(b) the deductible interest equivalent that would have arisen on the legacy debt in the accounting period in accordance with the terms of the legacy debt as they stood on 17 June 2016.
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(3)For the purposes of this Part, the ‘net interest equivalent’ in respect of a relevant entity for an accounting period shall be calculated as follows:
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IEnet = (IEded - IELD-ded) - IEtax where— IEnet is the amount of net interest equivalent in respect of the relevant entity for the accounting period, IEded is the amount of deductible interest equivalent in respect of the relevant entity for the accounting period, IELD-ded is the amount of deductible interest equivalent in respect of the legacy debt of the relevant entity for the accounting period, and IEtax is the amount of taxable interest equivalent in respect of the relevant entity for the accounting period.
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(4)Where the net interest equivalent in respect of a relevant entity for an accounting period is greater than or equal to zero, it shall be referred to in this Part as ‘exceeding borrowing costs’ and where the net interest equivalent in respect of a relevant entity for an accounting period is less than zero, it shall be referred to in this Part as ‘interest spare capacity’.
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(5)In this Part, the EBITDA in respect of a relevant entity for an accounting period shall be the greater of zero and the amount calculated as follows:
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R + I + FT + [(Capallow - IEded allow) - (Capcharge - IEded charge)] + IELD-ded where— R is the relevant profit or relevant loss, as the case may be, of the relevant entity for the accounting period, I is the net interest equivalent of the relevant entity for the accounting period, FT is the amount deducted in respect of foreign tax in calculating the relevant entity’s relevant profit or relevant loss, as the case may be, for the accounting period, Capallow is the amount of allowances in respect of capital expenditure under Parts 9, 24 and 29 made to a relevant entity, and the amount in respect of the non-finance element of finance lease payments deducted in calculating that entity’s relevant profit or relevant loss, as the case may be, for the accounting period, Capcharge is the amount of charges in respect of capital expenditure under Parts 9, 24 and 29 made on a relevant entity in calculating the relevant entity’s relevant profit or relevant loss, as the case may be, for the accounting period, IEded allow is the amount of deductible interest equivalent referable to allowances in respect of capital expenditure under Parts 9, 24 and 29 made to a relevant entity in calculating the relevant entity’s relevant profit or relevant loss, as the case may be, for the accounting period, IEded charge is the amount of deductible interest equivalent referable to charges in respect of capital expenditure under Parts 9, 24 and 29 made on a relevant entity in calculating the relevant entity’s relevant profit or relevant loss, as the case may be, for the accounting period, and IELD-ded is the amount of deductible interest equivalent in respect of the legacy debt of the relevant entity for the accounting period.
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Interest limitation 835AAC. (1) This section shall apply to a relevant entity for an accounting period where— (a) the relevant entity is not, at any time in that accounting period, a standalone entity, (b) the relevant entity has a disallowable amount greater than zero in respect of the accounting period, and (c) the exceeding borrowing costs of the relevant entity exceeds the de minimis amount.
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(2)For the purposes of determining whether the exceeding borrowing costs of a relevant entity exceeds the de minimis amount for an accounting period— (a) in a case in which an amount of deductible interest equivalent is deducted against profits chargeable to tax at the P rate, the amount of that deductible interest equivalent shall be adjusted as follows:
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IEded-adj = IEded x (T rate/P rate) where— IEded-adj is the adjusted amount of deductible interest equivalent in respect of the relevant entity for the accounting period, and IEded is the amount of deductible interest equivalent in respect of the relevant entity for the accounting period deducted against profits chargeable to tax at the P rate, (b) in a case in which an amount of taxable interest equivalent is chargeable to tax at the P rate, the amount of that taxable interest equivalent shall be adjusted as follows:
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IEtax-adj = IEtax x (T rate/P rate) where— IEtax-adj is the adjusted amount of taxable interest equivalent in respect of the relevant entity for the accounting period, and IEtax is the amount of taxable interest equivalent in respect of the relevant entity for the accounting period chargeable to tax at the P rate, (c) in a case in which an amount of deductible interest equivalent is deducted against chargeable gains chargeable to tax at the CGT rate, the amount of that deductible interest equivalent shall be adjusted as follows:
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IEded-adj = IEded x (T rate/CGT rate) where— IEded-adj is the adjusted amount of deductible interest equivalent in respect of the relevant entity for the accounting period, and IEded is the amount of deductible interest equivalent in respect of the relevant entity for the accounting period deducted against chargeable gains chargeable to tax at the CGT rate, (d) in a case in which an amount of deductible interest equivalent in respect of the legacy debt of the relevant entity is deducted against profits chargeable to tax at the P rate, the amount of that deductible interest equivalent shall be adjusted as follows:
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IELD-ded-adj = IELD-ded x (T rate/P rate) where— IELD-ded-adj is the adjusted amount of deductible interest equivalent in respect of the legacy debt of the relevant entity for the accounting period, and IELD-ded is the amount of deductible interest equivalent in respect of the legacy debt of the relevant entity for the accounting period deducted against profits chargeable to tax at the P rate, and (e) in a case in which an amount of deductible interest equivalent in respect of the legacy debt of the relevant entity is deducted against chargeable gains chargeable to tax at the CGT rate, the amount of that deductible interest equivalent shall be adjusted as follows:
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IELD-ded-adj = IELD-ded x (T rate/CGT rate) where— IELD-ded-adj is the adjusted amount of deductible interest equivalent in respect of the legacy debt of the relevant entity for the accounting period, and IELD-ded is the amount of deductible interest equivalent in respect of the legacy debt of the relevant entity for the accounting period deducted against chargeable gains chargeable to tax at the CGT rate.
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(3)Subject to section 835AAL, and subsections (4) and (5), where this section applies to a relevant entity for an accounting period, the amount of tax payable (within the meaning of section 959A) by the relevant entity for the accounting period, or where there is no amount of tax payable due to an insufficiency of income, profits or gains, the amount of any loss or excess arising to the relevant entity in an accounting period, but for the application of this Part, shall be adjusted by reducing the amount of interest equivalent that, but for this Part, would have been deducted in the calculation of that tax payable or that loss or excess, as the case may be, by the disallowable amount until the disallowable amount has been exhausted.
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(4)For the purposes of subsection (3), where the interest equivalent mentioned in that subsection is deducted against profits chargeable to tax at the P rate, or treated as reducing the corporation tax payable on profits chargeable to tax at the P rate, then the amount by which the interest equivalent shall be reduced in respect of a disallowable amount shall be calculated by applying the following fraction:
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T rate/P rate.
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(5)For the purposes of subsection (3), where the interest equivalent mentioned in that subsection is deducted against chargeable gains, or treated as reducing the corporation tax payable on profits chargeable to tax at the CGT rate, then the amount by which the interest equivalent shall be reduced in respect of a disallowable amount shall be calculated by applying the following fraction:
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T rate/CGT rate.
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(6)Where a reduction of interest equivalent in accordance with subsection (3) reduces an amount of interest equivalent deducted in connection with the provision of a specified intangible asset, by reference to which allowances referred to in section 291A(6)(a)(i) are made, then for the purposes of section 291A(6), the aggregate amount for an accounting period referred to in section 291A(6)(a) shall be an amount calculated by reference to the interest equivalent so reduced.
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Carry forward of disallowable amount 835AAD. (1) Where section 835AAC applies to a relevant entity for an accounting period (in this section referred to as the ‘first-mentioned accounting period’), the relevant entity may carry forward the disallowable amount to succeeding accounting periods in accordance with this section and any such amount carried forward shall be referred to in this section as a ‘deemed borrowing cost’.
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(2)This subsection applies where an amount of deemed borrowing cost arises from a disallowable amount which would have, but for this Part, reduced the amount of tax payable by the relevant entity in the first-mentioned accounting period or the accounting period immediately prior to the first-mentioned accounting period.
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(3)Subject to subsections (5), (6), (15) and (16), where subsection (2) applies, a relevant entity may make a claim to deduct the amount of deemed borrowing cost referred to in subsection (2), or a portion thereof— (a) from its total profits or chargeable gains arising in an accounting period subsequent to the first-mentioned accounting period, or (b) where there is an insufficiency of such profits, to create a loss or excess in an accounting period subsequent to the first-mentioned accounting period and relief for that loss or excess shall be given in accordance with section 31, 396(1) or 399, as the case may be, and sections 397, 400 and 401 shall apply to that loss.
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(4)Where a claim is made for a deduction under subsection (3), any such deduction shall be applied after all other claims for relief have been made.
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(5)Where a deemed borrowing cost is deducted from profits chargeable to tax at the P rate, for the purpose of calculating the amount of the deemed borrowing cost applied in reducing the amount of profits chargeable to tax at that rate, the amount of deemed borrowing cost shall be multiplied by the following fraction:
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P rate/T rate.
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(6)Where a deemed borrowing cost is deducted from chargeable gains, for the purpose of calculating the amount of the deemed borrowing cost applied in reducing the amount of chargeable gains chargeable to tax at the CGT rate, the amount of deemed borrowing cost shall be multiplied by the following fraction:
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CGT rate/T rate.
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(7)This subsection applies where an amount of deemed borrowing cost arises from a disallowable amount which would have, but for this Part, resulted in the relevant entity— (a) incurring a loss or excess, (b) incurring a greater loss or excess than would have been incurred, or (c) offsetting a lower amount of loss or excess against its income under section 396(1), 399(1) or 399(2) than would have been offset, in the first-mentioned accounting period.
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(8)Subject to subsections (9), (10), (15) and (16), where subsection (7) applies, a relevant entity’s deemed borrowing cost shall be treated as a loss or excess incurred in the first-mentioned accounting period (to the extent such a loss or excess would have arisen but for this Part) and relief for that loss or excess shall be given in accordance with section 31, 396(1) or 399, as the case may be, and sections 397, 400 and 401 shall apply to the amount of deemed borrowing cost referred to in subsection (7) in the same manner as they apply to a loss.
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(9)Where a deemed borrowing cost that is treated as a loss or excess incurred in the first-mentioned accounting period is deducted from profits chargeable to tax at the P rate, for the purpose of calculating the amount of deemed borrowing cost treated as a loss or excess applied in reducing the amount of profits chargeable to tax at that rate, the amount of deemed borrowing cost treated as a loss or excess shall be multiplied by the following fraction:
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P rate/T rate.
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(10)Where a deemed borrowing cost that is treated as a loss incurred in the first-mentioned accounting period is deducted from chargeable gains, for the purpose of calculating the amount of deemed borrowing cost treated as a loss applied in reducing the amount of profits chargeable to tax at the CGT rate, the amount of deemed borrowing cost treated as a loss shall be multiplied by the following fraction:
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CGT rate/T rate.
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(11)This subsection applies where an amount of deemed borrowing cost arises from a disallowable amount which would have, but for this Part, resulted in a relevant entity incurring— (a) an excess of expenses of management referred to in section 83(3), or (b) a greater excess of expenses of management than would have been incurred, in the first-mentioned accounting period.
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(12)Subject to subsections (13), (14), (15) and (16), where subsection (11) applies, the amount of deemed borrowing cost of the relevant entity shall be treated for the purposes of subsection (3) of section 83, and any further application of that subsection, as if it has been disbursed as expenses of management for the first-mentioned accounting period.
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(13)Where a deemed borrowing cost that is treated as if it has been disbursed as expenses of management incurred in the first-mentioned accounting period is deducted from profits chargeable to tax at the P rate, for the purpose of calculating the amount of deemed borrowing cost treated as expenses of management applied in reducing the amount of profits chargeable to tax at that rate, the amount of deemed borrowing cost treated as an expense of management shall be multiplied by the following fraction:
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P rate/T rate.
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(14)Where a deemed borrowing cost that is treated as if it has been disbursed as expenses of management incurred in the first-mentioned accounting period is deducted from chargeable gains, for the purpose of calculating the amount of deemed borrowing cost treated as expenses of management applied in reducing the amount of chargeable gains chargeable to tax at the CGT rate, the amount of deemed borrowing cost treated as an expense of management shall be multiplied by the following fraction:
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CGT rate/T rate.
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(15)The aggregate of the deemed borrowing cost utilised in an accounting period under subsections (3), (8) and (12) shall be limited to the amount of the total spare capacity in the accounting period.
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(16)Where the relief available under subsections (3), (8) and (12) would, but for subsection (15), exceed the total spare capacity of a relevant entity in an accounting period, relief under subsection (8) shall be given in priority to relief under subsection (3) or (12).
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(17)For the purposes of determining, in respect of a disallowable amount carried forward in accordance with subsection (1), the amount of relief available in accordance with subsections (3), (8) and (12) in an accounting period (in this subsection referred to as the ‘relevant accounting period’) subsequent to the first-mentioned accounting period, the amount of relief given in respect of the deemed borrowing cost concerned under those subsections in the accounting periods, if any, prior to the relevant accounting period shall be deducted from the amount of the deemed borrowing cost.
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(18)A deemed borrowing cost shall not be taken into account in calculating a relevant entity’s deductible interest equivalent in an accounting period subsequent to the first-mentioned accounting period.
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(19)Notwithstanding anything in this section, no amount shall be deductible in respect of a deemed borrowing cost that arises from a disallowable amount which reduced an amount of interest equivalent deducted in connection with the provision of a specified intangible asset, by reference to which allowances referred to in section 291A(6)(a)(i) are made, and for the purposes of section 291A(6)(b)(ii) such amount shall, for the accounting period in which the disallowable amount arises, be treated as an amount of interest for which relief cannot be given by virtue of section 291A(6)(a).
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Carry forward of total spare capacity 835AAE. (1) A relevant entity may carry forward its total spare capacity for a period not exceeding 60 months from the end of the accounting period in which the total spare capacity arose (in this section referred to as the ‘relevant period’).
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(2)Where a disallowable amount arises in respect of a relevant entity for an accounting period during a relevant period, the relevant entity may, on making a claim, reduce the disallowable amount by an amount of the total spare capacity carried forward from a previous accounting period in accordance with subsection (1).
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(3)Where a claim is made under subsection (2)— (a) the disallowable amount for the accounting period concerned shall, subject to subsection (4), be reduced by the amount of total spare capacity carried forward from the previous accounting period, and (b) the amount of total spare capacity not applied to reduce the disallowable amount in the accounting period shall be carried forward to the next accounting period.
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(4)Where the total spare capacity carried forward from previous accounting periods is greater than the disallowable amount for an accounting period, the relevant entity shall, in reducing the disallowable amount, apply total spare capacity which has arisen in an earlier accounting period in priority to total spare capacity which has arisen in a later accounting period.
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(5)Where a disallowable amount arises in respect of a relevant entity for an accounting period which begins before the end of a relevant period in respect of an amount of total spare capacity being applied to reduce the disallowable amount, the amount of total spare capacity shall be reduced by multiplying it by the following fraction:
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A/B where— A is the length of the period common to the relevant period and accounting period, and B is the length of the accounting period.
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(6)For the purposes of determining the amount of relief available for total spare capacity, after the making of a claim or claims for relief under this section, or under subsection (3), (8) or (10) of section 835AAD, the amount of total spare capacity available for any subsequent claims shall be reduced by the amount claimed under the first-mentioned claims.
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Reporting 835AAF. (1) Subject to subsection (2), a company shall make a return, by the specified return date for the accounting period, in the form specified by the Revenue Commissioners for that purpose.
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(2)The return referred to in subsection (1) may include the following details in respect of the company and an accounting period: (a) EBITDA; (b) the allowable amount; (c) exceeding borrowing costs; (d) the disallowable amount; (e) interest spare capacity; (f) limitation spare capacity; (g) in respect of amounts carried forward from prior accounting periods— (i) deemed borrowing cost carried forward, (ii) deemed borrowing cost utilised in the accounting period, (iii) total spare capacity carried forward, and (iv) total spare capacity utilised in the accounting period; (h) where the group ratio election is made in accordance with section 835AAH— (i) group exceeding borrowing costs, and (ii) group EBITDA; (i) where the group equity election is made in accordance with section 835AAI— (i) the amount inserted in respect of E, for the company and the worldwide group, in the formula for the calculation of the ratio of equity over total assets in section 835AAI(1), and (ii) the amount inserted in respect of A, for the company and the worldwide group, in the formula for the calculation of the ratio of equity over total assets in section 835AAI(1); (j) whether the company is a single company worldwide group.
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(3)Where a company is a member of an interest group and section 835AAM applies, paragraphs (a), (b), (c), (h), (i) and (j) of subsection (2) shall not apply.
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Chapter 3
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Group and equity ratio Interpretation (Chapter 3) 835AAG. (1) In this Chapter— ‘associated enterprise’ has the same meaning as it has in Part 35C, other than in Chapters 2, 3 and 8 of that Part and in the application of that Part to hybrid entities; ‘group EBITDA’ means the amount included in respect of profit or loss, before taking into account any amount of income tax, finance income, finance costs, depreciation, amortisation or impairments, excluding any amounts in respect of a qualifying long-term infrastructure project, in the ultimate consolidated financial statements of the group of which the relevant entity is a member for the period in which the relevant entity’s accounting period ends; ‘group exceeding borrowing costs’ means the amount included in respect of net finance expense, excluding any amount of finance income or finance expense in respect of a qualifying long-term infrastructure project, in the ultimate consolidated financial statements of the group of which the relevant entity is a member for the period in which the relevant entity’s accounting period ends; ‘group ratio’ means the following fraction expressed as a percentage: (group exceeding borrowing costs)/(group EBITDA).
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(2)Where a relevant entity is a single company worldwide group, group exceeding borrowing costs and group EBITDA shall be calculated on the basis of the financial statements of the relevant entity prepared under generally accepted accounting practice, adjusted such that transactions with associated enterprises are disregarded.
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(3)Where arrangements are entered into by any person and it is reasonable to consider that the main purpose or one of the main purposes of the arrangements, or any part of them, is the avoidance of the effect of the adjustment referred to in subsection (2), then that subsection shall apply as if the arrangements, or the part of them, as the case may be, had not been entered into.
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Group ratio 835AAH. (1) Subject to section 835AAJ(2) and (3), where the group ratio exceeds 30 per cent for an accounting period of a relevant entity, the relevant entity may make an election under this subsection.
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(2)Where a relevant entity makes an election under subsection (1), the definition of ‘allowable amount’ in section 835AY(2) shall, for the purposes of the application of this Part to the relevant entity for the accounting period concerned, be subject to the modification that the reference in that definition to the EBITDA limit shall be construed as a reference to the group ratio of the relevant entity for that accounting period.
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Equity ratio 835AAI. (1) In this section, ‘ratio of equity over total assets’ means the following fraction expressed as a percentage:
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E/A where— E is the equity, including share capital, share premium and reserves of a relevant entity, worldwide group or single company worldwide group, and A is the total assets, of a relevant entity, worldwide group or single company worldwide group, in each case, as disclosed in the financial statements of the relevant entity, worldwide group or single company worldwide group, as the case may be, which are prepared under generally accepted accounting practice or an alternative body of accounting standards.
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(2)For the purpose of calculating the ratio of equity over total assets for a single company worldwide group, the amount to be included as E in the formula in subsection (1) shall be increased by an amount equal to the amount owed by the relevant entity to its associated enterprises which gives rise to deductible interest equivalent.
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(3)This section applies to a relevant entity in respect of an accounting period where— (a) the relevant entity’s ratio of equity over total assets is greater than, equal to or not more than two percentage points less than the worldwide group’s ratio of equity over total assets, calculated on the basis of the ultimate consolidated financial statements relating to the period in which the relevant entity’s accounting period ends, or (b) the relevant entity is a member of a single company worldwide group, the relevant entity’s ratio of equity over total assets is greater than, equal to or not more than two percentage points less than the single company worldwide group’s ratio of equity over total assets calculated on the basis of the financial statements relating to the period in which the relevant entity’s accounting period ends.
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(4)Where, in the period of 6 months prior to the end of an accounting period of a relevant entity, a scheme or arrangement is entered into which results in an increase in the amount represented by E in the formula in subsection (1) for the relevant entity, the effect of that scheme or arrangement shall not be taken into account in calculating the relevant entity’s ratio of equity over total assets for that accounting period, unless— (a) it is shown that the scheme or arrangement was entered into for bona fide commercial reasons, and (b) it is not reasonable to consider that the scheme or arrangement is, or forms part of, any scheme or arrangement of which the main purpose, or one of the main purposes, is the satisfaction of paragraph (a) or (b) of subsection (3).
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(5)Where arrangements are entered into by any person and it is reasonable to consider that the main purpose, or one of the main purposes, of the arrangements, or any part of them, is the avoidance of an increase, in accordance with subsection (2), in the amount included as E in the formula in subsection (1), subsection (2) shall apply as if the arrangements, or that part of them, had not been entered into.
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(6)Subject to section 835AAJ(2) and (3), where this section applies in respect of an accounting period of a relevant entity, the relevant entity may make an election under this subsection.
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(7)Where a relevant entity makes an election under subsection (6) in respect of an accounting period, section 835AAC shall not apply to the relevant entity in respect of the accounting period.
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Election 835AAJ. (1) An election under section 835AAH or 835AAI shall be made— (a) in such form as the Revenue Commissioners shall specify, and (b) on or before the specified return date for the accounting period to which the election relates.
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(2)An election shall not be made by a relevant entity under section 835AAH and 835AAI in respect of an accounting period.
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(3)An election shall not be made by a relevant entity under section 835AAH or 835AAI in respect of an accounting period where the relevant entity is an interest group and its members include a company referred to in section 835AAK(1)(a)(ii).
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Chapter 4
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Application of this Part to interest groups Interpretation (Chapter 4) 835AAK. (1) For the purposes of this Part, an ‘interest group’ shall comprise the companies within the charge to corporation tax in the State that— (a) are— (i) members of the same worldwide group, or (ii) where not members of the same worldwide group, deemed to be members of the same group of companies under section 411, and (b) have elected to be members of the interest group.
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(2)Where a company, branch or agency, or any activities of a company, branch or agency, falls to be included in two interest groups, then the company, branch or agency shall elect to be treated as a member of one such group only for the purposes of this Part.
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(3)The election referred to in subsection (1) shall— (a) apply for a period of at least three years from the beginning of the accounting period in respect of which the election is made or, if later, the date on which one of the conditions set out in subsection (1)(a) is satisfied, (b) be made in such form as the Revenue Commissioners shall specify, and (c) be made on or before the specified return date for the accounting period to which the election first relates.
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(4)Subsequent to the period referred to in subsection (3)(a), an election referred to in subsection (1) may be withdrawn and such withdrawal shall— (a) apply for a period of at least three years from the beginning of the accounting period in respect of which the withdrawal is made, (b) be made in such form as the Revenue Commissioners shall specify, and (c) be made on or before the specified return date for the accounting period to which the withdrawal first relates.
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Application of Part to interest group 835AAL. (1) This section applies where a company is a member of an interest group.
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(2)Where a relevant entity is an interest group, section 835AAC shall apply, subject to the modification that a reference to a disallowable amount of a relevant entity shall be construed as a reference to the disallowable amount of the member of the interest group calculated or allocated, as the case may be, in accordance with subsection (6), (7) or (8), as the case may be.
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(3)Where an amount is required to be calculated in respect of an interest group for the purposes of this Part, it shall comprise the results of all the members of the interest group.
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(4)The accounting period of an interest group shall be the accounting period which is common to more than half of the members of the interest group or, where there is no such accounting period, the accounting period of the reporting company.
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(5)Where the accounting period of a member of an interest group does not coincide with the accounting period of the interest group— (a) the results of such a member shall be apportioned such that the income and expenses are those which, on a just and reasonable basis, arose during the accounting period of the interest group, and (b) all balance sheet amounts shall be those which would be reflected in the balance sheet of the member of the interest group on the final day of the accounting period of the interest group.
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(6)Subject to subsections (7) and (8), the disallowable amount of a member of an interest group shall be calculated as follows:
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DAmember = DAgroup x (DIEmember/DIEgroup) where— DAmember is the disallowable amount of the member of the interest group, DAgroup is the disallowable amount of the interest group, DIEmember is the deductible interest equivalent of the member of the interest group, and DIEgroup is the deductible interest equivalent of the interest group.
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(7)Where a reporting company and each member of the interest group concerned jointly notify the Revenue Commissioners, in the form specified by the Revenue Commissioners for that purpose, that the disallowable amount, or a portion of the disallowable amount, of the interest group should be deemed to be the disallowable amount of a member of the interest group, the disallowable amount of that member shall be the amount so notified.
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(8)A disallowable amount allocated under subsection (7) to a member of an interest group in an accounting period shall not exceed the deductible interest equivalent of that group member for that accounting period.
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(9)Subject to subsection (10), the total spare capacity of a member of an interest group arising in an accounting period shall be calculated as follows:
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TSCmember = TSCgroup x (TIEmember/TIEgroup) where— TSCmember is the total spare capacity of the member of the interest group, TSCgroup is the total spare capacity of the interest group, TIEmember is the taxable interest equivalent of the member of the interest group, and TIEgroup is the taxable interest equivalent of the interest group.
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(10)Where a reporting company and each member of the interest group concerned jointly notify the Revenue Commissioners, in the form specified by the Revenue Commissioners for that purpose, that the total spare capacity, or a portion of the total spare capacity, of the interest group should be deemed to be the total spare capacity of a member of the interest group, the total spare capacity of that member shall be the amount so notified.
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(11)For the purposes of the application of section 835AAD or 835AAE to an interest group, a reference in the section concerned to a relevant entity shall be construed as a reference to a member of an interest group.
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(12)Where— (a) an amount of total spare capacity is carried forward from a preceding accounting period by a member of an interest group, and (b) the reporting company of the interest group and each member of the interest group concerned jointly notify the Revenue Commissioners, in the form specified by the Revenue Commissioners for that purpose, that the total spare capacity so carried forward, or a portion of that total spare capacity, should be reallocated to a member of the interest group, the total spare capacity so notified shall be allocated to the member of the interest group.
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(13)Subject to subsection (14), where the relevant entity is an interest group, section 835AAI shall apply subject to the modification that the relevant entity’s ratio of equity over total assets shall be calculated on the basis of a consolidation of the results of the members of the interest group as if each member of the interest group had a common ultimate parent resident in the State prepared under the same body of accounting standards and same accounting policies as applies to the ultimate consolidated financial statements of the worldwide group concerned, but where a member of an interest group is a branch or agency of a company not resident in the State, then the results of that member of the interest group shall be the results of the branch or agency.
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(14)Where members of an interest group hold investments in companies which are not members of an interest group, and such investments would, but for this subsection, be fully consolidated in the results of the members of an interest group prepared pursuant to subsection (13), those investments shall, for the purposes of subsection (13) be accounted for at cost, measured at the lower of their carrying amount and fair value less costs to sell, as if the relevant entity was a company required to prepare non-consolidated financial statements.
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(15)A payment for relief shall not— (a) be taken into account in computing profits or losses of either the payor or the recipient of the payment for relief for corporation tax purposes, and (b) be regarded as a distribution or a charge on income for any of the purposes of the Corporation Tax Acts.
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Interest group reporting 835AAM. (1) An interest group shall appoint a member of the group that is a chargeable person, within the meaning of Part 41A, for the purposes of this Chapter (in this Part referred to as a ‘reporting company’).
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(2)Where an election has been made in accordance with section 835AAK to form an interest group, the reporting company shall make a return on behalf of the interest group on or before the specified return date for the accounting period, in the form specified by the Revenue Commissioners.
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(3)The return referred to in subsection (2) may include the following details in respect of the interest group and an accounting period of the interest group: (a) the name and tax reference number of each member of the interest group; (b) EBITDA; (c) the allowable amount; (d) exceeding borrowing costs; (e) the disallowable amount and its allocation as amongst the members of the interest group; (f) total spare capacity and its allocation as amongst the members of the interest group; (g) in respect of amounts carried forward from prior accounting periods— (i) deemed borrowing cost carried forward and its allocation as amongst the members of the interest group, (ii) deemed borrowing cost utilised in the accounting period and its allocation as amongst the members of the interest group, (iii) total spare capacity carried forward and its allocation as amongst the members of the interest group, and (iv) total spare capacity utilised in the accounting period and its allocation as amongst the members of the interest group; (h) where an election is made in accordance with section 835AAH(1)— (i) group exceeding borrowing costs, and (ii) group EBITDA; (i) where an election is made in accordance with section 835AAI(6)— (i) amount inserted in respect of E, for the interest group and the worldwide group, in the formula for the calculation of the ratio of equity over total assets in section 835AAI(1), and (ii) amount inserted in respect of A, for the interest group and the worldwide group, in the formula for the calculation of the ratio of equity over total assets in section 835AAI(1); (j) where a payment for relief is made in accordance with section 835AAL(15)— (i) the name and tax reference number of the payee and payor, and (ii) the amount of the payment.
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Chapter 5
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Application of this Part Scope of application 835AAN. This Part shall apply to an accounting period of a relevant entity commencing on or after 1 January 2022.
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Order of application 835AAO. This Part shall apply after all provisions of the Tax Acts and the Capital Gains Tax Acts, other than section 811C.”.
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(4)The Principal Act is amended in Part 35C, in section 835AX, in subsection (1), by the substitution of “other than section 811C and Part 35D” for “other than section 811C”.
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(5)The Principal Act is amended in Part 41A— (a) in section 959AR, by the substitution of the following subsection for subsection (4)— “(4) Where as respects an accounting period, other than a relevant accounting period, of a company— (a) for accounting periods other than those referred to in paragraph (b)— (i) the preliminary tax paid by the chargeable person for the accounting period in accordance with subsection (1) is less than 90 per cent of the tax payable by the chargeable person for the accounting period, (ii) the preliminary tax so paid by the chargeable person for the accounting period is not less than 90 per cent of the amount of tax which would be payable by the chargeable person for the accounting period if no amount were included in the company’s profits for the accounting period— (I) in respect of chargeable gains on the disposal of assets in the part of the accounting period which is after the date by which preliminary tax for the accounting period is payable in accordance with subsection (1), or (II) in the case of a relevant company, in respect of profits or gains or losses accruing, and not realised, in the accounting period on financial assets or financial liabilities as are attributable to changes in value of those assets or liabilities in the part of the accounting period which is after the end of the month immediately preceding the month in which preliminary tax for the accounting period is payable in accordance with subsection (1), and (iii) the chargeable person makes a further payment of preliminary tax for the accounting period within one month after the end of the accounting period and the aggregate of that payment and the preliminary tax paid by the chargeable person for the accounting period in accordance with subsection (1) is not less than 90 per cent of the tax payable by the chargeable person for the accounting period, or (b) for accounting periods commencing on or after 1 January 2022 and ending on or before 31 December 2027— (i) the preliminary tax paid by the chargeable person for the accounting period in accordance with subsection (1) is less than 90 per cent of the tax payable by the chargeable person for the accounting period, (ii) the preliminary tax so paid by the chargeable person for the accounting period is not less than 90 per cent of the amount of tax which would be payable by the chargeable person for the accounting period if no amount were included in the company’s profits for the accounting period, in respect of a disallowable amount (within the meaning of Part 35D),
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(iii) the chargeable person makes a further payment of preliminary tax for the accounting period within a period of 6 months after the end of the accounting period, but where the last day of that period of 6 months is later than day 21 of the month in which it occurs, the further payment of preliminary tax for the accounting period is paid no later than— (I) day 21 of the month in which that last day occurs, or (II) where payment is made by such electronic means as are required by the Revenue Commissioners, day 23 of the month in which that last day occurs, and (iv) the aggregate of that payment and the preliminary tax paid by the chargeable person for the accounting period in accordance with subsection (1) is not less than 90 per cent of the tax payable by the chargeable person for the accounting period, the further payment of preliminary tax paid by the chargeable person for the accounting period shall be treated for the purposes of subsection (3) as having been paid by the date by which it is due and payable.”, and (b) in section 959AS, by the substitution of the following subsection for subsection (7): “(7) Where, as respects a relevant accounting period, either— (a) for accounting periods other than those referred to in paragraph (b)— (i) the aggregate of the initial instalment and the final instalment of preliminary tax paid by the chargeable person for the accounting period in accordance with subsection (2) is less than 90 per cent of the tax payable by the chargeable person for the accounting period, (ii) the aggregate of the initial instalment and the final instalment of preliminary tax so paid by the chargeable person for the accounting period is not less than 90 per cent of the amount of tax which would be payable by the chargeable person for the accounting period if no amount were included in the company’s profits for the accounting period— (I) in respect of chargeable gains on the disposal of assets in the part of the accounting period which is after the date by which the final instalment of preliminary tax for the accounting period is payable in accordance with subsection (2), or (II) in the case of a relevant company, in respect of profits or gains or losses accruing, and not realised, in the accounting period on financial assets or financial liabilities as are attributable to changes in value of those assets or liabilities in the part of the accounting period which is after the end of the month immediately preceding the month in which the final instalment of preliminary tax for the accounting period is payable in accordance with subsection (2),
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and (iii) the chargeable person makes a further payment of preliminary tax for the accounting period within one month after the end of the accounting period and the aggregate of that payment and the initial instalment and final instalment of preliminary tax paid by the chargeable person for the accounting period in accordance with subsection (2) is not less than 90 per cent of the tax payable by the chargeable person for the accounting period, or (b) for accounting periods commencing on or after 1 January 2022 and ending on or before 31 December 2027— (i) the aggregate of the initial instalment and the final instalment of preliminary tax paid by the chargeable person for the accounting period in accordance with subsection (2) is less than 90 per cent of the tax payable by the chargeable person for the accounting period, (ii) the aggregate of the initial instalment and the final instalment of preliminary tax so paid by the chargeable person for the accounting period is not less than 90 per cent of the amount of tax which would be payable by the chargeable person for the accounting period if no amount were included in the company’s profits for the accounting period, in respect of a disallowable amount (within the meaning of Part 35D), (iii) the chargeable person makes a further payment of preliminary tax for the accounting period within a period of 6 months after the end of the accounting period, but where the last day of that period of 6 months is later than day 21 of the month in which it occurs, the further payment of preliminary tax for the accounting period is paid no later than— (I) day 21 of the month in which that last day occurs, or (II) where payment is made by such electronic means as are required by the Revenue Commissioners, day 23 of the month in which that last day occurs, and (iv) the aggregate of the payment referred to in subparagraph (iii) and the initial instalment and final instalment of preliminary tax paid by the chargeable person for the accounting period in accordance with subsection (2) is not less than 90 per cent of the tax payable by the chargeable person for the accounting period, the final instalment of preliminary tax paid by the chargeable person for the accounting period shall be treated for the purposes of subsection (4) as having been paid by the date on which it is due and payable.”.
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Amendment of section 481 of Principal Act (relief for investment in films) 32. Section 481 of the Principal Act is amended, in subsection (1), in the definition of “eligible expenditure”— (a) by the substitution, in paragraph (a), of “the film,” for “the film, and”, (b) by the substitution, in paragraph (b), of “subsection (2E), and” for “subsection (2E);”, and (c) by the insertion of the following paragraph after paragraph (b): “(c) directly by the qualifying company concerned on the provision of labour only services by an individual (not being an eligible individual) for the purposes of the production of the film;”.
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Digital games relief 33. (1) The Principal Act is amended by the insertion of the following section after section 481: “Relief for investment in digital games 481A. (1) In this section— ‘date of completion’, in relation to a qualifying digital game, means the date on which the game is first made available to the public or, where the game is commissioned by an undertaking other than the digital games development company, the date on which the game is first provided by the digital games development company to the undertaking and ‘completed’ shall be construed accordingly; ‘digital game’ means a game which— (a) integrates digital technology, (b) incorporates not less than three of the following classes of information, in digital form: (i) text; (ii) sound; (iii) still images; (iv) animated images, (c) is capable of being published on an electronic medium, and (d) is controlled by software enabling the person playing the game to interact fully with the dynamics of the game, including by providing feedback to the person, enabling control over elements of the game by the person and allowing the person to adapt elements of the game; ‘digital games development company’ means a company that— (a) is resident in the State, or is resident in a European Economic Area (EEA) state other than the State and carries on business in the State through a branch or agency, (b) carries on a trade of developing digital games that are wholly or principally to be made available to the public on a commercial basis with a view to the realisation of profit, (c) has delivered to the Collector-General a return, in accordance with section 959I, in respect of— (i) the accounting period referred to in paragraph (a) of the definition of ‘qualifying period’, or (ii) each accounting period ending in the qualifying period, referred to in paragraph (b) of that definition, as the case may be, and (d) is not, or is not part of, an undertaking which would be regarded as an undertaking in difficulty; ‘digital games corporation tax credit’, in relation to a qualifying digital game, means an amount equal to 32 per cent of the lowest of— (a) the eligible expenditure, (b) 80 per cent of the qualifying expenditure, and (c) €25,000,000; ‘eligible digital game’ means a digital game which is— (a) developed on a commercial basis with a view to the realisation of profit, (b) wholly or mainly to be made available to the public, (c) an exempted work (within the meaning of the Video Recordings Act 1989 ), and (d) which is not produced solely or mainly—
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(i) as part of a promotional campaign or advertising for a specific product or undertaking, or (ii) as a game of skill or chance for a prize comprising money or money’s worth; ‘eligible expenditure’ means the portion of the qualifying expenditure that is expended on the development of the digital game in the State or the EEA; ‘final certificate’ shall be construed in accordance with subsection (9); ‘interim certificate’ shall be construed in accordance with subsection (4); ‘interim digital game’ means a digital game in respect of which— (a) an interim certificate has been issued, and (b) no final certificate has been issued; ‘interim digital games corporation tax credit’, in relation to an interim digital game, means an amount incurred in an accounting period equal to 32 per cent of the lowest of— (a) the eligible expenditure amount, (b) 80 per cent of the qualifying expenditure, and (c) €25,000,000; ‘qualifying digital game’ means a digital game in respect of which the Minister has issued a final certificate; ‘qualifying expenditure’, in relation to an interim digital game or a qualifying digital game, is expenditure incurred by the digital games development company on the design, production and testing of a digital game; ‘qualifying period’, in relation to digital games corporation tax credit means— (a) the accounting period of the digital games development company, in respect of which the specified return date for the chargeable period, within the meaning of section 959A, immediately precedes the date the claim referred to in subsection (19) or subsection (20), as the case may be, was made, or (b) where the accounting period referred to in paragraph (a) is a period of less than 12 months, the period— (i) commencing on the date on which the most recently commenced accounting period, which commences on or before the date which is 12 months before the end of the accounting period referred to in paragraph (a), commences, and (ii) ending on the date the accounting period referred to in paragraph (a) ends, and references in subsections (22) and (23) to corporation tax and in subsection (23) to corporation tax paid shall be construed accordingly; ‘Rescuing and Restructuring Guidelines’ means the Communication of the Commission on Guidelines on State aid for rescuing and restructuring non-financial undertakings in difficulty4 ; ‘specified amount’ has the meaning assigned to it by subsection (23); ‘the Minister’ means the Minister for Tourism, Culture, Arts, Gaeltacht, Sport and Media;
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‘undertaking’ means the relevant economic unit that would be regarded as an undertaking for the purposes of the Rescuing and Restructuring Guidelines; ‘undertaking in difficulty’ shall be construed in accordance with section 2. 2 of the Rescuing and Restructuring Guidelines.
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(2)Subject to the provisions of this section, a digital games development company may make an application to the Minister— (a) in relation to a digital game that is to be developed by the company, for the issue by the Minister of an interim certificate, or (b) in relation to a digital game that is developed and completed by the company, for the issue by the Minister of a final certificate.
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(3)An application for an interim or final certificate under subsection (2) shall be in a form approved by the Minister for that purpose and shall contain such information as may be specified in regulations made under subsection (17).
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(4)The Minister may, following an application by a digital games development company under subsection (2)(a), subject to subsection (5) and in accordance with regulations made under subsection (17), issue to the digital games development company a certificate (in this section referred to as an ‘interim certificate’) stating— (a) that the certificate is an interim certificate, (b) that the digital game is to be treated as an interim digital game for the purposes of this section, and (c) the expiry date of the interim certificate.
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(5)In considering whether to issue the interim certificate referred to in subsection (4), the Minister shall have regard to— (a) whether the digital game as proposed is likely to be an eligible digital game when completed, and (b) the contribution which the development of the digital game is expected to make to the promotion and expression of Irish and European culture, by reference to the following: (i) the cultural content of the game, including its setting, principal characters, language and subject matter; (ii) any cultural creativity employed in the development of the game, including innovation in the portrayal of Irish or European culture, the use of materials written or created in Ireland or Europe as the basis for the game, technological innovation or the use of music created by a composer who is a national of or ordinarily resident in Ireland or another EEA state; (iii) the contribution of the game to the development of a concentration of cultural activity, by reference to such matters as the proportion of the creative work carried out in Ireland or another EEA state, the number of key positions in the development of the game occupied by persons who are nationals of or ordinarily resident in Ireland or another EEA state, and the proportion of the members of the development team who are nationals of or ordinarily resident in Ireland or another EEA state; (iv) the concomitant cultural contribution of the game, by reference to matters including the educational content of games aimed at children and the inclusion of themes relating to diversity and equality; (v) whether the content of the game promotes the protection, restoration and promotion of sustainable use of Irish or European terrestrial ecosystems or the raising of awareness of the exigencies of increasing environmental sustainability and minimising climate change.
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(6)Where an interim certificate is issued, the Minister, having regard to the criteria specified in subsection (5), shall specify in the interim certificate such conditions, as the Minister may consider proper, including conditions— (a) in relation to the employment-related responsibilities of the digital games development company in the development of that digital game, or (b) in relation to, in respect of the Communication from the Commission (2013/C 332/01)5 , the maximum aid intensity.
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(7)The Minister may amend or revoke any condition (including a condition added by virtue of this subsection) specified in an interim certificate, or add to such conditions, by giving notice in writing to the digital games development company concerned of the amendment, revocation or addition, as the case may be, and this section shall apply as if— (a) a condition so amended or added by the notice was specified in the interim certificate, and (b) a condition so revoked was not specified in the interim certificate.
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(8)On the expiry of an interim certificate, the interim certificate will cease to have effect and is treated as never having had effect unless— (a) an application has been made in advance of the expiry date to the Minister under subsection (2)(b), and (b) on the determination of the application, a final certificate is issued by the Minister.
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(9)The Minister may, following an application by a digital games development company under subsection (2)(b), subject to subsection (10) and in accordance with regulations made under subsection (17), issue to the digital games development company a certificate (in this section referred to as a ‘final certificate’) stating— (a) that the certificate is a final certificate, and (b) that the digital game is to be treated as a qualifying digital game for the purposes of this section.
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(10)In considering whether to issue a final certificate, the Minister shall have regard to the following criteria— (a) whether the digital game as completed is an eligible digital game, (b) the contribution which the digital game makes to the promotion and expression of Irish or European culture, by reference to the matters referred to in subparagraphs (i) to (v) of subsection (5)(b), and (c) where an interim certificate has been issued in respect of the digital game, whether the conditions specified in the interim certificate have been satisfied.
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(11)Where a final certificate is issued, the Minister, having regard to the criteria specified in subsection (10), shall specify in the final certificate such conditions, as the Minister may consider proper, including a condition— (a) in relation to the employment-related responsibilities of the digital games development company for the development of that digital game, and (b) in relation to, in respect of the Communication from the Commission (2013/C 332/01), the maximum aid intensity.
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(12)The Minister may amend or revoke any condition (including a condition added by virtue of this paragraph) specified in a final certificate, or add to such conditions, by giving notice in writing to the digital games development company concerned of the amendment, revocation or addition, as the case may be, and this section shall apply as if— (a) a condition so amended or added by the notice was specified in the final certificate, and (b) a condition so revoked was not specified in the final certificate.
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(13)A digital games development company shall not make a claim for an interim digital games corporation tax credit under subsection (19) or a digital games corporation tax credit under subsection (20) where— (a) there has not been issued to the digital games development company either an interim certificate, as respects claims made under subsection (19), or a final certificate, as respects claims made under subsection (20), by the Minister in respect of the digital game concerned, (b) as respects claims made under subsection (19), the interim certificate has expired, (c) the digital games development company, any company controlled by the digital games development company and each person who is either the beneficial owner of, or able directly or indirectly to control, more than 15 per cent of the ordinary share capital of the digital games development company (in this paragraph referred to as a ‘relevant person’), as the case may be, is not in compliance with all of the obligations imposed by the Tax Acts, the Capital Gains Tax Acts or the Value-Added Tax Consolidation Act 2010 in relation to— (i) the payments or remittances of taxes, interest or penalties required to be paid or remitted under those Acts, (ii) the delivery of returns, and (iii) requests to supply to an officer of the Revenue Commissioners accounts of, or other information about, any business carried on, by the digital games development company, or relevant person, as the case may be, (d) as respects a claim made under subsection (20), the qualifying expenditure amount is less than €100,000, (e) the digital games development company is an undertaking in difficulty, or (f) any company in an undertaking of which the digital games development company is part is subject to an outstanding recovery order following a previous decision of the European Commission that declared an aid illegal and incompatible with the internal market.
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(14)A digital games development company shall not make a claim for an interim digital games corporation tax credit under subsection (19) or a digital games corporation tax credit under subsection (20) where— (a) it would be reasonable to consider that any particular item of expenditure in the claim is inflated, (b) the company has obtained relief under Part 29 in respect of the expenditure, (c) the company has obtained relief under section 481 in respect of the expenditure, (d) the expenditure has been met directly or indirectly by grant assistance or any other assistance which is granted by or through— (i) the State or another Member State of the European Union, (ii) any board established by statute, any public or local authority or any other agency of the State or another relevant Member State or an institution, office, agency or other body of the European Union, or (iii) a state, other than the State or a Member State referred to in subparagraph (i), and any board, authority, institution, office, agency or other body in such state, (e) there is no commercial rationale for the corporate structure of the digital games development company— (i) for the development, financing, distribution or sale of the digital game, or (ii) for all of the purposes referred to in subparagraph (i), (f) the corporate structure of the digital games development company would hinder the Revenue Commissioners in verifying compliance with any of the provisions governing the relief, or (g) prior to making a claim, the company does not have such information and records as the Revenue Commissioners may reasonably require for the purposes of determining whether that claim complies with this section.
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(15)In carrying out their functions under this section, the Revenue Commissioners may— (a) consult with any person, agency or body of persons, as in their opinion may be of assistance to them, (b) notwithstanding any obligation as to secrecy or other restriction on the disclosure of information imposed by, or under, the Tax Acts or any other statute or otherwise, disclose any detail in an application or claim of a digital games development company under this section which they consider necessary for the purposes of such consultation, and (c) where they have reason to believe that financial arrangements have been entered into in contravention of subsection (16)(a), the Revenue Commissioners may seek any information they consider appropriate in relation to the arrangements or in relation to any person who is, directly or indirectly, a party to the arrangements.
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(16)A company shall not be regarded as a digital games development company in respect of an interim digital game or a qualifying digital game for the purposes of this section— (a) where the financial arrangements which the company enters into in relation to the interim digital game or the qualifying digital game are— (i) financial arrangements of any type with a person resident, registered or operating in a territory other than— (I) a Member State of the European Communities, or (II) a territory with the government of which, arrangements having the force of law by virtue of section 826(1), have been made, or (ii) financial arrangements under which funds are channelled, directly or indirectly, to, or through, a territory other than a territory referred to in clause (I) or (II) of subparagraph (i), other than where— (A) those arrangements relate to the development of part of the interim digital game or the qualifying digital game in a territory other than a territory referred to in clause (I) or (II) of subparagraph (i), (B) the digital games development company has sufficient records to enable the Revenue Commissioners to verify, in the case of development of an interim digital game or a qualifying digital game in such a territory, the amount of each item of expenditure on the development of the interim digital game or the qualifying digital game expended in the territory, whether expended by the digital games development company or by any other person, and (C) the digital games development company has such records in place to substantiate such expenditure in advance of making a claim under either or both of subsection (19) and subsection (20), (b) without prejudice to the generality of section 886, where the company fails to provide, when requested to do so by the Revenue Commissioners, for the purposes of verifying compliance with the provisions governing the relief or with any condition specified in a certificate issued by the Minister under subsection (4) or subsection (9), evidence to vouch each item of expenditure in the State or elsewhere on the development of the interim digital game and the qualifying digital game, whether expended by the digital games development company or by any other person engaged, directly or indirectly, by the digital games development company to provide goods, services or facilities in relation to such development and, in particular, such evidence shall include— (i) records required to be kept or retained by the digital games development company by virtue of section 886, and
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(ii) records, in relation to the development of the interim digital game and the qualifying digital game, required to be kept or retained by that other person by virtue of section 886, or which would be so required if that other person were subject to the provisions of that section, (c) in relation to a claim under subsection (20), where the company fails to provide, when requested to do so by the Revenue Commissioners, for the purposes of verifying compliance with the provisions governing the relief or with any condition specified in a certificate issued by the Minister under subsection (9), a copy of the digital game in such format and manner required under paragraph (d)(ii), (d) where the company, within such time as is specified in the regulations made under subsection (17)— (i) fails to notify the Minister in writing of the date of completion of the development of the qualifying digital game, and (ii) fails to provide to the Minister a copy of the completed digital game in such format and manner as may be specified in those regulations, (e) unless the company makes a claim under subsection (20), within the time referred to in paragraph (d), and has available, prior to making that claim, a compliance report, in such format and manner as is specified in the regulations made under subsection (17), which provides proof that— (i) the provisions of this section in so far as they apply in relation to the company have been met, (ii) where an interim certificate has been issued to the company in relation to an interim digital game, any conditions attaching to the interim certificate have been fulfilled, and (iii) any conditions attaching to the final certificate issued to the company in relation to a qualifying digital game have been fulfilled, or (f) where the company ceases to carry on the trade referred to in paragraph (b) of the definition of ‘digital games development company’ before a time which is 12 months after the date referred to in paragraph (d).
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(17)The Revenue Commissioners, with the consent of the Minister for Finance and, in relation to the matters specified in paragraphs (a) to (d), with the consent of the Minister, shall make regulations with respect to the administration by the Revenue Commissioners of the relief under this section and, without prejudice to the generality of the foregoing, regulations under this subsection may include provisions— (a) governing the application for interim certification or final certification, the timing of such applications, and the information and documents to be provided in or with such applications, (b) the information required to be included in the application made to the Minister by a digital games development company, (c) specifying the time within which a digital games development company shall notify the Minister of the date of completion of the development of a qualifying digital game, (d) specifying the time within which, and the format, number of copies and manner in which, a qualifying digital game shall be provided to the Minister, (e) governing the records that a digital games development company shall maintain or provide to the Revenue Commissioners, (f) governing the period for which, and the place at which, such records shall be maintained, (g) specifying the form and content of the compliance report that must be available in accordance with subsection (16)(e), the manner in which such report shall be made and verified, and the documents to accompany the report, (h) specifying the type of expenditure which may be treated as qualifying or eligible expenditure on the development of an interim digital game or a qualifying digital game, (i) specifying the currency exchange rate to be applied to expenditure on the development of an interim digital game or a qualifying digital game, (j) governing financial arrangements in accordance with subsection (16)(a), and (k) governing the payment of the specified amount by the Revenue Commissioners to the digital games development company.
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(18)The Revenue Commissioners shall, for the purpose of making regulations under subsection (17) in relation to the matter referred to in paragraph (h) of that subsection have regard to— (a) whether the type of expenditure relates to design, production or testing and the stage of development of the game in which the expenditure is incurred, (b) whether the type of expenditure is directly related to design, production and testing, and (c) the extent to which the type of expenditure is incurred directly by the digital games development company on design, production or testing.
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(19)Where the Minister has issued an interim certificate in relation to an interim digital game to a digital games development company and the provisions of this section have been complied with, a digital games development company may, in advance of the date of completion, make a claim for the interim digital games corporation tax credit where— (a) the claim is made within 12 months of the end of the accounting period in which the expenditure giving rise to the claim is incurred, (b) the interim certificate has not expired, and (c) the aggregate of all claims made pursuant to the interim certificate does not exceed 32 per cent of €25,000,000.
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(20)Where the Minister has issued a final certificate in relation to a qualifying digital game to a digital games development company and the provisions of this section have been complied with, a digital games development company may make a claim for the digital games corporation tax credit, less the amount, if any, already claimed in respect of the qualifying digital game under subsection (19).
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(21)A claim under subsection (19) or (20) shall be made in the return required under Part 41A, the specified return date of which immediately precedes the making of the claim.
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(22)Where a digital games development company makes a claim under subsection (19) or (20), the corporation tax of the company, for the qualifying period, shall be reduced by so much of an amount equal to the interim digital games corporation tax credit or the digital games corporation tax credit, as the case may be, as does not exceed that corporation tax and where the qualifying period is a period referred to in paragraph (b) of the definition of ‘qualifying period’, the corporation tax of an earlier accounting period shall be reduced in priority to the corporation tax of a later accounting period.
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(23)Subject to subsection (31), where a digital games development company has made a claim under subsection (19) or (20), and the amount of the credit exceeds the corporation tax of the qualifying period, as reduced by the corporation tax paid by the company in respect of that period, but before any reduction under subsection (22), the excess (in this section referred to as the ‘specified amount’) shall be paid to the digital games development company by the Revenue Commissioners.
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(24)An amount payable by the Revenue Commissioners to a digital games development company under subsection (23) shall be deemed to be an overpayment of corporation tax, for the purposes only of section 960H(2).
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(25)A claim in respect of a specified amount shall be deemed, for the purposes of section 1077F, to be a claim in connection with a credit and, for the purposes of determining an amount in accordance with section 1077F(3) or 1077F(5), a reference to an amount of tax that would have been payable for the relevant periods by the person concerned shall be read as if it were a reference to a specified amount.
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(26)Where the Revenue Commissioners have paid a specified amount to a digital games development company and it is subsequently found that payment of all or part of the amount is not authorised by this section (in this section referred to as the ‘unauthorised amount’), then— (a) the company, (b) any director of the company, or (c) any person referred to in subsection (13)(c), may be charged to tax under Case IV of Schedule D for the accounting period, or year of assessment, as the case may be, in respect of which the payment was made, in an amount equal to— (i) in the case of a company, 4 times, and (ii) in the case of an individual, one hundred fortieths, of so much of the specified amount as is not so authorised.
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(27)The circumstances in which an unauthorised amount arises shall include any circumstances where the amount was claimed under either or both subsection (19) and subsection (20), or paid in accordance with subsection (23) and— (a) the company made a claim contrary to either or both subsection (19) and subsection (20), or (b) the digital games development company— (i) fails to satisfy or comply with any condition or obligation under this section or regulations made under this section, (ii) fails to satisfy or comply with any condition or obligation specified in a certificate, or (iii) at any time on or before the time referred to in subsection (16)(f) fails to comply with any of the obligations referred to in subsection (13)(c).
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(28)Where, in accordance with subsection (26), an assessment is made or amended in respect of a specified amount, the amount so charged shall for the purposes of section 1080 be deemed to be tax due and payable and shall carry interest as determined in accordance with subsection (2)(c) of section 1080 as if a reference to the date when the tax became due and payable were a reference to the date the amount was paid by the Revenue Commissioners.
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(29)Notwithstanding section 851A, where a digital games development company is in receipt of relief from tax under this section, the Revenue Commissioners may disclose the following taxpayer information in accordance with State aid transparency requirements: (a) the name of the company; (b) the name of the digital game; (c) the number of the certificate of incorporation of the company; (d) in respect of the principal activity carried on by the company, the NACE classification code, as determined in accordance with Regulation (EC) No. 1893/2006 of the European Parliament and of the Council of 20 December 20066 establishing the statistical classification of economic activities NACE Revision 2 and amending Council Regulation (EEC) No. 3037/90 as well as certain EC Regulations on specific statistical domains; (e) the amount of interim digital games corporation tax credit or digital games corporation tax credit, as the case may be, granted, by reference to ranges set out in page 30, paragraph 166(vi) of the Guidelines on State Aid to Promote Risk Finance7 , inserted by Communication from the Commission (2014/C 198/02)8 ; (f) whether the company is— (i) a category of enterprise referred to in Article 2. 1 of Annex 1 to Commission Regulation (EU) No. 651/2014 of 17 June 20149 , or (ii) a category of enterprise which is larger than the categories of enterprise referred to in subparagraph (i); (g) the territorial unit, within the meaning of the NUTS Level 2 classification specified in Annex 1 to Regulation (EC) No. 1059/2003 of the European Parliament and of the Council of 26 May 200310 amended by Regulation (EC) No. 1888/2005 of the European Parliament and of the Council of 26 October 200511 , Commission Regulation (EC) No. 105/2007 of 1 February 200712 , Regulation (EC) No. 176/2008 of the European Parliament and of the Council of 20 February 200813 , Regulation (EC) No. 1137/2008 of the European Parliament and of the Council of 22 October 200814 , Commission Regulation (EU) No. 31/2011 of 17 January 201115 , Council Regulation (EU) No. 517/2013 of 13 May 201316 , Commission Regulation (EU) No. 1319/2013 of 9 December 201317 , Commission Regulation (EU) No. 868/2014 of 8 August 201418 , Commission Regulation (EU) No. 2066/2016 of 21 November 201619 , Regulation (EU) 2017/2391 of the European Parliament and of the Council of 12 December 2017201 , and Commission Delegated Regulation 2019/1755 of 8 August 201921 , in which the company is located; (h) the date on which the interim digital games corporation tax credit or digital games corporation tax credit, as the case may be, is granted.
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(30)In relation to information provided to the Minister for Tourism, Culture, Arts, Gaeltacht, Sport and Media by a company for the purposes of obtaining an interim or final certificate under this section, the Department of Tourism, Culture, Arts, Gaeltacht, Sport and Media, in processing such information, shall, for the purposes of section 851A, be deemed to be engaged as a service provider with respect to the administration of this section.
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(31)The Revenue Commissioners shall not pay a specified amount to a digital games development company in respect of an interim or final certificate issued after 31 December 2025.
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(32)Every regulation made under this section shall be laid before Dáil Éireann as soon as may be after it is made and, if a resolution annulling the regulation is passed by Dáil Éireann within the next 21 days on which Dáil Éireann has sat after the regulation is laid before it, the regulation shall be annulled accordingly, but without prejudice to the validity of anything previously done thereunder.”.
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(2)Subsection (1) shall come into operation on such day as the Minister for Finance may appoint by order.
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Amendment of section 486C of Principal Act (relief from tax for certain start-up companies) 34. Section 486C of the Principal Act is amended— (a) in subsection (1)(a), by the substitution of the following definition for the definition of “relevant period”: “ ‘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— (i) 5 years after that date where the company commences to carry on the qualifying trade on or after 1 January 2018, or (ii) 3 years after that date in all other cases;”, and (b) in subsection (2)(a), by the substitution of “31 December 2026” for “31 December 2021”.
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Amendment of Part 35B of Principal Act (implementation of Articles 7 and 8 of Council Directive (EU) 2016/1164 of 12 July 2016 (controlled foreign companies)) 35. Part 35B of the Principal Act is amended by the substitution of the following section for section 835YA: “835YA. (1) In this section, ‘listed territory’ means— (a) in relation to an accounting period beginning on or after 1 January 2021 but before 1 January 2022, a territory included in Annex 1 of the Council conclusions on the revised EU list of non-cooperative jurisdictions for tax purposes22 , as replaced by the EU list of non-cooperative jurisdictions for tax purposes Report by the Code of Conduct Group (business taxation) suggesting amendments to the Annexes to the Council conclusions of 18 February 202023 , (b) in relation to an accounting period beginning on or after 1 January 2022, a territory included in Annex 1 of the Council conclusions on the revised EU list of non-cooperative jurisdictions for tax purposes24 .
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(2)Where, in an accounting period of a controlled foreign company, the territory in which the controlled foreign company is resident is a listed territory, sections 835T, 835U and 835V shall not apply in respect of that accounting period.”.
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Amendment of section 840A of Principal Act (interest on loans to defray money applied for certain purposes) 36. Section 840A of the Principal Act is amended— (a) in subsection (1), by the insertion of the following definition: “ ‘loan’ includes a promissory note and any other agreement or arrangement having a similar effect;”, and (b) by the substitution of the following subsection for subsection (2): “(2) Subject to subsections (3), (6), (7) and (8), in computing the amount of the profits or gains to be charged to corporation tax under Schedule D, no sum shall be deducted in respect of— (a) any interest payable on a loan to a company (in this section referred to as the ‘investing company’) used in acquiring assets from a company which, at the time of the acquiring of the assets, was connected with the investing company, where the loan is made to the investing company by a person who is connected with the investing company, or (b) any interest payable on any form of refinancing of a loan referred to in paragraph (a).”.
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Chapter 6
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Capital Gains Tax Amendment of section 604 of Principal Act (disposals of principal private residence) 37. Section 604 of the Principal Act is amended by the insertion of the following subsection after subsection (14): “(15) (a) This subsection applies where an individual disposes of or of an interest in an asset (being an asset within subsection (2) or (11)) by way of a lottery or game with prizes and the proceeds of the lottery or game exceed the market value of the asset on the date of the disposal. (b) Where this subsection applies, the consideration for the purposes of computing any chargeable gain accruing on the disposal referred to in paragraph (a) shall be the whole of the proceeds of the lottery or game referred to in paragraph (a) or, where there is more than one prize, so much of those proceeds as are referable to the asset referred to in paragraph (a). (c) Where— (i) a gain accrues to an individual on a disposal referred to in paragraph (a), and (ii) apart from this subsection relief would be given under this section in respect of the disposal referred to in paragraph (a), then that relief shall be given in respect of the gain only to the extent (if any) to which such relief would be given if, in computing the chargeable gain accruing on the disposal, there were excluded from the computation— (I) the amount by which the consideration for the disposal of the asset exceeds the market value of the asset on the date of the disposal, and (II) such proportion of the incidental costs to the individual of the disposal as would be referable to the amount referred to in clause (I).”.
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Transfers arising from certain mergers under Companies Act 2014 38. Chapter 1 of Part 20 of the Principal Act is amended by the insertion of the following section after section 617: “617A. The transfer of all the assets and liabilities of a company which is a wholly owned subsidiary of another company (in this section referred to as the ‘parent company’) to the parent company as a consequence of a merger by absorption to which Chapter 3 of Part 9 of, or Chapter 16 of Part 17 of, the Companies Act 2014 applies shall not be treated as involving a disposal by the parent company of the share capital which it held in the subsidiary company immediately before the merger.”.
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Amendment of section 630 of Principal Act (interpretation (Part 21)) 39. Section 630 of the Principal Act is amended by the substitution of the following definition for the definition of “transfer”: “ ‘transfer’ means the transfer by a company (other than a transfer referred to in section 633D) of the whole or part of its trade in the circumstances set out in section 631(1) or 634(2), as the case may be;”.
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PART 2
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Excise Rates of tobacco products tax 40. The Finance Act 2005 is amended with effect as on and from 13 October 2021 by the substitution of the following Schedule for Schedule 2: “SCHEDULE 2 Rates of Tobacco Products Tax (With effect as on and from 13 October 2021) ”.
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Amendment of Chapter 1 of Part 2 of Finance Act 1999 (mineral oil tax) 41. The Finance Act 1999 is amended— (a) in section 94, in subsection (3A), by the deletion of “, save where the reference occurs in subsections (1) and (5)(c) of section 99A”, and (b) in section 99A(1), in the definition of “qualifying motor vehicle”, by the substitution of the following paragraph for paragraph (b): “(b) a motor vehicle designed and constructed for the carriage of passengers by road, and falling within Category M2 or Category M3 referred to in Article 4(1)(a) of Regulation (EU) 2018/858 of the European Parliament and of the Council of 30 May 201825 ;”.
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Amendment of Schedule 2 to Finance Act 1999 (mineral oil tax) 42. The Finance Act 1999 is amended with effect as on and from 1 April 2022 by the substitution of the following Schedule for Schedule 2: “SCHEDULE 2 Rates of Mineral Oil Tax ”.
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Amendment of Chapter 1 of Part 2 of Finance Act 2003 (alcohol products tax) 43. The Finance Act 2003 is amended— (a) in section 73, in subsection (1)— (i) by the deletion of the definition of “CN Code”, and (ii) by the substitution of the following definition for the definition of “Directive”: “ ‘Directive’ means Council Directive 92/83/EEC of 19 October 199226 , as amended by Council Directive (EU) 2020/1151 of 29 July 202027 ;”, (b) in section 77— (i) by the substitution of the following paragraph for paragraph (c): “(c) to have been used as part of the manufacturing process of any product not for human consumption, where the alcohol has been denatured in accordance with the requirements of any Member State applicable to that use, and such denatured alcohol— (i) has been incorporated into the product concerned, or (ii) is used for maintenance and cleaning of the manufacturing equipment used for the manufacturing process concerned,”, and (ii) by the substitution of the following paragraph for paragraph (d): “(d) to have been completely denatured in accordance with the requirements of another Member State, where it has been released for consumption, where such requirements have been notified to the European Commission and accepted in accordance with paragraphs 3 and 4 of Article 27 of the Directive,”, and (c) by the insertion of the following section after section 78A: “Certification of small producers 78B. (1) A producer of alcohol products established in the State— (a) availing of relief under section 78A in the State, or (b) availing of reduced rates of duty in accordance with Article 4, 9a, 13a, 18a or 22 of the Directive in another Member State, shall, in accordance with such conditions as the Commissioners may prescribe, provide declarations as to— (i) the compliance of the producer with the criteria set out in Article 4, 9a, 13a, 18a or 22 of the Directive, as may be applicable, and (ii) the total annual production of the producer in the previous year.
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(2)A consignor of alcoholic products referred to in subsection (1) shall ensure that the declarations referred to in that subsection are made in the electronic administrative document (within the meaning of Chapter 2A of Part 2 of the Finance Act 2001 ) or the simplified accompanying document (within the meaning of Part 2 of the Finance Act 2001 ), as the case may be, relating to the consignment of those products.”.
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Amendment of section 78A of Finance Act 2003 (relief for small breweries) 44. Section 78A of the Finance Act 2003 is amended, in subsection (1), by the substitution of “brewed in a brewery” for “brewed in the European Union in a brewery”.
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Waiver of excise duty on renewal of certain liquor licences, public dancing licences and certificates of registration of clubs 45. (1) Subject to subsection (3), no duty of excise shall be chargeable, leviable or payable under section 43 of the Finance (1909-1910) Act 1910 on the renewal, for the period from 1 October 2021 to 30 September 2022, of the following licences for the sale of intoxicating liquor specified in the First Schedule to that Act: (a) retailers’ on-licences; (b) passenger vessel licences; (c) railway restaurant car licences; (d) passenger aircraft licences.
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(2)Subject to subsection (3), no duty of excise shall be chargeable, leviable or payable— (a) under section 171
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(1)of the Finance Act 2001 on the renewal, for the period from 1 October 2021 to 30 September 2022, of a licence granted under section 2 of the Intoxicating Liquor (National Concert Hall) Act 1983 , (b) under section 105
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(1)of the Finance Act 2000 on the renewal, for the period from 1 October 2021 to 30 September 2022, of a licence granted under section 62 of the National Cultural Institutions Act 1997 , (c) under section 21
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(5)of the Intoxicating Liquor Act 2003 on the renewal, for the period from 1 October 2021 to 30 September 2022, of a licence issued under section 21(3) of that Act, (d) under section 1
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(7)of the Intoxicating Liquor (Breweries and Distilleries) Act 2018 on the renewal, for the period from 1 October 2021 to 30 September 2022, of a producer’s retail licence issued under section 1(2) of that Act authorising the sale of intoxicating liquor in accordance with section 1(6)(a) of that Act, or (e) under section 1
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(8)of the Intoxicating Liquor (National Conference Centre) Act 2010 on the renewal, for the period from 1 October 2021 to 30 September 2022, of a licence issued under section 1(2) of that Act.
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(3)Subsections (1) and (2) shall apply to licences referred to in those subsections that expired on 30 September 2021.
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(4)No duty of excise shall be chargeable, leviable or payable— (a) under section 78
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(2)of the Finance Act 1980 on the renewal, in the year 2021, of a public dancing licence granted under section 2 of the Public Dance Halls Act 1935 , or (b) under section 48
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(2)of the Finance Act 1989 on the renewal, in the year 2021, of a certificate of registration of a club granted under the Registration of Clubs (Ireland) Act 1904 .
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Waiver of excise duty on special exemption orders 46. No duty of excise shall be chargeable, leviable or payable under section 78
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(4)of the Finance Act 1980 on a special exemption order granted under section 5 of the Intoxicating Liquor Act 1927 in respect of dates falling within the period beginning on 22 October 2021 and ending on 31 December 2021.
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Amendment of Part 2 of Finance Act 2001 (excise) 47. (1) Part 2 of the Finance Act 2001 is amended— (a) in section 96— (i) in subsection (1)— (I) in the definition of “authorised warehousekeeper”— (A) in paragraph (a), by the substitution of “process, hold or store” for “process, or hold”, and (B) in paragraph (b), by the substitution of “authority” for “authorities”, (II) by the substitution of the following definition for the definition of “Directive”: “ ‘Directive’ means Council Directive (EU) No. 2020/262 of 19 December 201928 ;”, (III) in the definition of “European Union”, by the substitution of the following paragraph for paragraph (f): “(f) in the case of France, the territories referred to in Article 349 and Article 355(1) of the Treaty on the Functioning of the European Union, and”, (IV) in the definition of “registered consignee”, by the deletion of “other than an authorised warehousekeeper or an exempt consignee,” in each place where it occurs, (V) in the definition of “registered consignor”— (A) by the substitution of “only dispatch” for “consign” in each place where it occurs, and (B) by the substitution of “Article 201 of the Council Regulation” for “Article 79 of Council Regulation (EEC) No. 2913/92” in each place where it occurs, (VI) in the definition of “suspension arrangement”, by the substitution of “held, stored or moved” for “held or moved”, (VII) in the definition of “tax warehouse”, by the substitution of “held, stored, received or dispatched” for “held, received or dispatched” in each place where it occurs, and (VIII) by the insertion of the following definitions: “ ‘certified consignee’ means, as the case requires— (a) a person registered with the Commissioners in accordance with section 109RA(4) in order to receive, in the course of business, excisable products that have been released for consumption in another Member State and then moved to the State, or (b) a person registered with a competent authority in another Member State in order to receive, in the course of business, excisable products that have been released for consumption in the Member State of dispatch and then moved to the first-mentioned Member State; ‘certified consignor’ means, as the case requires, either— (a) a person registered with the Commissioners in accordance with section 109RA(4) in order to dispatch, in the course of business, excisable products that have been released for consumption in the State to another Member State, or (b) a person registered with the competent authority of another Member State in order to dispatch, in the course of business, excisable products that have been released for consumption in that Member State and then moved to another Member State;
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‘Commission Regulation’ means Commission Regulation (EC) No. 684/2009 of 24 July 200929 ; ‘computerised system’ means the system referred to in Article 1 of Decision (EU) 2020/263 of the European Parliament and of the Council of 15 January 202030 ; ‘consignment’ has the meaning, as the case requires, assigned to it by section 109B or section 109Q; ‘Council Regulation’ means Regulation (EU) No. 952/2013 of the European Parliament and of the Council of 9 October 201331 laying down the Union Customs Code; ‘declarant’ means the declarant as defined in point (15) of Article 5 of the Council Regulation; ‘destination Member State’, in respect of a consignment, means the Member State where, as the case may be, the designated consignee, place of exportation, or certified consignee for that consignment is located; ‘electronic change of destination document’ means a document that complies with the requirements set out in Table 3 of Annex 1 of the Commission Regulation; ‘importation’ means the release of goods for free circulation in accordance with Article 201 of the Council Regulation; ‘irregular entry’ means an entry of goods into the territory of the European Union, which have not been placed under release for free circulation in accordance with Article 201 of the Council Regulation and for which a customs debt under Article 79(1) of that Regulation has been incurred, or would have been incurred if the goods had been subject to customs duty; ‘irregularity’ means an occurrence during a movement of excisable products made under Chapter 2B that has not been ended in accordance with the provisions of that Chapter; ‘irregular release’ means an occurrence giving rise to a release for consumption during a movement of excisable products made under Chapter 2A that has not been ended in accordance with the provisions of that Chapter; ‘Member State of dispatch’ means the Member State from which a consignment is dispatched; ‘paper confirmation of receipt’ has the meaning, as the case requires, assigned to it by section 109N(1), section 109TA(1) or section 109VA(3); ‘place of importation’ means a place where excisable products are released for free circulation in accordance with Article 201 of the Council Regulation; ‘report of receipt’ means a report by means of the computerised system, in accordance with (as the case may be)— (a) Article 24(1) of the Directive, certifying that a consignment has been received by a designated consignee, or (b) Article 37(1) of the Directive certifying a consignment has been received by a certified consignee;
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‘SEED register’ means the register of economic operators and of premises authorised as tax warehouses that is required to be maintained by the Commissioners under Article 19 of Council Regulation (EU) No. 389/201232 ;”, and (ii) by the insertion of the following subsection after subsection (3): “(4) A reference in any other enactment to Council Directive No. 2008/118/EC of 16 December 200833 shall be construed as a reference to the Directive.”, (b) by the substitution of the following section for section 98: “Importation from outside territory of European Union 98. (1) The Commissioners may require that, on the importation of excisable products from outside the territory of the European Union, the person who declares such products for free circulation in accordance with Article 201 of the Council Regulation shall provide such information as they require for the correct accounting for, and payment of, any excise duty that is payable on such products.
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(2)Where the excisable products referred to in subsection (1) are to be moved upon release for free circulation from the place of importation in the State under a suspension arrangement, the declarant or any person directly or indirectly involved in the accomplishment of customs formalities in accordance with Article 15 of the Council Regulation shall provide to the Commissioners— (a) the unique excise number in the SEED register identifying the registered consignor for the movement, (b) the unique excise number in the SEED register identifying the consignee to whom the excisable products are being dispatched, and (c) if the movement is to be made in accordance with Chapter 2A, such evidence as the Commissioners may require to show that the imported excisable products are intended to be dispatched from the State to another Member State.”, (c) in section 98A— (i) by the substitution of the following subsection for subsection (1): “(1) In this Part ‘release for consumption’ means— (a) any release, including irregular release, of excisable products from a suspension arrangement, (b) any production, processing or extraction, including irregular production, processing or extraction, of excisable products outside a suspension arrangement, (c) any importation of excisable products from outside the European Union or any arrival in the State of products from within the European Union, except where the excisable products are, immediately upon such importation or arrival, placed under a suspension arrangement, or (d) any irregular entry of excisable products, except where the customs debt was extinguished under points (e), (f), (g) or (k) of Article 124(1) of the Council Regulation.”, (ii) in subsection (3), by the insertion of “or stored” after “held”, (iii) by the substitution of the following subsection for subsection (4): “(4) Without prejudice to subsection (1), excisable products shall be deemed not to have been released for consumption where they are shown to the satisfaction of the Commissioners to have been totally or partially lost— (a) during production, processing, holding or storage in the State, or (b) in the course of movement to, from or within the State, under a suspension arrangement, and where such loss is shown to their satisfaction to have been— (i) due to unforeseen circumstances or force majeure, (ii) in the case of a loss referred to in paragraph (a), due to the nature of the excisable products, or (iii) the result of destruction in accordance with such procedures as the Commissioners may require.”,
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(iv) by the insertion of the following subsections after subsection (4): “(4A) Where excisable products are shown to the satisfaction of the Commissioners to have been partially lost during transport to the State from another Member State, and the loss is shown to their satisfaction to have been due to the nature of the excisable products, the products shall, unless an officer has reasonable grounds to suspect that a fraud or an irregular release has occurred in connection with the excisable products, be deemed not to have been released for consumption in so far as the amount of loss falls below a common partial loss threshold established in delegated acts adopted by the Commission in accordance with Article 51 of the Directive. (4B) Where the Commissioners are satisfied that destruction or loss, as referred to in subsection (4), of the excisable products has been established and that no release for consumption has occurred, any security provided in accordance with section 109(7) or 109A(8), as the case may be, shall be released fully or partially, as appropriate, upon the production of satisfactory proof of such destruction or loss.”, (v) in subsection (5), by the substitution of “this section” for “subsection (4)”, and (vi) in subsection (7), by the insertion of “and in such circumstances, the Commissioners shall inform the competent authority of the Member State of dispatch” after “so occurred”, (d) by the insertion of the following section after section 98A: “Chargeability of excisable products released for consumption 98B. (1) In the case of a movement of excisable products delivered to the State in accordance with Chapter 2B, excise duty shall not be chargeable in the State on such products where the products are shown to the satisfaction of the Commissioners to have been totally or partially lost in the course of movement to the State from the Member State in which they were released for consumption, and where such loss is shown to have been— (a) due to unforeseen circumstances or force majeure, or (b) the result of destruction in accordance with such procedures as the Commissioners may require.
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(2)Where excisable products are shown to the satisfaction of the Commissioners to have been partially lost in the State during transport from another Member State in which they were released for consumption, and the loss is shown to the satisfaction of the Commissioners to have been due to the nature of the excisable products, excise duty on those products shall, unless an officer has reasonable grounds to suspect that a fraud or an irregularity has occurred in connection with the excisable products, not be chargeable in so far as the loss falls below a common partial loss threshold established in delegated acts adopted by the Commission in accordance with Article 51 of the Directive.
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(3)Where the Commissioners are satisfied that destruction or loss, as referred to in subsection (1), of the excisable products has been established and that excise duty shall not be chargeable on those excisable products, the security referred to in section 109SB(1) or 109U, as the case may be, shall be released fully or partially, as appropriate, upon the production of satisfactory proof of such destruction or loss.
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(4)In the case of an irregularity occurring during the movement of excisable products released for consumption in another Member State, excise duty shall become chargeable on the products in the State if the irregularity occurred in the State or, where it is not possible to determine where the irregularity occurred, if it is detected in the State.
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(5)For the purposes of this section, excisable products are destroyed when they are rendered unusable as excisable products.”, (e) in section 99— (i) by the substitution of the following subsection for subsection (3): “(3) A registered consignor is liable for payment of the excise duty on any consignment dispatched by such registered consignor to another Member State under section 109E(1)(b) or to a place in the State, and that liability is fully or partly discharged where, and to the extent that, the consignment concerned has been (as the case may be)— (a) received, under a suspension arrangement, into a tax warehouse in the State, or (b) ended in accordance with subsection (1) of section 109K, and evidence to that effect has been received in accordance with subsection (2) of that section.”, (ii) by the insertion of the following subsections after subsection (4): “(4A) A certified consignee is liable for payment of excise duty on excisable products delivered to such certified consignee in the State in accordance with Chapter 2B. (4B) Where excisable products are delivered to a person in the State in accordance with Chapter 2B and the person is not registered with the Commissioners in accordance with section 109RA(4), that person shall be liable for payment of excise duty on the excisable products.”, (iii) by the substitution of the following subsection for subsection (5): “(5) Without prejudice to the liability of any person under subsection (1), (3), (4), (4A) or (4B), where an irregular release of excisable products from a suspension arrangement or an irregularity in a movement of excisable products in accordance with Chapter 2B gives rise to a liability to excise duty, any person who knowingly participated in that irregular release or irregularity, as the case may be, is liable for payment of that excise duty.”, (iv) by the insertion of the following subsection after subsection (6): “(6A) Where a tax representative is not appointed in accordance with section 109U or a tax representative so appointed fails to comply with the requirements of that section or with regulations made under section 153, the person liable to pay the excise duty is the person to whom the excisable products are consigned.”, (v) in subsection (7)— (I) by the insertion of “or there is an irregular entry of such products into the State” after “outside the European Union”, (II) in paragraph (a), by the substitution of “Article 201 of the Council Regulation, or any person who participated in the irregular entry, as the case may be” for “Article 79 of Council Regulation (EEC) No. 2913/92”, and
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(III) in paragraph (b)— (A) by the insertion of “or in the case of an irregular entry of such products” after “free circulation”, (B) in subparagraph (i), by the insertion of “or participates in the irregular entry of” after “who imports”, and (C) in subparagraph (ii), by the insertion of “or irregular entry” after “importation” in each place where it occurs, (vi) in subsection (8)— (I) by the insertion of “, extracted or processed” after “produced”, (II) in paragraph (a), by the insertion of “, extractor or processor” after “the producer”, and (III) in paragraph (b), by the insertion of “, extraction or processing” after “the production” in each place where it occurs, (vii) in subsection (9)— (I) in paragraph (b), by the insertion of “, held or stored” after “kept”, and (II) in subparagraph (ii), by the insertion of “held, stored” after “kept,”, and (viii) in subsection (10)— (I) in paragraph (b)— (A) by the insertion of “, storage” after “holding”, and (B) by the insertion of “or stored” after “held”, and (II) by the substitution of “who holds or stores them” for “who holds them”, (f) in section 104— (i) in subsection (5)— (I) in paragraph (a), by the substitution of “section 109SA or section 109VA,” for “section 109V, or”, (II) in paragraph (b), by the substitution of “section 109W, or” for “section 109W.”, and (III) by the insertion of the following paragraph after paragraph (b): “(c) have been dispatched to another Member State in accordance with section 109SA or section 109VA, where an irregularity occurred or was detected during the movement.”, and (ii) by the insertion of the following subsection after subsection (5): “(5A) A repayment of excise duty for the purposes of subsection (5)(a) shall be on the basis of a report of receipt received from the competent authority in the destination Member State in accordance with section 109SC(4) or 109VA(3), as the case may be.”, (g) in section 108A— (i) in subsection (1)(b), by the insertion of “or storage” after “holding”, and (ii) in subsection (4), by the insertion of “or stored” after “held” in each place where it occurs, (h) in section 109— (i) in subsection (3)(i), by the substitution of “held, stored or processed” for “held or processed”, (ii) in subsection (4)— (I) by the substitution of “subsections (2), (2A) and (3)” for “subsections (2) and (3)”, and (II) in paragraph (b), by the substitution of “held or stored” for “held”, (iii) in subsection (7)(a), by the substitution of “held or stored” for “held”, (iv) in subsection (11), by the substitution of “held or stored” for “held”, and
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(v) in subsection (12)(h), by the substitution of “held, stored or processed” for “held or processed”, (i) in section 109B— (i) in the definition of “administrative reference code”, by the substitution of “Article 20(3)” for “Article 21(3)”, (ii) in the definition of “customs electronic data”, by the substitution of “Chapter 2 of Title II of Commission Implementing Regulation (EU) 2015/2447 of 24 November 201534 ” for “Chapter 3 of Title IV of Commission Regulation (EEC) No. 2454/93 of 2 July 1993”, (iii) in the definition of “customs office of exit”, by the substitution of “Article 329(5) of Commission Implementing Regulation (EU) 2015/2447” for “Article 793(2) of Commission Regulation (EEC) No. 2454/93”, (iv) in the definition of “customs office of export”, by the substitution of “Article 221 of Commission Implementing Regulation (EU) 2015/2447” for “Article 161(5) of Council Regulation (EEC) No. 2913/92”, (v) by the insertion of the following definition: “ ‘customs special procedure’ means any one of the special procedures provided for under the Council Regulation relating to the customs supervision to which non-European Union goods are subjected upon their entry into the European Union customs territory, temporary storage, free zones or free warehouses, as well as any of the procedures referred to in Article 210 of that Regulation;”, (vi) in the definition of “electronic administrative document”, by the substitution of “Article 20(2)” for “Article 21(2)”, (vii) in the definition of “small wine producer”— (I) by the substitution of “per wine year” for “per year”, (II) by the substitution of “Article 48” for “Article 40”, and (III) by the substitution of “Articles 14 to 31” for “Chapters III and IV”, and (viii) by the deletion of the definitions of “Commission Regulation”, “computerised system”, “customs suspensive arrangement”, “destination Member State”, “Member State of dispatch”, “paper confirmation of receipt”, “place of importation”, “report of receipt” and “SEED register”, (j) in section 109C— (i) in subsection (2)(a), by the substitution of “the Directive” for “Council Directive No. 2008/118/EC”, and (ii) in subsection (3), by the substitution of “customs special procedure” for “customs suspensive arrangement”, (k) in section 109E— (i) in subsection (2)— (I) in paragraph (c), by the substitution of “exportation,” for “exportation, or”, (II) in paragraph (d), by the substitution of “consignee, or” for “consignee,” and (III) by the insertion of the following paragraph after paragraph (d):
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“(e) the customs office of exit, where that office is also the customs office of departure for the external transit procedure where provided for in Article 189(4) of Commission Delegated Regulation (EU) 2015/2446 of 28 July 201535 ,”, (ii) in subsection (4)— (I) by the substitution of the following paragraph for paragraph (a): “(a) the administrative reference code, and”, and (II) by the substitution of “such code” for “such document”, and (iii) by the insertion of the following subsection after subsection (4): “(5) Where an officer deems it appropriate, the officer may request the consignor, or any person acting on behalf of such consignor, to make available a printed copy of the electronic administrative document or a commercial document with the same information.”, (l) in section 109H— (i) in subsection (1), by the insertion of “, using the computerised system,” after “electronic administrative document”, (ii) in subsection (2)— (I) by the insertion of “or the consignee of the excisable products” after “destination of the consignment”, and (II) by the insertion of “and, for that purpose, the consignor shall submit a draft electronic change of destination document to the Commissioners using the computerised system” after “subsection 109E(2)”, (iii) in subsection (4), by the insertion of the following paragraph after paragraph (b): “(c) Paragraphs (a) and (b) shall not apply to the movements referred to in paragraphs (c) and (e) of section 109E(2).”, and (iv) by the insertion of the following subsections after subsection (4): “(5) (a) In the case of a consignment from another Member State dispatched to a place of exportation in the State, where the excisable products are no longer to be taken out of the European Union customs territory, the Commissioners shall, subject to subsection (7), by means of the computerised system notify the competent authority in the Member State of dispatch of that fact as soon as they become aware thereof. (b) In the case of a consignment dispatched from a place in the State to a place of exportation in another Member State, where the excisable products are no longer to be taken out of the European Union customs territory, the Commissioners shall, upon receipt of notification of that fact from the Member State of export, forward the notification without delay to the consignor.
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(6)On receipt of a notification under subsection (5)(b), the consignor shall cancel the electronic administrative document in accordance with subsection (1) or amend the destination of the products in accordance with subsection (2), as appropriate.
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(7)A notification referred to in subsection (5)(a) may, until 13 February 2024, be made by means other than the computerised system.”, (m) in section 109I— (i) by the substitution of the following subsection for subsection (5): “(5) Where a consignment is under cover of a paper document, the consignor may, in accordance with such procedures as the Commissioners may prescribe— (a) change the destination for that consignment, as recorded in that paper document, to any other destination that is allowable under section 109E(2), or (b) in the case of a consignment of mineral oil, split the consignment in accordance with section 109H(3A), and shall inform the Commissioners before the change of destination or the splitting of the consignment is initiated.”, and (ii) by the insertion of the following subsection after subsection (5): “(6) Where the computerised system is unavailable to the consignor in the cases referred to in section 109E(2)(c) and (e)— (a) the consignor shall provide a copy of the paper document referred to in subsection (1)(b) to the declarant, and (b) the declarant, on receipt of the paper document, shall provide the customs office of export with a copy of that paper document, the contents of which shall correspond to the excisable products declared in the export declaration, or the unique identifier of the paper document.”, (n) in section 109J— (i) in subsection (6)(b), by the substitution of “Article 26(1)” for “Article 26(3)”, (ii) in subsection (7), by the substitution of “subsection (1)(c)” for “section 109J(1)(c)”, and (iii) by the insertion of the following subsection after subsection (7): “(8) In the case of a consignment referred to in subsection (1)(d)— (a) the declarant shall provide the Commissioners with the administrative reference code indicating the excisable products referred to in the export declaration, (b) before the release for export of the excisable products, the Commissioners shall verify that the data in the electronic administrative document correspond to those contained in the export declaration, and (c) where there are any inconsistencies between the electronic administrative document and the export declaration, the Commissioners shall notify the competent authority in the Member State of dispatch using the computerised system.”, (o) in section 109K(1)— (i) in paragraph (a), by the substitution of “consignment,” for “consignment, and”, (ii) in paragraph (b), by the substitution of “European Union, or” for “European Union.”, and (iii) by the insertion of the following paragraph after paragraph (b):
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“(c) in a case referred to in section 109E(2)(e), when the goods are placed under the external transit procedure.”, (p) in section 109L, by the insertion of the following subsection after subsection (3): “(4) Where a consignment begins in the State, the Commissioners shall forward the report of receipt to the consignor.”, (q) in section 109M(1)— (i) by the substitution of the following paragraph for paragraph (a): “(a) a consignor in the State and has been duly verified, or”, and (ii) in paragraph (b), by the substitution of “Article 21(1)” for “Article 21. 5”, (r) in section 109N(3), by the substitution of “authority” for “authorities”, (s) in section 109O(2), by the substitution of “Commission Delegated Regulation (EU) 2018/273 of 11 December 201736 ” for “Commission Regulation EC No. 884/2001 of 24 April 2001”, (t) by the substitution of the following section for section 109Q: “Interpretation (Chapter 2B) 109Q. In this Chapter— ‘consignment’ means the single movement to a Member State of a specific quantity of excisable products that have been released for consumption in another Member State; ‘electronic simplified administrative document’ means the electronic simplified administrative document referred to in Article 36(1) of the Directive; ‘simplified administrative reference code’ means the unique simplified administrative reference code to be assigned to the draft electronic simplified administrative document, in accordance with Article 36(2) of the Directive.”, (u) in section 109R(2), by the substitution of “the Directive” for “Council Directive No. 2008/118/EC”, (v) by the insertion of the following section after section 109R: “Movement of excisable products for commercial purposes 109RA. (1) (a) A consignment may be dispatched from the State to another Member State for commercial purposes only where the person who dispatches it is a certified consignor and the consignment is to be delivered to a certified consignee. (b) A consignment may be delivered to the State for commercial purposes only where the person who receives it is a certified consignee and the person who dispatches it is a certified consignor.
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(2)Where a consignment is dispatched from the State to another Member State in accordance with subsection (1)(a)— (a) the consignment begins when the excisable products leave the premises of a certified consignor or any other location in the State, and (b) the certified consignor shall notify the Commissioners using the computerised system of the consignment before it begins.
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(3)Where a consignment is delivered to the State in accordance with subsection (1)(b)— (a) the certified consignee shall notify the Commissioners using the computerised system of the consignment before it begins, and (b) the consignment shall end when the certified consignee has taken delivery of the excisable products at his or her premises, or at any other location in the State.
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(4)(a) A certified consignor in the State and a certified consignee in the State shall be registered as such with the Commissioners for such periods and subject to such conditions as the Commissioners may think fit to impose in any particular case. (b) The Commissioners may at any time for reasonable cause revoke any registration granted under paragraph (a), or vary its terms. (c) Where the Commissioners propose to revoke a registration under paragraph (b), they shall notify the holder of that registration in writing of that intention, and afford such holder an opportunity to make representations to them in relation to the matter.
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(5)(a) Where a certified consignor or certified consignee sends or receives excisable products only occasionally, the Commissioners shall limit the registration of the certified consignor or certified consignee (as the case may be) to— (i) a specified quantity of excisable products, (ii) a single consignee, in the case of a certified consignor, or a single consignor, in the case of a certified consignee, and (iii) a specified period of time, (in this subsection referred to as a ‘temporary registration’) and the temporary registration may be limited to a single movement of excisable products. (b) The Commissioners may grant a temporary registration to a person who is not a certified consignor or a certified consignee where excisable products are dispatched by or delivered to the person for commercial purposes.”, (w) by the insertion of the following sections after section 109S: “Consignment of excisable products, duty-paid in the State, to another Member State for commercial purposes 109SA. (1) Except where section 109VA applies, where a certified consignor dispatches a consignment from the State to another Member State, the certified consignor shall submit a draft electronic simplified administrative document to the Commissioners using the computerised system.