, and

(ii) in paragraph (b)(i), by substituting the following for clause (II):

“(II) the sum of the corresponding corporation tax for the preceding chargeable period and the corresponding income tax for the preceding chargeable period,”,

(g) by inserting the following after subsection (4C):

“(4CA) (a) Subject to subsections (2B)(c), (4E), (4F), (4G) and (11), where but for this subsection tax payable by a chargeable person for a chargeable period which is a relevant accounting period would be due and payable in accordance with subsection (3), and—

(i) the chargeable person has defaulted in the payment of the initial instalment or final instalment of preliminary tax for the chargeable period,

(ii) the initial instalment of preliminary tax paid by the chargeable person for the chargeable period is less than, or less than the lower of—

(I) 45 per cent of the tax payable by the chargeable person for the chargeable period, or

(II) 50 per cent of the sum of the corresponding corporation tax for the preceding chargeable period and the corresponding income tax for the preceding chargeable period,

(iii) where the chargeable period commenced on the company coming within the charge to corporation tax, the initial instalment of preliminary tax paid by the chargeable person for the chargeable period is less than 45 per cent of the tax payable by the chargeable person for the chargeable period,

(iv) the aggregate of the initial instalment and the final instalment of preliminary tax paid by the chargeable person for the chargeable period is less than 90 per cent of the tax payable by the chargeable person for the chargeable period, or

(v) the initial instalment or the final instalment of preliminary tax payable by the chargeable person for the chargeable period was not paid by the date on which it was due and payable,

then the tax payable by the chargeable person for the chargeable period shall be deemed to have been due and payable in accordance with paragraph (b).

(b) (i) Tax due and payable in accordance with this paragraph by a chargeable person for a chargeable period which is a relevant accounting period shall be due and payable in 2 instalments.

(ii) The first of the 2 instalments referred to in subparagraph (i) (in this paragraph and in paragraphs (c) and (d) referred to as the ‘initial relevant instalment’) shall be due and payable not later than the day on which the initial instalment of preliminary tax is due and payable in accordance with subsection (2BA).

(iii) The second of the 2 instalments referred to in subparagraph (i) (in this paragraph and in paragraph (d) referred to as the ‘final relevant instalment’) shall be due and payable not later than the day on which the final instalment of preliminary tax is due and payable in accordance with subsection (2BA).

(c) The amount of the initial relevant instalment shall be 45 per cent of the tax payable by the chargeable person for the chargeable period.

(d) The amount of the final relevant instalment shall be an amount equal to the excess of the tax payable by the chargeable person for the chargeable period over the amount of the initial relevant instalment.”,

(h) in subsection (4E), by substituting “Subject to subsections (4F) and (4G), where” for “Where”,

(i) by inserting the following after subsection (4E):

“(4F) Where as respects a chargeable period which is a relevant accounting period—

(a) the initial instalment of preliminary tax paid by the chargeable person for the chargeable period in accordance with subsection (2BA) is less than 45 per cent of the tax payable by the chargeable person for the chargeable period,

(b) the initial instalment of preliminary tax so paid by the chargeable person for the chargeable period is not less than 45 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 the initial instalment of preliminary tax for the chargeable period is payable in accordance with subsection (2BA), 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 initial instalment of preliminary tax for the chargeable period is payable in accordance with subsection (2BA),

and

(c) the aggregate of the initial instalment and the final instalment of preliminary tax paid by the chargeable person for the chargeable period in accordance with subsection (2BA) is not less than 90 per cent of that amount of tax which would be payable by the chargeable person for the chargeable period if computed in accordance with subsection (4G)(b),

then the initial instalment of preliminary tax paid by the chargeable person for the chargeable period shall be treated for the purposes of subsection (4CA) as having been paid by the date on which it is due and payable.

(4G) Where as respects a chargeable period which is a relevant accounting period—

(a) the aggregate of the initial instalment and the final instalment of preliminary tax paid by the chargeable person for the chargeable period in accordance with subsection (2BA) is less than 90 per cent of the tax payable by the chargeable person for the chargeable period,

(b) the aggregate of the initial instalment and the final instalment of 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,

the final instalment of preliminary tax for the chargeable period is payable in accordance with subsection (2BA), and

(c) the chargeable person makes a further payment of preliminary tax for the chargeable period within one month after the end of the chargeable period and the aggregate of that payment and the initial instalment and final instalment of preliminary tax paid by the chargeable person for the chargeable period in accordance with subsection (2BA) is not less than 90 per cent of the tax payable by the chargeable person for the chargeable period,

then the final instalment of preliminary tax paid by the chargeable person for the chargeable period shall be treated for the purposes of subsection (4CA) as having been paid by the date on which it is due and payable.”,

and

(j) by substituting the following for subsection (11):

“(11) (a) In this subsection—

‘ initial balance ’ means the amount represented by the formula—

A — B

where—

A is the amount of the initial instalment of preliminary tax paid by the surrendering company for the relevant period in accordance with subsection (2BA), and

B is—

(i) where the relevant period commenced on the surrendering company coming within the charge to corporation tax—

(I) 45 per cent of the tax payable by the surrendering company for the relevant period, or

(II) where subsection (2B)(c) applies in relation to that period, a nil amount,

or,

(ii) in any other case, the lower of—

(I) 45 per cent of the tax payable by the surrendering company for the relevant period, or

(II) 50 per cent of the sum of the corresponding corporation tax for the preceding chargeable period and the corresponding income tax for the preceding chargeable period, which is payable by the surrendering company;

‘ final balance ’ means the amount represented by the formula—

C — D

where—

C is the amount of preliminary tax paid by the surrendering company for the relevant period in accordance with subsection (2B) or subsection (2BA), as the case may be, and

D is 90 per cent of the tax payable by the surrendering company for the relevant period, or, where subsection (2B)(c) applies in relation to that period, a nil amount;

‘ relevant initial balance ’ means that part of an initial balance that is specified in a notice given in accordance with paragraph (c);

‘ relevant final balance ’ means that part of a final balance that is specified in a notice given in accordance with paragraph (c).

(b) This subsection applies where—

(i) a chargeable person being a company (in this subsection referred to as the ‘ surren dering company ’) which is a member of a group pays—

(I) an initial instalment of preliminary tax for a chargeable period (in this subsection referred to as the ‘ relevant period ’) in accordance with subsection (2BA), being an amount which exceeds, or exceeds the lower of—

(A) 45 per cent of the tax payable by the surrendering company for the relevant period, or

(B) 50 per cent of the sum of the corresponding corporation tax for the preceding chargeable period and the corresponding income tax for the preceding chargeable period, which is payable by the surrendering company,

(II) an initial instalment of preliminary tax for a relevant period which commenced on the surrendering company coming within the charge to corporation tax, being an amount which exceeds 45 per cent of the tax payable by that company for the relevant period,

(III) an amount of preliminary tax for a relevant period in accordance with subsection (2B) or subsection (2BA) as the case may be, being an amount which exceeds 90 per cent of the tax payable by the surrendering company for the relevant period, or

(IV) any amount of preliminary tax for a relevant period in respect of which subsection (2B)(c) applies,

(ii) another chargeable person being a company (in this subsection referred to as the ‘ claimant company ’) which is a member of the group pays—

(I) an initial instalment of preliminary tax for a chargeable period in accordance with subsection (2BA), being an amount which is less than, or less than the lower of—

(A) 45 per cent of the tax payable by the claimant company for the chargeable period, or

(B) 50 per cent of the sum of the corresponding corporation tax for the preceding chargeable period and the corresponding income tax for the preceding chargeable period, which is payable by the claimant company,

(II) an initial instalment of preliminary tax for a chargeable period which commenced on the claimant company coming within the charge to corporation tax, being an amount which is less than 45 per cent of the tax payable by that company for the relevant period, or

(III) an amount of preliminary tax for a chargeable period in accordance with subsection (2BA), being an amount which is less than 90 per cent of the tax payable by the claimant company for the chargeable period,

(iii) the chargeable period in subparagraph (ii) coincides with the relevant period, and

(iv) the claimant company is not a small company in relation to the relevant period.

(c) Where this subsection applies the 2 companies may, at any time on or before the specified return date for the chargeable period of the surrendering company, jointly give notice to the Collector-General, in such form as the Revenue Commissioners may require, that—

(i) paragraph (d)(i) is to have effect in relation to the relevant initial balance, or,

(ii) paragraph (d)(ii) is to have effect in relation to the relevant final balance,

which is specified in the notice.

(d) (i) Where this paragraph has effect in relation to any relevant initial balance—

(I) an additional amount of preliminary tax equal to the relevant initial balance shall be deemed for the purposes of subsection (4CA)(a)(ii) to have been paid by the claimant company on the due date for the payment of the initial instalment of preliminary tax of that company for the relevant period if 100 per cent of the tax payable by the claimant company for the relevant period, disregarding this clause, is paid on or before the specified return date for the relevant period, and

(II) the surrendering company shall for the purposes of this subsection be treated as having surrendered the relevant initial balance to the claimant company and that relevant initial balance shall not be available for use by any other company under this subsection.

(ii) Where this paragraph has effect in relation to any relevant final balance—

(I) an additional amount of preliminary tax equal to the relevant final balance shall be deemed for the purposes of subsection (4CA)(a)(iv) to have been paid by the claimant company on the due date for the payment of the final instalment of preliminary tax of that company for the relevant period if 100 per cent of the tax payable by the claimant company for the relevant period, disregarding this clause, is paid on or before the specified return date for the relevant period, and

(II) the surrendering company shall for the purposes of this subsection be treated as having surrendered the relevant final balance to the claimant company and that relevant final balance shall not be available for use by any other company under this subsection.

(e) A payment for a relevant initial balance or for a relevant final balance—

(i) shall not be taken into account in computing profits or losses of either company for corporation tax purposes, and

(ii) shall not be regarded as a distribution or a charge on income for any of the purposes of the Corporation Tax Acts,

and, in this paragraph, ‘ payment for a relevant initial balance or for a relevant final balance ’ means a payment made by the claimant company to the surrendering company in pursuance of an agreement between them as respects an amount surrendered in accordance with this subsection, being a payment not exceeding that amount.

(f) (i) This subsection shall not affect the liability to pay corporation tax of any company to which the subsection relates.

(ii) Where this subsection applies, the amount on which, but for this subsection, the claimant company is liable to pay interest in accordance with section 1080 shall be reduced by—

(I) any relevant initial balance deemed to have been paid by that company in accordance with paragraph (d)(i)(I), or

(II) any relevant final balance deemed to have been paid by that company in accordance with paragraph (d)(ii)(I).

(g) For the purposes of this subsection, 2 companies are members of the same group if and only if they would be such members for the purposes of section 411.”.

(2) (a) Subsection (1), apart from paragraphs (a)(i)(II) and (e)(ii), has effect for accounting periods commencing on or after 14 October 2008.

(b) Paragraphs (a)(i)(II) and (e)(ii) of subsection (1) apply to disposals made in the year of assessment 2009 and subsequent years of assessment.

39 .— (1) Section 239 of the Principal Act is amended—

(a) in subsection (4) by inserting “, but in any event not later than day 21 of the month in which that period of 9 months ends” after “the end of that period”, and

(b) in subsection (5) by substituting “corporation tax” for “preliminary tax” and by inserting “in accordance with section 958 and” after “payable by the company”.

(2) This section has effect for accounting periods commencing on or after 14 October 2008.

40 .— (1) Schedule 4 to the Principal Act is amended—

(a) by inserting the following after paragraph 53:

“53A. The Institute of Public Health in Ireland Limited.”,

and

(b) by inserting the following after paragraph 84:

“84A. The Private Residential Tenancies Board.”,

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

(b) Subsection (1)(b) is deemed to have come into force and have taken effect on and from 1 September 2004.