Chapter II

Income Tax, Sur-tax and Corporation Profits Tax

33. —(1) In this section and in the Third Schedule—

(a) “exploration or exploitation activities” means activities carried on in connection with the exploration or exploitation of so much of the sea bed and subsoil and their natural resources as is situated in the State or in a designated area;

(b) “exploration or exploitation rights” means rights to assets to be produced by exploration or exploitation activities or to interests in or to the benefit of such assets;

(c) “designated area” means an area designated by order under section 2 of the Continental Shelf Act, 1968 ;

(d) “tax” means income tax, sur-tax or corporation profits tax, as appropriate, and “for tax purposes” means for purposes of any of the said taxes.

(2) Any profits or gains from exploration or exploitation activities carried on in a designated area or from exploration or exploitation rights shall be treated for tax purposes as profits or gains from activities or property in the State.

(3) Any profits or gains arising to any person not resident in the State from exploration or exploitation activities carried on in the State or in a designated area or from exploration or exploitation rights shall be treated for tax purposes as profits or gains of a trade carried on by that person in the State through a branch or agency.

(4) Where exploration or exploitation activities are carried on by a person on behalf of the holder of a licence granted under the Petroleum and Other Minerals Development Act, 1960 , the holder of the licence shall, for the purpose of any assessment to tax, be deemed to be the agent of that person.

(5) Any emoluments from an office or employment in respect of duties performed in a designated area in connection with exploration or exploitation activities shall be treated for tax purposes as emoluments in respect of duties performed in the State.

(6) This section shall have effect for the purposes of income tax (including sur-tax) for the year 1973-74 and subsequent years of assessment and for the purposes of corporation profits tax as respects any profits arising on or after the 1st day of April, 1973.

(7) The Third Schedule shall have effect for the purpose of supplementing this section.

34. —(1) In this section—

“a qualifying patent” means a patent in relation to which the research, planning, processing, experimenting, testing, devising, designing, developing or similar activity leading to the invention which is the subject of the patent was carried out in the State;

“income from a qualifying patent” means any royalty or other sum paid in respect of the user of the invention to which the qualifying patent relates and includes any sum paid for the grant of a licence to exercise rights under such patent;

“resident of the State” means any person who is resident in the State for the purposes of income tax and who is not resident elsewhere; a company shall be regarded as a resident of the State if it is managed and controlled in the State.

(2) A resident of the State who makes a claim in that behalf and makes a return in the prescribed form of his total income from all sources, as estimated in accordance with the provisions of the Income Tax Acts, shall be entitled to have any income from a qualifying patent arising to him on or after the 6th day of April, 1973, disregarded for all the purposes of the Income Tax Acts, and of the enactments relating to corporation profits tax.

(3) Where, under section 92 of the Patents Act, 1964 , or any corresponding provisions of the law of any other country, an invention which is the subject of a patent is made, used, exercised or vended by or for the service of the State or the government of the country concerned, the provisions of this section shall have effect as if the making, user, exercise or vending of the invention had taken place in pursuance of a licence and any sums paid in respect thereof were income from a qualifying patent.

(4) Where any income arising to a person is, by virtue of this section, to be disregarded, the person shall not be treated, by reason of such disregarding, as having ceased to possess the whole of a single source within the meaning of section 75 of the Income Tax Act, 1967 .

(5) For the purpose of arriving at the amount of income to be disregarded under this section for all the purposes of the Income Tax Acts, the Revenue Commissioners may make such apportionments of receipts and expenses as may be necessary.

(6) The relief provided by this section may be given by repayment or otherwise.

(7) The provisions of Schedule 4 and of paragraph IX of Schedule 18 to the Income Tax Act, 1967 , shall, with any necessary modifications, apply in relation to exemptions from tax under this section.

35. —Interest payable under—

(a) section 15 of the Stamp Act, 1891, and subsections (2) and (3) of section 69 of this Act,

(b) section 129 of the Income Tax Act, 1967 , or

(c) section 21 of the Value-Added Tax Act, 1972 ,

shall be payable without any deduction of income tax and shall not be allowed in computing any income, profits or losses for any of the purposes of the Income Tax Acts or of the enactments relating to corporation profits tax.