Finance (No. 2) Act 2008

Finance (No. 2) Act 2008 Skip to content Disclaimer Feedback Helpdesk Gaeilge Léim go dtí an t-ábhar Séanadh Aiseolas Deasc chabhrach English Gaeilge English Produced by the Office of the Attorney General Táirgthe ag Oifig an Ard-Aighne Home Legislation Acts of the Oireachtas Statutory Instruments Pre-1922 Legislation Constitution External Resources Bills (Houses of the Oireachtas) Iris Oifigiúil / Official Gazette Revised Acts (LRC) Classified List of Legislation (LRC) Translations (acts.ie) Translations (Houses of the Oireachtas) Government Publications for Sale EU Law (EUR-Lex) FAQ Disclaimer Feedback Helpdesk Search Baile Reachtaíocht Achtanna an Oireachtais Ionstraimí Reachtúla Reachtaíocht Réamh-1922 Bunreacht Acmhainní Seachtracha Billí (Tithe an Oireachtais) Iris Oifigiúil Achtanna Athbhreithnithe (CAD) (An Coimisiún um Athchóiriú an Dlí) Liosta Rangaithe Reachtaíochta Aistriúcháin (achtanna.ie) Aistriúcháin (Tithe an Oireachtais) Foilseacháin Rialtais ar Díol Dlí AE (EUR-Lex) CCanna (Ceisteanna Coitianta) Séanadh Aiseolas Deasc chabhrach Cuardach TitleTeideal Year(s) or rangeBliain nó blianta nó raon TypeCineál All Legislation Acts Statutory Instruments Advanced SearchCuardach Casta HomeBaile ActsAchtanna 2008 Finance (No. 2) Act 2008 Finance (No. 2) Act 2008 Permanent Page URL View by SectionAmharc de réir Ailt View Full ActAmharc ar an Acht Iomlán Bill History Stair Bille Commencement, Amendments, SIs made under the Act Tosach Feidhme, Leasuithe, IRí arna ndéanamh faoin Acht Open PDFOscail PDF Print Full ActPriontáil an tAcht Iomlán Number 25 of 2008 FINANCE (NO. 2) ACT 2008 ARRANGEMENT OF SECTIONS

PART 1

Levies, Income Tax, Corporation Tax and Capital Gains Tax

Chapter 1

Interpretation Section

Section 1

Chapter 2

Levies

Section 2

Section 3

Chapter 3

Income Tax

Section 4

Section 5

Section 6

Section 7

Section 8

Section 9

Section 10

Section 11

Section 12

Section 13

Section 14

Section 15

Section 16

Chapter 4

Income Tax, Corporation Tax and Capital Gains Tax

Section 17

Section 18

Section 19

Section 20

Section 21

Section 22

Section 23

Section 24

Section 25

Section 26

Section 27

Section 28

Section 29

Section 30

Chapter 5

Corporation Tax

Section 31

Section 32

Section 33

Section 34

Section 35

Section 36

Section 37

Section 38

Section 39

Section 40

Chapter 6

Capital Gains Tax

Section 41

Section 42

Section 43

Section 44

Section 45

PART 2

Excise

Section 46

Section 47

Section 48

Section 49

Section 50

Section 51

Section 52

Section 53

Section 54

Section 55

Section 56

Section 57

Section 58

Section 59

Section 60

Section 61

Section 62

Section 63

Section 64

Section 65

Section 66

PART 3

Value-Added Tax

Section 67

Section 68

Section 69

Section 70

Section 71

Section 72

Section 73

Section 74

Section 75

Section 76

Section 77

PART 4

Stamp Duties

Section 78

Section 79

Section 80

Section 81

Section 82

Section 83

Section 84

Section 85

Section 86

Section 87

PART 5

Capital Acquisitions Tax

Section 88

Section 89

Section 90

PART 6

Miscellaneous

Section 91

Section 92

Section 93

Section 94

Section 95

Section 96

Section 97

Section 98

Section 99

Section 100

Section 101

Section 102

SCHEDULE 1 Repeals Relating to Excise Law SCHEDULE 2 Excise Licences SCHEDULE 3 Miscellaneous Amendments: Incentive to Pay and File Electronically SCHEDULE 4 Provisions Relating to Collection and Recovery of Tax SCHEDULE 5 Miscellaneous Amendments in Relation to Penalties SCHEDULE 6 Miscellaneous Technical Amendments in Relation to Tax Acts Referred to Air Navigation and Transport (Amendment) Act 1998 1998, No. 24 Bankruptcy Act 1988 1988, No. 27 Betting Act 1931 1931, No. 27 Capital Acquisitions Tax Consolidation Act 2003 2003, No. 1 Central Bank Act 1971 1971, No. 24 Companies Act 1963 1963, No. 33 Courts of Justice Act 1924 1924, No.10 Courts (Supplemental Provisions) Act 1961 1961, No. 39 Dublin Docklands Development Authority Act 1997 1997, No. 7 Electronic Commerce Act 2000 2000, No. 27 Enforcement of Court Orders Act 1926 1926, No. 18 Excise Act 1835 5&6 Wm.4, c.39 Finance (1909-10) Act 1910 10 Edw.7, c.8 Finance Act 1940 1940, No. 14 Finance Act 1947 1947, No. 15 Finance Act 1950 1950, No. 18 Finance Act 1976 1976, No. 16 Finance Act 1980 1980, No. 14 Finance Act 1983 1983, No. 15 Finance Act 1989 1989, No. 10 Finance Act 1992 1992, No. 9 Finance Act 1993 1993, No. 13 Finance Act 1995 1995, No. 8 Finance Act 1999 1999, No. 2 Finance Act 2000 2000, No. 3 Finance Act 2001 2001, No. 7 Finance Act 2002 2002, No. 5 Finance Act 2003 2003, No. 3 Finance Act 2005 2005, No. 5 Finance Act 2006 2006, No. 6 Finance Act 2007 2007, No. 11 Finance Act 2008 2008, No. 3 Fire Services Act 1981 1981, No. 30 Health Act 1970 1970, No. 1 Health Contributions Act 1979 1979, No. 4 Intoxicating Liquor Act 1943 1943, No. 7 Intoxicating Liquor Act 1946 1946, No. 33 Intoxicating Liquor Act 1962 1962, No. 21 Intoxicating Liquor Act 1988 1988, No. 16 Intoxicating Liquor Act 2003 2003, No. 31 Intoxicating Liquor (National Concert Hall) Act 1983 1983, No. 34 Irish Aviation Authority Act 1993 1993, No. 29 Irish Horseracing Industry Act 1994 1994, No. 18 Judgement Mortgage (Ireland) Act 1850 13&14 Vic. c.29 Judgement Mortgage (Ireland) Act 1858 21&22 Vic. c.105 Local Government Act 2001 2001, No. 37 Maternity Protection Act 1994 1994, No. 34 Maternity Protection (Amendment) Act 2004 2004, No. 28 National Cultural Institutions Act 1997 1997, No. 11 National Training Fund Act 2000 2000, No. 41 Pharmacy Act 2007 2007, No. 20 Pharmacy (Ireland) Act 1875 38&39 Vic. c. 57 Planning and Development Acts 2000 to 2006 Provisional Collection of Taxes Act 1927 1927, No. 7 Social Welfare Consolidation Act 2005 2005, No. 26 Stamp Duties Consolidation Act 1999 1999, No. 31 State Authorities (Public Private Partnership Arrangements) Act 2002

2002, No. 1 Taxes Consolidation Act 1997 1997, No. 39 Tourist Traffic Act 1952 1952, No. 15 Value-Added Tax Act 1972 1972, No. 22 Value-Added Tax Acts 1972 to 2008 Number 25 of 2008 FINANCE (NO. 2) ACT 2008 AN ACT TO PROVIDE FOR THE IMPOSITION, REPEAL, REMISSION, ALTERATION AND REGULATION OF TAXATION, OF STAMP DUTIES AND OF DUTIES RELATING TO EXCISE AND OTHERWISE TO MAKE FURTHER PROVISION IN CONNECTION WITH FINANCE INCLUDING THE REGULATION OF CUSTOMS. [24th December, 2008] BE IT ENACTED BY THE OIREACHTAS AS FOLLOWS:

PART 1

Levies, Income Tax, Corporation Tax and Capital Gains Tax

Chapter 1

Interpretation Interpretation (Part 1).

1.— In this Part “Principal Act” means the Taxes Consolidation Act 1997 .

Chapter 2

Levies Income levy.

2.— The Principal Act is amended— (a) by inserting the following after Part 18: “LEVIES PART 18A Income Levy Definitions (Part 18A).

531A.— (1) In this Part— ‘ aggregate income ’, in relation to an individual and a year of assessment, means the aggregate of the individual’s relevant emoluments and relevant income for the year of assessment; ‘ Collector-General ’ means the Collector-General appointed under section 851; ‘ employee ’ and ‘ employer ’ have the same meanings as in section 983; ‘ excluded emoluments ’ means emoluments which have been gifted to the Minister for Finance under section 483; ‘ income levy ’ has the meaning assigned to it by section 531B; ‘ income tax month ’ means a calendar month; ‘ PAYE Regulation s’ means the Income Tax (Employments) (Consolidated) Regulations 2001 ( S.I. No. 559 of 2001 ); ‘ relevant emoluments ’ and ‘relevant income’ shall be construed in accordance with paragraphs (a) and (b), respectively, of the Table to section 531B(1); ‘ similar type payments ’ means payments which are of a similar character to payments made under the Social Welfare Acts but which are made by— (a) the Health Service Executive, (b) the Department of Community, Rural and Gaeltacht Affairs, (c) the Department of Enterprise, Trade and Employment, (d) the Department of Education and Science, (e) the Department of Agriculture, Fisheries and Food, (f) An Foras Áiseanna Saothair, in respect of schemes mentioned in clauses (I), (II) and (III) of section 472A(1)(b)(i), or (g) any other state or territory; ‘ social welfare payments ’ means payments made under the Social Welfare Acts; ‘ year of assessment ’ means a year of assessment within the meaning of the Tax Acts.

Charge to income levy.

531B.— (1) With effect from 1 January 2009, there shall be charged, levied and paid, in accordance with the provisions of this Part, a tax to be known as ‘ income levy ’ in respect of the income specified in paragraphs (a) and (b) of the Table to this subsection.

TABLE (a) The income described in this paragraph, to be known as ‘ rel evant emoluments ’, is emoluments to which Chapter 4 of Part 42 applies or is applied, other than social welfare payments and similar type payments and excluded emoluments. (b) The income described in this paragraph, to be known as ‘relevant income’, is income from all sources, other than relevant emoluments, social welfare payments and similar type payments and excluded emoluments, as estimated in accordance with the Income Tax Acts and— (i) as if sections 140, 141, 142, 143, 195, 231, 232, 233, 234 and 664 were never enacted, (ii) without regard to any deduction— (I) in respect of double rent allowance under section 324(2), 333(2), 345(3) or 354(3), (II) under section 372AP, in computing the amount of a surplus or deficiency in respect of rent from any premises, (III) under section 372AU, in computing the amount of a surplus or deficiency in respect of rent from any premises, (IV) under section 847A, in respect of a relevant donation (within the meaning of that section), or (V) under section 848A, in respect of a relevant donation (within the meaning of that section), (iii) excluding gains, income or payments to which any of the following provisions apply: (I) Chapter 4 of Part 8; (II) Chapter 5 of Part 8; (III) Chapter 7 of Part 8; (IV) Chapter 5 of Part 26; (V) Chapter 6 of Part 26; (VI) Chapter 1A of Part 27; (VII) Chapter 4 of Part 27, and (iv) having regard to a deduction for any payment to which section 1025 applies, made by an individual pursuant to a maintenance arrangement (within the meaning of that section), relating to the marriage for the benefit of the other party to the marriage, unless section 1026 applies in respect of such payment.

Rate of charge.

531C.— For the year of assessment 2009, and for each subsequent year of assessment, an individual shall be charged to income levy on his or her aggregate income for the year of assessment at the rates specified in the Table to this section.

TABLE Part of aggregate income Rate of income levy The first €100,100 1% The next €150,020 2% The remainder 3% Deduction and payment of income levy on relevant emoluments.

531D.— (1) An employer shall be liable in the first instance to pay income levy due in respect of any payment of relevant emoluments.

Record keeping.

531E.— (1) An employer shall record the following particulars in respect of each employee to whom payment of relevant emoluments has been made in a year of assessment— (a) the amount of each payment of relevant emoluments, (b) the amount of income levy deducted from each such payment, (c) the total amount of income levy which the employer is liable to remit in respect of each such payment, and (d) the dates of commencement and cessation within the year of assessment of the employment of the individual, where applicable.

Power of inspection.

531F.— The provisions of section 903 and Regulation 32 of the PAYE Regulations, in relation to inspection of records, with any necessary modifications, shall apply to the particulars recorded pursuant to section 531E as they apply to the records specified in those provisions.

Estimation of income levy due for income tax months and for year.

531G.— Sections 989, 990 and 990A shall apply to income levy as they apply to income tax.

Assessment, collection, payment and recovery of income levy on relevant income.

531H.— (1) Income levy payable for a year of assessment in respect of relevant income shall be assessed, charged and paid in all respects as if it was an amount of income tax assessed and charged under the Income Tax Acts, but without regard to section 1017, and may be stated in one sum (in this section referred to as the ‘aggregated sum’) with the amount of income tax contained in any computation of, or assessment or assessments to, income tax made by or on the individual by whom the income levy is payable for the year of assessment.

Married couples.

531I.— Where an election has been made or is deemed to have been made under section 1018 and has effect for a year of assessment, income levy payable by one spouse shall be charged, collected and recovered as if it were income levy payable by the spouse assessable under section 1017.

False statements.

531J.— The provisions of section 1056 in relation to the making of returns, declarations or statements shall apply, with any necessary modifications, in relation to income levy.

Repayments.

531K.— (1) In any case of underpayment or overpayment of income levy to the Collector-General, payment of the amount not paid or repayment of the amount overpaid, as the case may be, shall be made to or by the Collector-General, as appropriate.

Restriction on deduction.

531L.— (1) Income levy paid in respect of a year of assessment is in addition to, and does not reduce, any liability which an individual may have in respect of income tax or other taxes under the Tax Acts.

Application of provisions relating to income tax.

531M.— (1) The provisions of Chapter 1 of Part 40, in relation to appeals, shall apply to income levy as they apply to income tax.

Care and management.

531N.— Income levy is under the care and management of the Revenue Commissioners and Part 37 shall apply to income levy as it applies to income tax.”, (b) in section 1002, in the definition of “the Acts”, by inserting the following after paragraph (iii): “(iiia) Part 18A,”, (c) in section 1006, in the definition of “the Acts”, by inserting the following after paragraph (a): “(aa) Part 18A,”, (d) in section 1006A, in the definition of “the Acts”, by inserting the following after paragraph (a): “(aa) Part 18A,”, (e) in section 1078, in the definition of “the Acts”, by inserting the following after paragraph (c): “(ca) Part 18A,”, and (f) in section 1079, in the definition of “the Acts”, by inserting the following after paragraph (c): “(ca) Part 18A,”.

Parking levy in urban areas.

3.— (1) The Principal Act is amended— (a) by inserting the following after Part 18A (inserted by section 2 ): “PART 18B Parking Levy in Urban Areas Interpretation (Part 18B).

531O.— In this Part— ‘ car ’ means a mechanically propelled road vehicle designed, constructed or adapted for the carriage of the driver or the driver and one or more other persons, other than— (a) a motor-cycle (within the meaning of section 121), (b) an official vehicle, (c) a van (within the meaning of section 121A) where an employee is required by the employer to use the van in the performance of the duties of his or her office or employment, or (d) a vehicle, other than a van, of a type not commonly used as a private vehicle and unsuitable to be so used; ‘ disabled person’s parking permit ’ means a permit granted in accordance with Article 43 of the Road Traffic (Traffic and Parking) Regulations 1997 ( S.I. No. 182 of 1997 ); ‘ emoluments ’ means emoluments to which Chapter 4 of Part 42 applies; ‘ employee ’ has the same meaning as it has for the purposes of the PAYE Regulations; ‘ employer ’ has the same meaning as it has for the purposes of the PAYE Regulations; ‘ entitlement to use a parking space ’ shall be construed in accordance with section 531Q; ‘ fire authority ’ has the same meaning as it has for the purposes of the Fire Services Act 1981 ; ‘ maternity leave ’ means the period of leave referred to in section 8 (as amended by section 2 of the Maternity Protection (Amendment) Act 2004 and by the Maternity Protection Act 1994 (Extension of Periods of Leave) Order 2006) of the Maternity Protection Act 1994; ‘ mechanically propelled road vehicle ’ includes a vehicle the means of propulsion of which is electrical or partly electrical and partly mechanical; ‘ Minister ’ means the Minister for Finance; ‘ net emoluments ’ means emoluments (less allowable contributions (within the meaning of Regulation 41 of the PAYE Regulations)) after the deduction, in accordance with— (a) the PAYE Regulations, of income tax, (b) the Social Welfare (Consolidated Contributions and Insurability) Regulations 1996 ( S.I. No. 312 of 1996 ), of a contribution within the meaning of those regulations, (c) the Health Contributions Regulations 1979 ( S.I. No. 107 of 1979 ), of a health contribution, and (d) Part 18A (as inserted by the Finance (No. 2) Act 2008), of income levy; ‘ official vehicle ’ means a vehicle which is owned or provided by the State or by a State authority where an employee of the State or of such an authority is required by the employer to use the vehicle in the performance of the duties of his or her office or employment; ‘ parking levy ’ means the tax, provided for in section 531T, on an entitlement to use a parking space in an urban area;

‘ parking space ’ means any area or part of an area on, at, or in which it is possible to park a vehicle and includes any part of a building, erection or structure (including a moveable structure); ‘ PAYE Regulations ’ means the Income Tax (Employments) (Consolidated) Regulations 2001 ( S.I. No. 559 of 2001 ); ‘ personal public service number ’ has the same meaning as in section 262 of the Social Welfare Consolidation Act 2005 ; ‘ public sector employee ’ means a person whose emoluments are paid, funded or partly funded directly or indirectly by the State; ‘ relevant local authority ’ means the city council (within the meaning of section 2 of the Local Government Act 2001 ) of Cork, Dublin, Galway, Limerick or Waterford; ‘ State authority ’ means the Garda Síochána, the Defence Forces, the Health Service Executive (in so far as it relates to the ambulance service), the Revenue Commissioners (in so far as it relates to the Customs service), a fire authority or such other body as may be prescribed by order of the Minister under section 531P(1); ‘ urban area ’ means an area or areas designated by order of the Minister under section 531P(1); ‘ year of assessment ’ means a calendar year.

Urban areas to which parking levy applies and making of orders by the Minister.

531P.— (1) The Minister may, following consultation with any other Minister of the Government as he or she considers appropriate in the circumstances, by order— (a) designate that an area or areas which is or are within the administrative area (within the meaning of section 2 of the Local Government Act 2001 ) of a relevant local authority shall be an urban area for the purposes of this Part, (b) prescribe that a body shall be a State authority for the purposes of this Part, and (c) provide for the date from which this Part shall have effect.

Entitlement to use a parking space.

531Q.— (1) An employee shall be regarded as having an entitlement to use a parking space for the purposes of this Part where any one or more of the following circumstances apply: (a) the employee holds or has been issued with an authorisation in the form of a badge, permit, sticker or any other form of authorisation to use a parking space or is otherwise given permission (including oral permission) to use a parking space; (b) the employee holds or has been issued with any form or means of access to a parking space; (c) the employee has been allocated a dedicated parking space; (d) the employee has been allocated a parking space on a shared basis or other similar arrangement; (e) the availability of a parking space to the employee is on the basis of a system commonly known as on a first-come — first-served basis.

Provision of parking space by employer.

531R.— For the purposes of this Part, a parking space shall be regarded as provided directly or indirectly by an employer for the use of an employee where— (a) the employer provides the parking space on, at or in any premises which is owned or occupied by the employer, (b) the parking space is provided on, at or in any premises which is owned or occupied by a person connected (within the meaning of section 10) with the employer, (c) the employer enters into an arrangement or agreement with an employee or any other person whereby a parking space is provided for the use of that employee or any other employee of the employer, or (d) in the case of a public sector employee to whom paragraph (a), (b) or (c) does not apply, the person who provides the parking space to that employee is funded or part funded directly or indirectly by the employer of that employee.

Exemption for certain persons.

531S.— The parking levy provided for under this Part shall not apply— (a) to an employee who is the holder of a valid disabled person’s parking permit, (b) to the use of a parking space by an employee of a State or civil emergency service where the use of that space relates solely to a response, required of the employee by the employer, to an emergency situation, or (c) to occasional use of a parking space by a retired person where that person’s former employer or, where section 531R(d) applies, the person who provided the parking space to the retired person before he or she retired, continues to make a parking space available to him or her.

Charge to parking levy.

531T.— Subject to section 531S, where— (a) an employee has an entitlement to use a parking space in an urban area for the parking of a car, and (b) such space is provided directly or indirectly by his or her employer, then a tax to be known as ‘parking levy’ shall be charged, levied and paid in accordance with this Part in relation to such entitlement.

Rate of charge to parking levy.

531U.— (1) Subject to the subsequent provisions of this section, the amount of the parking levy in relation to each employee— (a) shall be €200 in relation to each year of assessment, or (b) in relation to the year of assessment in which this Part takes effect, shall be €200 reduced to an amount which bears the same proportion to €200 as the period consisting of the part of that year in which this Part has effect bears to the full year of assessment.

Deduction of levy by employer.

531V.— (1) Where section 531T applies, an employer shall— (a) deduct the amount of the parking levy, determined in accordance with section 531U, from the employee’s net emoluments for the period during which he or she has an entitlement to use a parking space and such deduction shall be made at a time and frequency which corresponds with the payment of the employee’s emoluments, (b) be accountable for the amount of the parking levy deductible, and liable to pay that amount to the Revenue Commissioners as if it were an amount of income tax deductible in accordance with the PAYE Regulations, and (c) remit to the Collector-General the total of all amounts of parking levy which the employer was liable to deduct from employees and such remittance shall be made at the same time and in the same manner as the employer is required under Regulation 28 or, as the case may be, under Regulation 29 of the PAYE Regulations to remit amounts of tax which the employer was liable to deduct from emoluments paid to employees.

No relief for any payment in relation to parking levy.

531W.— Notwithstanding any provision of the Tax Acts, no sum shall— (a) in the case of an employee, be allowed to the employee in relation to a parking levy payable under this Part— (i) as a deduction under section 114, or (ii) as a credit against any liability arising under the Tax Acts, or (b) in the case of an employer— (i) be deducted in computing the amount of profits or gains chargeable to tax under Schedule D, or (ii) be included in computing any expenses of management in respect of which a deduction may be claimed under section 83 or 707, in relation to any amount which is paid by the employer to an employee in compensation for, or in re-imbursement of, the payment of a parking levy under this Part.

Records and regulations.

531X.— (1) Subject to subsection (2), where a parking space in an urban area to which this Part applies is provided directly or indirectly by an employer for the use of one or more employees for the parking of a car, the employer shall in respect of each year of assessment and the period referred to in section 531U(1)(b) keep in a permanent form a full and true record of the following: (a) details of the locations at which each such parking space is provided, (b) the name and personal public service number of each employee who has an entitlement to use a parking space, (c) where section 531Q(3) applies, the name and personal public service number of each employee who ceased to have an entitlement to use a parking space and the date from which the entitlement ceased, (d) where section 531S(a) applies, the name and personal public service number of each employee to which that section applies, and (e) such other records specified in regulations by the Revenue Commissioners as may reasonably be required by them for the purposes of this Part.

Payment, collection and recovery.

531Y.— (1) The parking levy provided for under this Part is placed under the care and management of the Revenue Commissioners and section 849 shall apply as if ‘parking levy’ were included in the definition of ‘tax’ in that section.

Penalties.

531Z.— (1) Where an employer fails to— (a) deduct or remit the parking levy in accordance with section 531V(1), (b) keep records in accordance with section 531X(1), or (c) include the details referred to in paragraphs (a) and (b) of section 531Y(4) on the form which is required to be sent to the Collector-General under Regulation 31 of the PAYE Regulations, that person shall be liable to a penalty of €3,000.

Chapter 3

Income Tax Amendment of section 15 (rate of charge) of Principal Act.

4.— As respects the year of assessment 2009 and subsequent years of assessment, section 15 of the Principal Act is amended— (a) by substituting “€27,400” for “€26,400” (inserted by the Finance Act 2008 ) in subsection (3), and (b) by substituting the following Table for the Table (as so inserted) to that section: “TABLE

PART 1

Part of taxable income Rate of tax Description of rate

(1)

(2)

PART 2

Part of taxable income Rate of tax Description of rate

(1)

(2)

PART 3

Part of taxable income Rate of tax Description of rate

(1)

(2)

Amendment of section 122 (preferential loan arrangements) of Principal Act.

5.— As respects the year of assessment 2009 and subsequent years of assessment, section 122 of the Principal Act is amended in the definition of the “ specified rate ” in subsection (1)(a)— (a) by substituting “5 per cent” for “5.5 per cent” (inserted by the Finance Act 2008 ) in both places where it occurs, and (b) by substituting “12.5 per cent” for “13 per cent” (inserted by the Finance Act 2008 ).

Benefit-in-kind: emission based calculations.

6.— (1) Section 121 of the Principal Act is amended— (a) in subsection (1) in the definition of “business mileage for a year of assessment” by substituting “whole kilometres” for “whole miles”, (b) in subsection (3)— (i) by deleting paragraph (c) for the year of assessment 2009 and subsequent years, (ii) by inserting the following after paragraph (c): “(d) This subsection is subject to subsection (4B) for years of assessment 2009 and subsequent years.”, (c) in subsection (4)— (i) in paragraph (a) by substituting “24,000 kilometres” for “15,000 miles”, (ii) in paragraph (c)(i)— (I) by substituting “24,000” for “15,000” in each place where it occurs, and (II) by substituting the following for the Table to that subsection— “TABLE Business mileage lower limit Business mileage upper limit Percentage of original market value

(1)

(2)

Original market value × A where— A is a percentage, based on vehicle categories and business mileage, determined in accordance with column (3), (4) or (5), as the case may be, of Table A to this subsection. (b) In Table A to this subsection, any percentage shown in column (3), (4) or (5), as the case may be, shall be the percentage applicable to any business mileage for a year of assessment which— (i) exceeds the lower limit (if any) shown in column (1), and (ii) does not exceed the upper limit (if any) shown in column (2), opposite the mention of that percentage in column (3), (4) or (5), as the case may be. (c) Any reference in this section to a vehicle in any of the vehicle Categories A to G as set out in the first column of Table B to this subsection is a reference to a vehicle whose CO 2 emissions, confirmed by reference to the relevant EC type approval certificate or EC certificate of conformity, are set out in the corresponding entry in the second column of Table B to this subsection.

TABLE A Business mileage Vehicle Categories Vehicle Categories Vehicle Categories lower limit upper limit A, B and C D and E F and G

(1)

(2)

(3)

(4)

(1)

Benefit-in-kind charge: relief for bicycles.

7.— (1) Chapter 3 of Part 5 of the Principal Act is amended— (a) in section 118 by inserting the following after subsection (5F): “(5G) (a) Subject to paragraph (c) of this subsection, subsection (1) shall not apply to expense of up to €1,000 incurred by the body corporate in, or in connection with, the provision for a director or employee of a bicycle or bicycle safety equipment, where— (i) the bicycle and bicycle safety equipment provided is unused and not second-hand, (ii) the director or employee uses the bicycle or bicycle safety equipment, or the bicycle and the bicycle safety equipment, as the case may be, mainly for qualifying journeys, and (iii) bicycles or bicycle safety equipment, or bicycles and bicycle safety equipment, as the case may be, are made available generally to directors and employees of the body corporate. (b) In this subsection— ‘ bicycle ’ means a pedal cycle; ‘ bicycle safety equipment ’ includes— (i) bicycle bells and bulb horns, (ii) bicycle helmets that conform to European product safety standard CEN/EN 1078, (iii) bicycle lights, including dynamo packs, (iv) bicycle reflectors and reflective clothing, and (v) such other safety equipment as the Revenue Commissioners may allow; ‘ normal place of work ’ means the place where the director or employee normally performs the duties of his or her office or employment; ‘ pedal cycle ’ means— (i) a bicycle or tricycle which is intended or adapted for propulsion solely by the physical exertions of a person or persons seated thereon, or (ii) a pedelec, but does not include a moped or a scooter; ‘ pedelec ’ means a bicycle or tricycle which is equipped with an auxiliary electric motor having a maximum continuous rated power of 0.25 kilowatts, of which output is progressively reduced and finally cut off as the vehicle reaches a speed of 25 kilometres per hour, or sooner if the cyclist stops pedalling; ‘ qualifying journey ’, in relation to a director or employee, means the whole or part of a journey— (i) between the director’s or employee’s home and normal place of work, or (ii) between the director’s or employee’s normal place of work and another place of work, where the director or employee is travelling in the performance of the duties of his or her office or employment. (c) A director or employee shall not, by virtue of this subsection, be relieved from a charge to income tax under subsection (1) more than once in any period of 5 consecutive years of assessment, commencing with the year of assessment in which the director or employee concerned is first provided with a bicycle or bicycle safety equipment.”,

(b) in section 118B— (i) in subsection (1) in the definition of “ salary sacrifice agreement ” by substituting “‘salary sacrifice arrangement’ ” for “salary sacrifice agreement”, (ii) in subsection (2)— (I) in paragraph (a)(i) by deleting “and” and in paragraph (a)(ii) by substituting “section 510(4), and” for “section 510(4),”, and (II) by inserting the following after paragraph (a)(ii): “(iii) a bicycle or bicycle safety equipment provided to a director or employee and which is exempt from a charge to tax by virtue of section 118(5G),”, and (iii) in subsection (5) by substituting “salary sacrifice arrangement” for “salary sacrifice agreement”.

Amendment of section 469 (relief for health expenses) of Principal Act.

8.— As respects the year of assessment 2009 and subsequent years of assessment, section 469 of the Principal Act is amended— (a) in subsection (1)— (i) by inserting the following definition before the definition of “ educational psychologist ”: “ ‘ appropriate percentage ’, in relation to a year of assessment, means a percentage equal to the standard rate of tax for that year;”, and (ii) by inserting the following definition before the definition of “ speech and language therapist ”: “ ‘ specified amount ’, in relation to a year of assessment, means the amount of expenditure which qualifies for income tax relief in accordance with this section;”, and (b) by substituting the following for subsection (2): “(2) Subject to this section, where an individual for a year of assessment proves that in the year of assessment he or she defrayed health expenses incurred for the provision of health care, the income tax to be charged on the individual, other than in accordance with section 16(2) for that year of assessment shall be reduced by the lesser of— (a) the amount equal to the appropriate percentage of the specified amount, and (b) the amount which reduces that income tax to nil, but, where an individual proves that he or she defrayed health expenses incurred for the provision of health care in the nature of maintenance or treatment in a nursing home, the individual shall be entitled for the purpose of ascertaining the amount of the income on which he or she is to be charged to income tax, to have a deduction made from his or her total income of the amount proved to have been so defrayed.”.

Employee share schemes: withdrawal of approval.

9.— (1) The Principal Act is amended— (a) in paragraph 5(1) of Schedule 11— (i) by deleting “or” where it occurs immediately before clause (d) and by substituting “paragraph 4, or” for “paragraph 4,” in clause (d), and (ii) by inserting the following after clause (d): “(e) where a person fails to provide information requested by the Revenue Commissioners under section 510(7) or information which is required to be delivered under section 510(8),”, and (b) in paragraph 3(1) of Schedule 12— (i) by deleting “or” in clause (a) and by inserting “or” at the end of clause (b), and (ii) by inserting the following after clause (b): “(c) where a person fails to provide information requested by the Revenue Commissioners under paragraph 3(4) or information which is required to be delivered under paragraph 3(5),”.

Amendment of section 128 (tax treatment of directors of companies and employees granted rights to acquire shares or other assets) of Principal Act.

10.— (1) Section 128 of the Principal Act is amended— (a) by substituting the following for subsection (6): “(6) (a) Subject to subsection (7), a person shall, in the case of a right granted by reason of the person’s office or employment, be chargeable to tax under this section in respect of a gain realised by another person— (i) if the right was granted to that other person, (ii) if the other person acquired the right otherwise than by or under an assignment made by means of a bargain at arm’s length, (iii) if the 2 persons are connected persons at the time when the gain is realised, or (iv) if the person benefits directly or indirectly from the exercise, assignment or release of the right by the other person; but in a case within subparagraphs (ii), (iii), or (iv), the gain realised shall be treated as reduced by the amount of any gain realised by a previous holder on an assignment of the right. (b) For the purposes of this subsection, a gain realised by another person shall include a gain realised on the exercise of a right by the person in respect of whose office or employment the right was granted, where that person exercises the right as nominee or bare trustee of the other person, or otherwise on behalf of the other person.”, (b) in subsection (7) by substituting “subparagraph (ii) or (iii) of subsection (6)(a)” for “subsection (6)(b)”, and (c) by substituting the following for subsection (8): “(8) (a) Where a right (referred to in this subsection as the ‘original right’) is assigned or released and the whole or part of the consideration for the assignment or release consists of or comprises another right (referred to in this subsection as the ‘new right’) the new right shall not be treated as consideration for the assignment or release; but this section shall apply in relation to the new right as it applies in relation to the original right and as if the consideration for its acquisition did not include the value of the original right but did include the amount or value of the consideration given for the grant of the original right in so far as that has not been offset by any valuable consideration for the assignment or release other than the consideration consisting of the new right. (b) The operation of paragraph (a) shall not prevent a charge arising under this section on a gain realised by the exercise of the original right.”.

Amendment of schedule 29 (provisions referred to in sections 1052, 1053 and 1054) to Principal Act.

11.— Schedule 29 to the Principal Act is amended in column 3— (a) by inserting the following before “section 238(3)”: “section 128C(15) section 128D(8) section128E(9)”, and (b) by inserting the following before “section 904”: “section 896A”.

Amendment of Chapter 5 (miscellaneous charging provisions) of Part 5 of Principal Act.

12.— (1) Chapter 5 of Part 5 of the Principal Act is amended by inserting the following after section 128C: “Tax treatment of directors of companies and employees who acquire restricted shares.

128D.— (1) In this section— ‘ director ’ and ‘ employee ’ have the meanings, respectively, given to them by section 770(1); ‘ employer ’ means the company in which the director or employee holds his or her office or employment; ‘ market value ’ shall be construed in accordance with section 548; ‘ restricted shares ’ shall be construed in accordance with subsection (3); ‘ shares ’ includes stock; ‘ specified period ’ has the same meaning as in subsection (3)(a).

Tax treatment of directors of companies and employees who acquire forfeitable shares.

128E.— (1) In this section— ‘ director ’ and ‘ employee ’ have the meanings, respectively, given to them by section 770(1); ‘ market value ’ shall be construed in accordance with section 548; ‘ forfeitable shares ’ shall be construed in accordance with subsection (3); ‘ shares ’ includes stock.

Repayment of tax where earnings not remitted.

13.— (1) The Principal Act is amended by inserting the following after section 825A: “825B.— (1) In this section— ‘ associated company ’, in relation to a relevant employer, means a company which is that employer’s associated company within the meaning of section 432 and which is incorporated or resident in a country or jurisdiction which is not a party to the EEA agreement, but with the government of which arrangements are for the time being in force by virtue of section 826(1); ‘ EEA agreement ’ means the Agreement on the European Economic Area signed at Oporto on 2 May 1992, as adjusted by the Protocol signed at Brussels on 17 March 1993; ‘ emoluments ’ has the same meaning as in Chapter 4 of Part 42; ‘ relevant emoluments ’, in relation to a tax year, means emoluments that are— (a) paid by a relevant employer or an associated company of that relevant employer to a relevant employee, and (b) within the charge to tax under Schedule E and to which Chapter 4 of Part 42 has been applied, for that tax year; ‘ relevant employee ’ means an individual who, for a tax year— (a) is resident in the State for tax purposes, and (b) is not domiciled in the State, and who, prior to becoming resident in the State for tax purposes— (i) was a resident of, and resident in, a country or jurisdiction that is not a party to the EEA Agreement but with the government of which arrangements are for the time being in force by virtue of section 826(1), (ii) was employed in that country or jurisdiction by the same relevant employer referred to in subsection (2) or by an associated company of that relevant employer, and (iii) had exercised the greater part of his or her employment in that country or jurisdiction; ‘ relevant employer ’ means a company that is incorporated, and is resident, in a country or jurisdiction that is not a party to the EEA Agreement but with the government of which arrangements are for the time being in force by virtue of section 826(1); ‘ Revenue officer ’ means an officer of the Revenue Commissioners; ‘ tax year ’ means a year of assessment.

Relief for interest paid on certain home loans.

14.— As respects the year of assessment 2009 and subsequent years of assessment, section 244 of the Principal Act is amended— (a) in subsection (2), by substituting the following for paragraph (a): “(a) In this subsection ‘appropriate percentage’, in relation to a year of assessment, means— (i) where relievable interest is determined by reference to paragraph (i) or (ii) of the definition of ‘relievable interest’, 15 per cent for that year, (ii) where relievable interest is determined by reference to paragraph (iii) or (iv) of the definition of ‘relievable interest’: (I) 25 per cent for the first and second years of assessment for which there is an entitlement to relief under this section, (II) 22.5 per cent for the third, fourth and fifth years of assessment for which there is an entitlement to relief under this section, and (III) a percentage equal to the standard rate of tax for the sixth and seventh years of assessment for which there is an entitlement to relief under this section.”, (b) in subsection (1)(c) and (3)(a) by substituting “paragraph” for “subparagraph” in each place where it occurs.

Amendment of section 819 (residence) of Principal Act.

15.— Section 819 of the Principal Act is amended by substituting the following for subsection (4): “(4) For the purposes of this section— (a) as respects the year of assessment 2008 and previous years of assessment, an individual shall be deemed to be present in the State for a day if the individual is present in the State at the end of the day, and (b) as respects the year of assessment 2009 and subsequent years of assessment, an individual shall be deemed to be present in the State for a day if the individual is present in the State at any time during that day.”.

Retirement benefits.

16.— (1) Part 30 of the Principal Act is amended— (a) in section 787O(1) by substituting the following for the definition of “B” in the formula in paragraph (b) of the definition of “ personal fund threshold ” and “ standard fund threshold ”: “B is— (i) the earnings adjustment factor which may be designated in writing by the Minister for Finance in December of the year of assessment preceding the relevant year, a note of which shall be published as soon as practicable in the Iris Oifigiúil, or (ii) where no earnings adjustment factor is designated by the Minister for Finance, 1;”, and (b) in section 790A— (i) by substituting the following for subsection (2): “(2) For a year of assessment (in this subsection referred to as the ‘relevant year’) after the year of assessment 2006 the earnings limit shall be an amount equivalent to the amount determined by the formula— A × B where— A is the earnings limit for the year of assessment immediately preceding the relevant year, and B is— (i) the earnings adjustment factor which may be designated in writing by the Minister for Finance in December of the year of assessment preceding the relevant year, a note of which shall be published as soon as practicable in the Iris Oifigiúil, or (ii) where no earnings adjustment factor is designated by the Minister for Finance, 1.”, and (ii) by inserting the following after subsection (2): “(3) Notwithstanding subsection (2), for the purposes of subsection (1) the earnings limit for the year of assessment 2009 shall be €150,000.”.

Chapter 4

Income Tax, Corporation Tax and Capital Gains Tax Amendment of section 659 (farming: allowances for capital expenditure on the construction of farm buildings, etc., for control of pollution) of Principal Act.

17.— Section 659 of the Principal Act is amended in subsection (1)(c) by substituting “1 January 2011” for “1 January 2009”.

Amendment of Chapter 2 (farming: relief for increase in stock values) of Part 23 of Principal Act.

18.— (1) Chapter 2 of Part 23 of the Principal Act is amended— (a) in section 666(4) by substituting “31 December 2010” for “31 December 2008” in paragraph (a) and “year 2010” for “year 2008” in paragraph (b), and (b) in section 667B(5)(b) by substituting “31 December 2010” for “31 December 2008”.

Amendment of section 279 (purchases of certain buildings or structures) of Principal Act.

19.— Section 279 of the Principal Act is amended, as respects a sale of the relevant interest in a building or structure which occurs on or after 14 October 2008— (a) in subsection (2) by substituting “2 years” for “one year” in both places where it occurs, and (b) in subsection (3) by substituting “2 years” for “one year” in each place where it occurs.

Capital allowances for qualifying specialist palliative care units.

20.— (1) Section 26(1) of the Finance Act 2008 is amended— (a) in paragraph (a)(iii) (which inserts subsection (2BA) into section 268 of the Principal Act) by substituting “8 in-patient beds” for “20 in-patient beds” in the said subsection (2BA), and (b) in paragraph (a)(iv) (which amends section 268(9) of the Principal Act) by substituting the following for clause (II): “(II) by inserting the following after paragraph (i): ‘(j) by reference to paragraph (m), as respects capital expenditure incurred on or after the date of the passing of the Finance Act 2008 .’,”.

Scheme to facilitate removal and relocation of certain industrial facilities.

21.— (1) The Principal Act is amended by inserting the following after Part 11C (inserted by the Finance Act 2008 ): “PART 11D Income Tax and Corporation Tax: Reliefs for the Removal and Relocation of Certain Industrial Facilities Interpretation (Part 11D).

380Q.— (1) In this Part— ‘ dangerous substance ’ has the meaning assigned to it by section 3 of the European Communities (Control of Major Accident Hazards Involving Dangerous Substances) Regulations 2000 ( S.I. No. 476 of 2000 ); ‘enhancement expenditure’, in relation to establishment land, means the amount of any capital expenditure wholly and exclusively incurred on the land for the purpose of enhancing the value of the land, being expenditure reflected in the state or nature of the land at the time of the disposal but does not include expenditure for which relief may be claimed under this Part; ‘ establishment ’, in relation to a person who carries on a relevant trade, means the whole area under that person’s control where dangerous substances are present in one or more installations, including common or related infrastructure or activities; ‘ establishment land ’, in relation to a relevant trade, means the area of land of the establishment of which the old installation is a unit; ‘ local authority ’ means— (a) in the case of a city, the city council, and (b) in the case of a county, the county council, being a city council or a county council, as the case may be, for the purposes of the Local Government Act 2001 ; ‘ installation ’ means a unit within an establishment in which dangerous substances are produced, used, handled or stored, and includes— (a) equipment, structures, pipework, machinery and tools, (b) docks and unloading quays serving the installation, and (c) jetties, warehouses or similar structures, whether floating or not, which are necessary for the operation of the installation; ‘ land ’ includes any interest in land and references to establishment land include references to any interest in that land; ‘market value’, in relation to the whole or part of establishment land, means the price that whole or part might reasonably be expected to fetch on a sale in the open market if the old installation was removed; ‘ new installation ’ means an installation which replaces an old installation; ‘ old installation ’ means an installation located in an urban dockland area which, by agreement with the relevant local authority, an operator relocates to facilitate the regeneration of that area; ‘ operator ’ means any person who in the course of a trade operates an establishment or installation; ‘ relocation expenditure ’ means relevant expenses incurred by a person who carries on a relevant trade in an establishment situated within an urban dockland area in relocating that trade to an establishment in a new location;

‘ relevant expenses ’ means capital expenditure, incurred in connection with the removal of an old installation and the set up of a replacement installation including the cost of acquiring such land as is necessary for the operation of the new installation but not including expenditure relating to— (a) any building or structure on that land other than a building or structure which is demolished in the course of the set-up, (b) the construction of any building or structure, or (c) machinery or plant; ‘ relevant trade ’ means a trade of operating an establishment or installation; ‘ urban dockland area ’ means a dockland area which is the subject of either a local area plan adopted by the relevant local authority under the Planning and Development Acts 2000 to 2006 or a planning scheme approved by the Minister for the Environment, Heritage and Local Government under section 25 of the Dublin Docklands Development Authority Act 1997 and comprises an area designated by that Minister, with the approval of the Minister for Finance, to be regenerated for the purposes set out in the local area plan or planning scheme.

Relocation allowance.

380R.— (1) A person carrying on a relevant trade, who incurs relocation expenditure in relation to that trade, may claim an allowance (in this section referred to as a ‘relocation allowance’) under this section in respect of that expenditure.

Additional allowance for relocation expenditure.

380S.— (1) Where a person carrying on a relevant trade incurs relocation expenditure in relation to which section 380R applies, there shall, in addition to any relocation allowance made in respect of such expenditure, be made to the person in taxing the trade for the chargeable period for which such relocation allowance is made, an additional relocation allowance (which shall be known as an ‘additional relocation allowance’) equal to 50 per cent of the expenditure and section 380R(2) shall apply to such additional relocation allowance as if it were an allowance under that subsection.

Allowance for machinery or plant.

380T.— (1) Where, for any chargeable period, expenditure incurred by a person on a new installation includes expenditure (in this section referred to as ‘qualifying expenditure’) on the provision of new machinery or new plant (other than vehicles suitable for the conveyance by road of persons or goods or the haulage by road of other vehicles) provided for use in the relevant trade, then the following provisions shall apply: (a) that person may claim that the wear and tear allowance to be made under section 284 to the person in respect of that expenditure is to be determined as if the reference to 12.5 per cent in section 284(2)(ad) were a reference to 100 per cent, and (b) there shall be made to the person for the chargeable period related to the expenditure an allowance equal to 50 per cent of the qualifying expenditure in relation to that plant or machinery, and such allowance shall be made in taxing the relevant trade.

Allowances in respect of certain buildings.

380U.— Where a person carrying on a relevant trade incurs expenditure (in this section referred to as ‘qualifying expenditure’) on a new installation which includes capital expenditure on the construction of a new building or structure which is to be an industrial building or structure to be occupied for the purposes of that trade, then the following provisions shall apply: (a) section 271 shall apply as if— (i) in subsection (1) of that section the definition of ‘industrial development agency’ were deleted, (ii) in subsection (2)(a)(i) of that section ‘to which subsection (3) applies’ were deleted, (iii) subsection (3) of that section were deleted, (iv) the following subsection were substituted for subsection (4) of that section: ‘(4) An industrial building allowance shall be of an amount equal to 100 per cent of the capital expenditure mentioned in subsection (2).’, and (v) in subsection (5) of that section ‘to which subsection (3)(c) applies’ were deleted, and (b) there shall be made to that person for the chargeable period related to the expenditure an allowance equal to 50 per cent of the qualifying expenditure in relation to that building or structure, and such allowance shall be made in taxing the relevant trade.

Improvement.

380V.— (1) A new installation is an improved installation where its capacity is greater or it has improved efficiency or productivity beyond normal modernisation or upgrading than the old installation which it replaced.

Supplementary provisions.

380W.— (1) Where an allowance under section 380T(1)(b) or 380U(1)(b) has been made to any person in respect of expenditure incurred on the provision of machinery or plant or on the construction of a building or structure and the machinery or plant or building or structure is sold by that person without the machinery or plant or building or structure having been used by that person for the purposes of a relevant trade or before the expiration of the period of 2 years from the day on which the machinery or plant or, as the case may be, the building or structure, began to be so used, then the allowance under those sections shall be withdrawn and all such additional assessments and adjustments of assessments shall be made as may be necessary for or in consequence of the withdrawal of the allowance.

Restrictions on relief — non-application of relief in certain cases.

380X.— Notwithstanding any other provision of this Part, no allowances under sections 380R, 380S, 380T and 380U shall be made in relation to expenditure— (a) where any part of such expenditure has been or is to be met, directly or indirectly, by grant assistance or any other assistance which is granted by or through the State, any board established by statute, any public or local authority or any other agency of the State, (b) unless the potential allowances in relation to that expenditure comply with— (i) the requirements of the Guidelines on National Regional Aid for 2007-2013 prepared by the Commission of the European Communities and issued on 4 March 2006 1 , (ii) the National Regional Aid Map for Ireland for the period 1 January 2007 to 31 December 2013 which was approved by the Commission of the European Communities on 24 October 2006 2 , and (iii) the requirements of the Community Guidelines on State Aid for Environmental Protection prepared by the Commission of the European Communities and issued on 1 April 2008 3 , (c) where the person who is entitled to the allowances in relation to that expenditure is subject to an outstanding recovery order following a previous decision of the Commission of the European Communities declaring aid in favour of that person to be illegal and incompatible with the common market, or (d) where the person who is entitled to the allowances is a person in difficulty under the Community Guidelines on State Aid for Rescuing and Restructuring Firms in Difficulty 4 .”.

Amendment of section 268 (meaning of “industrial building or structure”) of Principal Act.

22.— Section 268 of the Principal Act is amended— (a) in subsection (12)(c) by inserting “, or part thereof,” after “potential capital allowances involved”, and (b) by inserting the following after subsection (12): “(12A) (a) Where the National Tourism Development Authority gives a certificate in writing to the person who has incurred the capital expenditure on the construction or refurbishment of the building or structure stating that the approval referred to in subsection (12)(c) has been received, the building or structure shall, for the purposes of this Part, be treated as an industrial building or structure from the date on which it was first used for the purposes of the trade of hotel-keeping, and tax shall be discharged or repaid accordingly in giving effect to the allowances to be made under this Part. (b) Where the Commission of the European Communities has approved an amount— (i) which is lower than the amount of capital expenditure actually incurred on the construction or refurbishment of the building or structure, then, for the purposes of this Part, that lower amount shall be substituted for the amount actually incurred, or (ii) which is lower than the amount of the net price paid within the meaning of section 279, that section shall apply as if the reference to the net price paid in subsection (2)(b) were a reference to the lower amount so approved.”.

Amendment of section 81 (general rule as to deductions) of Principal Act.

23.— (1) Section 81 of the Principal Act is amended in subsection (2) by substituting “capital gains tax;” for “capital gains tax.” in paragraph (n), and by inserting the following after paragraph (n): “(o) any sum paid or payable under any agreement or understanding whereby a person is obliged to make a payment to a connected person resident in any territory outside the State for an adjustment made, or to be made, to the profits of the connected person for which relief may be afforded under the terms of an arrangement entered into by virtue of subsection (1) or (1B) of section 826, or for a similar adjustment made to the profits of a connected person resident in any other territory.”.

Amendment of section 81B (equalisation reserves for credit insurance and reinsurance business of companies) of Principal Act.

24.— (1) Section 81B of the Principal Act is amended— (a) in subsection (1) by inserting the following before the definition of “ Reinsurance Regulations ”: “ ‘ credit insurance risks ’ means risks included in class 14 of Section A of the Annex to the First Council Directive 73/239/EEC of 24 July 1973 1 ; ‘ Principal Regulations ’ means the European Communities (Non-Life Insurance) Regulations 1976 ( S.I. No. 115 of 1976 ) as amended from time to time;”, (b) by inserting the following after subsection (1): “(1A) This section applies to— (a) an insurance company whose business has at any time been, or included, business in respect of which it was required, by virtue of Regulation 24 of the Reinsurance Regulations, to establish and maintain an equalisation reserve, or (b) an insurance company which is underwriting credit insurance risks and which is required by Article 14(8) of the Principal Regulations to set up an equalisation reserve.”, (c) by substituting the following for subsection (2): “(2) Subject to the following provisions of this section, full account shall be taken of all amounts in accordance with the rules in subsection (3) in making any computation, for the purposes of Case I of Schedule D, of the profits or losses for any accounting period of an insurance company to which this section applies.”, (d) in subsection (3)(c) by inserting “or the Principal Regulations” after “the Reinsurance Regulations”, (e) in subsection (4)— (i) by inserting “or Article 14(8) of the Principal Regulations” after “Regulation 24 of the Reinsurance Regulations”, and (ii) in paragraph (b) by inserting “or the Principal Regulations” after “Reinsurance Regulations”, (f) in subsection (5) by inserting “or the Principal Regulations” after “Reinsurance Regulations” in both places where it occurs, and (g) in subsection (7) by inserting “or the Principal Regulations” after “Reinsurance Regulations”.

Amendment of section 198 (certain interest not to be chargeable) of Principal Act.

25.— (1) Section 198 of the Principal Act is amended in subsection (1)(c)— (a) in subparagraph (iii) by inserting “, an interest payment to which section 246A applies” after “to which section 64(2) applies” and by deleting “and” where it last occurs, (b) in subparagraph (iv), by substituting “assets of the qualifying company, and” for “assets of the qualifying company.”, and (c) by inserting the following after subparagraph (iv): “(v) a person shall not be chargeable to income tax in respect of discounts arising on securities issued by a relevant person (within the meaning of section 246) in the ordinary course of a trade or business carried on by that person if the first mentioned person is not a resident of the State and is regarded as being a resident of a relevant territory for the purposes of this subsection.”.

Amendment of Part 8 (annual payments, charges and interest) of Principal Act.

26.— (1) The Principal Act is amended— (a) in section 256(1) in the definition of “appropriate tax”— (i) in paragraph (a) by substituting “23 per cent” for “20 per cent”, (ii) by substituting the following for paragraph (b): “(b) subject to paragraph (c), in the case of interest paid in respect of any other relevant deposit, at a rate determined by the formula— (S + 3) per cent where S is the standard rate per cent (within the meaning of section 4(1)) in force at the time of payment, and”, and (iii) in paragraph (c), by substituting “(S + 6) per cent” for “(S + 3) per cent”, (b) in section 261(c)(i) by substituting the following for clause (II): “(II) where the taxable income of that person includes relevant interest which comes within paragraph (b) of the definition of ‘appropriate tax’ in section 256(1) of the Principal Act, the part of taxable income, equal to that relevant interest, shall be chargeable to tax at the rate at which tax was deducted from that relevant interest.”, (c) in section 261B by substituting the following for subsection (2): “(2) Notwithstanding section 15, where the taxable income of that person includes specified interest, the part of taxable income, equal to that specified interest, shall be chargeable to tax at the rate at which tax would have been deducted, from that interest, if a declaration under subsection (1A) or (1B) of section 256 had not been made.”, (d) in section 267B— (i) in subsection (2)(b) by substituting “23 per cent” for “20 per cent”, and (ii) in subsection (3)(b) by substituting “23 per cent” for “20 per cent”, and (e) in section 267M, by substituting the following for paragraph (a) of subsection (2): “(a) Notwithstanding section 15 and subject to paragraph (b), where the taxable income of that person includes specified interest, the part of taxable income, equal to that specified interest, shall be chargeable to tax at the rate specified in paragraph (b) of the definition of ‘appropriate tax’ in subsection 256(1).”,

Life assurance policies and investment funds.

27.— (1) The Principal Act is amended— (a) in section 730F(1)— (i) in paragraph (a) by substituting “(S + 6) per cent” for “(S + 3) per cent”, and (ii) in paragraph (b) by substituting “(S + 26) per cent” for “(S + 23) per cent”, (b) in Chapter 6 of Part 26— (i) in section 730J(a)— (I) by substituting the following for clause (I) of subparagraph (i): “(I) where the payment is a relevant payment, at the rate determined by the formula— (S + 3) per cent where S is the standard rate per cent for the year of assessment in which the payment is made, and”, (II) in subparagraph (i)(II)(A) by substituting “(S + 26) per cent” for “(S + 23) per cent”, (III) in subparagraph (i)(II)(B) by substituting “(S + 6) per cent” for “(S + 3) per cent”, and (IV) in subparagraph (ii)(I) by substituting “(H + 23) per cent” for “(H + 20) per cent”, and (ii) in section 730K(1)— (I) in paragraph (a) by substituting “(S + 26) per cent” for “(S + 23) per cent”, and (II) in paragraph (b) by substituting “(S + 6) per cent” for “(S + 3) per cent”, (c) in Chapter 1A of Part 27— (i) in the formula in section 739D(5A) by substituting“(S + 6)” for “(S + 3)”, (ii) in section 739E— (I) in subsection (1)— (A) by substituting the following for paragraph (a): “(a) subject to paragraph (ba), where the amount of the gain is provided by section 739D(2)(a), at a rate determined by the formula— (S + 3) per cent where S is the standard rate per cent for the year of assessment in which the gain arises,”, (B) in paragraph (b) by substituting “(S + 6) per cent” for “(S + 3) per cent,”, and (C) in paragraph (ba) by substituting “(S + 26) per cent” for “(S + 23) per cent,”, and (II) in subsection (1A) in the definition of “first tax” by substituting “section 739F or, as the case may be, in accordance with subsection (2A)(b)(iii) and section 739G(2A)” for “section 739F”, and (iii) in section 739G(2)(c) by substituting “at the rate determined in accordance with section 739E(1)(a),” for “at the standard rate,”, and (d) in Chapter 4 of Part 27— (i) in section 747D— (I) in paragraph (a)(i)(I)— (A) by substituting “(S + 26) per cent” for “(S + 23) per cent,” in subclause (A), and (B) by substituting the following for subclause (B): “(B) in any other case, at the rate determined by the formula— (S + 3) per cent where S is the standard rate per cent for the year of assessment in which the relevant payment is made,”, (II) in paragraph (a)(i)(II)(A) by substituting “(S + 26) per cent” for “(S + 23) per cent,”, (III) in paragraph (a)(i)(II)(B) by substituting “(S + 6) per cent” for “(S + 3) per cent,”, and

(IV) in paragraph (a)(ii)(I) by substituting “(H + 23) per cent” for “(H + 20) per cent,”, and (ii) in section 747E(1)— (I) in paragraph (b)(i) by substituting “(S + 26) per cent” for “(S + 23) per cent,”, and (II) in paragraph (b)(ii) by substituting “(S + 6) per cent” for “(S + 3) per cent,”.

Amendment of section 481 (relief for investment in films) of Principal Act.

28.— (1) The Principal Act is amended in section 481— (a) in subsection (1), in the definition of “relevant deduction”, by substituting “100 per cent” for “80 per cent”, and (b) in subsection (7) by substituting “€50,000” for “€31,750”.

Amendment of section 503 (claims) of Principal Act.

29.— (1) Section 503 of the Principal Act is amended by substituting the following for subsection (1): “(1) A claim for the relief in respect of eligible shares issued by a company in any year of assessment shall be made— (a) not earlier than— (i) in the case of a relevant investment, the date on which the company commences to carry on the relevant trading operations, and (ii) in any other case, the end of the period of 4 months mentioned in section 489(7)(a)(i)(II), and (b) not later than— (i) 2 years after the end of that year of assessment or, if that period of 4 months mentioned in section 489(7)(a)(i)(II) ended after the end of that year, 2 years after the end of that 4 month period, whichever last occurs, or (ii) 3 months after the date the statement referred to in subsection (3) is furnished, where such statement is furnished within the 3 months prior to the expiry of the time specified in subparagraph (i).”.

Amendment of section 768 (allowance for know-how) of Principal Act.

30.— (1) Section 768 of the Principal Act is amended— (a) by substituting the following for subsection (3): “(3) (a) Where a person acquires a trade or part of a trade and, together with the trade or the part of the trade, know-how used in the trade or part of the trade, then no amount shall be allowed to be deducted under this section in respect of expenditure incurred on the acquisition of the know-how. (b) Subject to paragraph (c), where— (i) a person acquires a trade or part of a trade, and (ii) a person connected (within the meaning of section 10) with the person acquires know-how used in the trade or the part of the trade, then—