Finance Act, 1987

Finance Act, 1987 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 1987 Finance Act, 1987 Finance Act, 1987 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 Print Full ActPriontáil an tAcht Iomlán Number 10 of 1987 FINANCE ACT, 1987 ARRANGEMENT OF SECTIONS

PART I

Income Tax and Corporation Tax

Chapter I

Income Tax Section

Section 1

Amendment of section 6 (special allowance in respect of P.R.S.I. for 1982-83) of Finance Act, 1982.

Section 2

Application of section 10 (exemption of certain income from leasing of farm land) of Finance Act, 1985.

Section 3

Application of section 16 (credit for farm tax) of Finance Act, 1986.

Section 4

Residence of persons working abroad.

Section 5

Amendment of section 14 (taxation treatment of certain dividends) of Finance Act, 1986.

Section 6

Amendment of provisions relating to relief in respect of interest.

Section 7

Alternative amount on account of appropriate tax.

Chapter II

Income Tax: Relief for Investment in Corporate Trades

Section 8

Amendment of section 12 (the relief) of Finance Act, 1984.

Section 9

Amendment of section 13 (limits on relief) of Finance Act, 1984.

Section 10

Amendment of section 15 (qualifying companies) of Finance Act, 1984.

Section 11

Amendment of section 16 (qualifying trades) of Finance Act, 1984.

Section 12

Amendment of provisions relating to subsidiaries.

Chapter III

Payments in respect of Professional Services by Certain Persons

Section 13

Interpretation (Chapter III).

Section 14

Accountable persons.

Section 15

Deduction of tax from relevant payments.

Section 16

Identification of, and issue of documents to, specified persons.

Section 17

Returns and collection of appropriate tax.

Section 18

Credit for appropriate tax borne.

Section 19

Interim refunds of appropriate tax.

Section 20

Apportionment of credits or interim refunds of appropriate tax.

Section 21

Limitation on credits or interim refunds of appropriate tax.

Chapter IV

Income Tax and Corporation Tax

Section 22

Farming: amendment of provisions relating to relief in respect of increase in stock values.

Section 23

Repeal of section 362 (relief on profits from business of sea or air transport) of Income Tax Act, 1967.

Section 24

Capital allowances for certain road vehicles.

Section 25

Application of section 52 (capital allowances: treatment of grants, etc.) of Finance Act, 1986, to food processing trade.

Section 26

Amendment of section 40 (capital allowances for certain leased assets) of Finance Act, 1984.

Section 27

Designated areas for urban renewal relief.

Chapter V

Corporation Tax

Section 28

Relief in relation to income from qualifying shipping trade.

Section 29

Relief in relation to income of Special Trading Houses.

Section 30

Relief in relation to income from certain trading operations carried on in Custom House Docks Area.

Section 31

Amendment of Chapter VI (manufacturing companies) of Part I of Finance Act, 1980.

Section 32

Companies: credit for farm tax.

Section 33

Application of section 79 (reduced rate of corporation tax for certain income) of Corporation Tax Act, 1976, to certain interest.

Section 34

Exemption from corporation tax of profits arising from the National Lottery.

Section 35

Relief for investment in films.

PART II

Customs and Excise

Section 36

Relief for certain hydrocarbon oil.

Section 37

Confirmation of Orders.

PART III

Value-Added Tax

Section 38

Interpretation (Part III).

Section 39

Amendment of section 1 (interpretation) of Principal Act.

Section 40

Amendment of section 11 (rates of tax) of Principal Act.

Section 41

Amendment of section 12 (deduction for tax borne or paid) of Principal Act.

Section 42

Amendment of section 12A (special provisions for tax invoiced by flat-rate farmers) of Principal Act.

Section 43

Amendment of section 13 (remission of tax on goods exported, etc.) of Principal Act.

Section 44

Amendment of section 32 (regulations) of Principal Act.

Section 45

Amendment of First Schedule to Principal Act.

Section 46

Amendment of Second Schedule to Principal Act.

Section 47

Amendment of Sixth Schedule to Principal Act.

PART IV

Stamp Duties

Section 48

Levy on banks.

Section 49

Amendment of section 92 (levy on certain premiums of insurance) of Finance Act, 1982.

PART V

Capital Acquisitions Tax

Section 50

Amendment of section 54 (provisions relating to charities, etc.) of Capital Acquisitions Tax Act, 1976.

PART VI

Miscellaneous

Section 51

Capital Services Redemption Account.

Section 52

Amendment of section 162 (Collector-General) of Income Tax Act, 1967.

Section 53

Amendment of section 21 (institution of proceedings for fines, etc.) of Inland Revenue Regulation Act, 1890.

Section 54

Care and management of taxes and duties.

Section 55

Short title, construction and commencement.

Acts Referred to Agriculture (An Chomhairle Oiliúna Talmhaíochta) Act, 1979 1979, No. 9 Agriculture (An Foras Talúntais) Act, 1958 1958, No. 1 Capital Acquisitions Tax Act, 1976 1976, No. 8 Central Bank Act, 1971 1971, No. 24 Corporation Tax Act, 1976 1976, No. 7 Export Promotion Act, 1959 1959, No. 20 Finance Act, 1950 1950, No. 18 Finance Act, 1970 1970, No. 14 Finance Act, 1975 1975, No. 6 Finance Act, 1976 1976, No. 16 Finance Act, 1979 1979, No. 11 Finance Act, 1980 1980, No. 14 Finance Act, 1981 1981, No. 16 Finance Act, 1982 1982, No. 14 Finance Act, 1984 1984, No. 9 Finance Act, 1985 1985, No. 10 Finance Act, 1986 1986, No. 13 Finance (Miscellaneous Provisions) Act, 1968 1968, No. 7 Harbours Act, 1946 1946, No. 9 Higher Education Authority Act, 1971 1971, No. 22 Income Tax Act, 1967 1967, No. 6 Industrial Development Act, 1950 1950, No. 29 Industrial Development (No. 2) Act, 1981 1981, No. 14 Industrial Development Act, 1986 1986, No. 9 Industrial Training Act, 1967 1967, No. 5 Inland Revenue Regulation Act, 1890 1890, c. 21 Insurance Act, 1936 1936, No. 45 Local Government Act, 1941 1941, No. 23 Local Government Services (Corporate Bodies) Act, 1971 1971, No. 6 Mercantile Marine Act, 1955 1955, No. 29 National Lottery Act, 1986 1986, No. 28 Road Traffic Act, 1961 1961, No. 24 Shannon Free Airport Development Company Limited Acts, 1959 to 1986 Social Welfare (Consolidation) Act, 1981 1981, No. 1 Stamp Act, 1891 1891, c. 39 Succession Duty Act, 1853 1853, c. 51 Tourist Traffic Act, 1939 1939, No. 24 Tourist Traffic Acts, 1939 to 1983 Údarás na Gaeltachta Act, 1979 1979, No. 5 Unit Trusts Act, 1972 1972, No. 17 Value-Added Tax Act, 1972 1972, No. 22 Value-Added Tax (Amendment) Act, 1978 1978, No. 34 Vocational Education Act, 1930 1930, No. 29 Number 10 of 1987 FINANCE ACT, 1987 AN ACT TO CHARGE AND IMPOSE CERTAIN DUTIES OF CUSTOMS AND INLAND REVENUE (INCLUDING EXCISE), TO AMEND THE LAW RELATING TO CUSTOMS AND INLAND REVENUE (INCLUDING EXCISE) AND TO MAKE FURTHER PROVISIONS IN CONNECTION WITH FINANCE. [9th July, 1987] BE IT ENACTED BY THE OIREACHTAS AS FOLLOWS:

PART I

Income Tax and Corporation Tax

Chapter I

Income Tax Amendment of section 6 (special allowance in respect of P.R.S.I. for 1982-83) of Finance Act, 1982.

1.—

Section 6

of the Finance Act, 1982 , shall have effect for the purpose of ascertaining the amount of income on which an individual referred to therein is to be charged to income tax for the year 1987-88, as if in subsection (2)— (a) “1987-88” were substituted for “1982-83”, and (b) “£286” were substituted for “£312”, in each place where it occurs.

Application of section 10 (exemption of certain income from leasing of farm land) of Finance Act, 1985.

2.—(1) In this section, “qualifying lease”, “qualifying lessor” and “the specified amount” have the meanings respectively assigned to them by section 10

Provided that, where the income of a qualifying lessor consists of, or includes, rent or rents from a qualifying lease or qualifying leases made within the said period and from a qualifying lease or qualifying leases made at any other time, the specified amount shall not exceed £2,800.

Application of section 16 (credit for farm tax) of Finance Act, 1986.

3.—

Section 16

of the Finance Act, 1986 , shall apply and have effect for the year of assessment 1986-87 as if references therein to farm tax paid or borne in that year of assessment were references to such tax paid or borne on or before the 30th day of June, 1987.

Residence of persons working abroad.

4.—(1) Where an individual, who is domiciled in the State, is engaged full-time in one or more of the following, that is to say, a trade, profession, office or employment, and the condition mentioned in subsection (2) is satisfied, the question whether he is resident in the State for tax purposes shall be decided without regard to any place of abode maintained in the State for his use.

Amendment of section 14 (taxation treatment of certain dividends) of Finance Act, 1986.

5.—

Section 14

of the Finance Act, 1986 , is hereby amended, as respects the year 1987-88 and any subsequent year of assessment— (a) by the insertion in subsection (1) after “A dividend” of “in respect of eligible shares”, (b) by the insertion after subsection (1) of the following subsection: “(1A) (a) In this section ‘eligible shares’, in relation to a company, means shares forming part of the ordinary share capital of the company which— (i) are fully paid up, (ii) carry no present or future preferential right to dividends or to the company's assets on its winding up and no present or future preferential right to be redeemed, and (iii) are not subject to any different treatment from the treatment which applies to all shares of the same class, in particular, different treatment in respect of— (I) the dividend payable, (II) repayment, (III) restrictions attaching to the shares, or (IV) any offer of substituted or additional shares, securities or rights of any description in respect of the shares. (b) Except where the shares are in a company whose ordinary share capital consists of shares of one class only, shares shall not be eligible shares for the purposes of this section unless, at the time of payment of the dividend in respect of the shares to which the claim under this section relates, the majority of the issued shares of the same class as those shares are held by persons other than— (i) persons who acquired their shares in pursuance of any benefit or right conferred on them or an opportunity afforded to them as a director or employee of the company concerned or any other company and not in pursuance of an offer to the public, and (ii) trustees holding shares on behalf of persons who acquired their beneficial interest in the shares in pursuance of such a benefit, right or opportunity as is mentioned in subparagraph (i). (c) In this subsection, ‘ordinary share capital’ has the meaning assigned to it by section 155

Chapter VI

of

Part I

of the Finance Act, 1980 , and (II) which has established a profit sharing scheme which has been approved of, and continues to be so approved of, by the Revenue Commissioners in accordance with

Part I

of the Third Schedule to the Finance Act, 1982 , £9,000, and (ii) in the case of qualifying dividends paid by any other company, £7,000:

Provided further that the total amount by which the income of an individual which is represented by qualifying dividends is to be reduced under this section for any year of assessment shall not exceed £9,000.”, and (d) by the insertion after subsection (2) of the following subsection: “(2A) For the purposes of subsection (2), a trade, which consists partly of the manufacture of goods within the meaning of

Chapter VI

of

Part I

of the Finance Act, 1980 , and partly of other trading operations, shall be regarded as consisting wholly or mainly of the manufacture of goods within the said meaning if, but only if, the total amount receivable by the company carrying on the trade from the sale of such goods is not less than 75 per cent. of the total amount receivable by the company from all sales made in the course of the trade.”, and the said subsection (1), as so amended, is set out in the Table to this section.

TABLE

Amendment of provisions relating to relief in respect of interest.

6.—(1) In relation to any interest paid in respect of any period beginning on or after the 6th day of April, 1987, relief shall not be given under sections 76 (1) (c) and 496 of, and paragraph 1 (2) of Part III of Schedule 6 to, the Income Tax Act, 1967 , in respect of the excess of the amount, or of the aggregate amount, of the interest over 90 per cent. of the amount, or of the aggregate amount, of the interest in respect of which, apart from this section, relief would otherwise have been given under those provisions.

Alternative amount on account of appropriate tax.

7.—(1) For the purposes of this section— (a) interest shall be treated, if not otherwise so treated, as accruing from day to day, (b) references to “general crediting date”, as respects a relevant deposit taker, shall be construed as references to a date on which the relevant deposit taker credits to all, or to the majority, of relevant deposits held by it on that date interest accrued due on those deposits (whether or not the interest is added to the balances on the relevant deposits on that date for the purpose of calculating interest due at some future date), and (c) references to the “principal section” shall be construed as references to section 33 of the Finance Act, 1986 .

Provided that, where the amount on account of appropriate tax paid by a relevant deposit taker for a year of assessment under this subsection exceeds the amount of appropriate tax due and payable by it for that year of assessment under the said subsection (3), the excess shall be carried forward and shall be set off against any amount due and payable under this subsection or the said subsection (3) by the relevant deposit taker for any subsequent year of assessment (any such set-off being effected as far as may be against an amount so due and payable at an earlier date rather than at a later date).

TABLE A − (B − C) where A is the amount of appropriate tax which would be due and payable by the relevant deposit taker for the year of assessment (hereafter in this Table referred to as the “relevant year”) in accordance with subsection (3) of the principal section if the total amount of the relevant interest whichhad accrued in the period of twelve months ending on the 5th day of October in the relevant year on all relevant deposits held by the relevant deposit taker in that period (and no more) had been paid by it in the relevant year, B is the amount of appropriate tax which was due and payable by the relevant deposit taker for the year of assessment immediately preceding the relevant year in accordance with the said subsection (3), and C is an amount equal to the lesser of the amount at B and the amount treated, in accordance with the provisions of this subsection or in accordance with the provisions of subsection (4) of the principal section, as paid by the relevant deposit taker on account of the appropriate tax due and payable by it for the year of assessment immediately preceding the relevant year.

Chapter IV

of

Part I

of the Finance Act, 1986 , and any tax payable in accordance with this section shall be deemed to be payable in accordance with that Chapter.

Chapter II

Income Tax: Relief for Investment in Corporate Trades Amendment of section 12 (the relief) of Finance Act, 1984.

8.—

Section 12

of the Finance Act, 1984 , is hereby amended— (a) by the addition to paragraph (c) of subsection (1) of the following proviso: “Provided that, where the money raised was used, is being used, or is intended to be used, by the company for the purpose of purchasing a ship for use by it in the course of a qualifying shipping trade carried on by it, the aforementioned evidence shall include a certificate by the Minister for the Marine certifying that the purchase of the ship was, is or would be eligible to be grant-aided under a statutory scheme of assistance for the purchase of ships administered by the Department of the Marine.”, and (b) by the addition to subsection (3), with effect as on and from the 6th day of April, 1987, of the following proviso: “Provided that where— (a) in accordance with the provisions of section 27, relief is due in respect of an amount subscribed as nominee for a qualifying individual by the managers of a designated fund, and (b) the eligible shares in respect of which the amount is subscribed are issued in the year of assessment next following the year of assessment in which that amount was subscribed to the designated fund, the individual may elect, by notice in writing to the inspector, to have the relief due given as a deduction from his total income for the year of assessment in which the amount was subscribed to the designated fund instead of as a deduction from his total income for the year of assessment in which the shares are issued.”.

Amendment of section 13 (limits on relief) of Finance Act, 1984.

9.—

Section 13

of the Finance Act, 1984 , is hereby amended, with effect as on and from the 6th day of April, 1984, by the insertion after subsection (2) of the following subsections: “(2A) If, in any year of assessment, a greater amount of relief would be given to an individual in respect of the amount or the total amount subscribed by him for eligible shares (in this subsection referred to as ‘the relevant subscription’) issued to him in that year or, where the proviso (inserted by the Finance Act, 1987) to section 12 (3) applies, in the next following year of assessment but for either or both of the following reasons, that is— (a) an insufficiency of total income, or (b) the operation of subsection (2), the amount of the relief which would be given but for those reasons less the amount, or the aggregate amount, of any relief in respect of the relevant subscription which is given in that year of assessment, shall be carried forward to the next following year of assessment, and shall be treated for the purposes of the relief as an amount subscribed directly by the individual for eligible shares issued to him in that following year:

Provided that this subsection shall not apply or have effect for any year of assessment subsequent to the year 1990-91. (2B) If, and so far as, an amount once carried forward under subsection (2A) (and treated as an amount subscribed directly by an individual for eligible shares issued to him in the said following year of assessment) is not deducted from his total income for that year of assessment, it shall be carried forward again to the next following year of assessment (and treated as an amount subscribed directly by him for eligible shares issued to him in that next following year), and so on for succeeding years of assessment:

Provided that this subsection shall not apply or have effect for any year of assessment subsequent to the year 1990-91. (2C) Relief shall be given to an individual for any year of assessment in the following order— (a) firstly, in respect of an amount carried forward from an earlier year of assessment in accordance with the provisions of subsection (2A) or (2B), and, in respect of such an amount so carried forward, for an earlier year of assessment in priority to a later year of assessment, and (b) then, and only then, in respect of any other amount for which relief is to be given in that year of assessment.”.

Amendment of section 15 (qualifying companies) of Finance Act, 1984.

10.—

Section 15

of the Finance Act, 1984 , is hereby amended— (a) by the insertion after subsection (3) of the following subsection: “(3A) (a) A company, whose trade includes one or more tourist traffic undertakings within the meaning of section 16 (2A) (inserted by the Finance Act, 1987), shall not be a qualifyingcompany unless and until it has shown to the satisfaction of the Revenue Commissioners that it has submitted to, and has had approved of by, Bord Fáilte Éireann (hereafter in this Chapter referred to as ‘the Bord’) a three-year development and marketing plan in respect of that undertaking, or those undertakings, as the case may be, which plan is primarily designed and formulated to increase tourist traffic, and revenue, from outside the State. (b) In considering whether to approve of such a plan, the Bord shall have regard only to such guidelines in relation to such approval as may, from time to time, be agreed, with the consent of the Minister for Finance, between it and the Minister for Tourism and Transport, and those guidelines may, without prejudice to the generality of the foregoing, set out— (i) the extent to which the company's interests in land and buildings may form part of its total assets, (ii) specific requirements which have to be met in order to comply with the objective mentioned in paragraph (a), and (iii) the extent to which the money raised through the issue of eligible shares should be used in promoting outside the State the undertaking or undertakings, as the case may be.”, and (b) by the insertion after subsection (12) of the following new subsection: “(13) Notwithstanding any of the foregoing provisions of this section, a company shall not be a qualifying company if, during the relevant period— (a) the company would not be a qualifying company but for the provisions of subsection (1A) (inserted by the Finance Act, 1987) of section 26, and (b) the company or any of its subsidiaries— (i) subscribes for new or existing share capital in, or (ii) makes loans to, a subsidiary which is a qualifying subsidiary by virtue of the said subsection (1A).”.

Amendment of section 16 (qualifying trades) of Finance Act, 1984.

11.—

Section 16

of the Finance Act, 1984 , is hereby amended— (a) by the substitution in subsection (2) for paragraph (a) of the following paragraph: “(a) consist wholly or mainly of one or more of thefollowing trading operations (in this Chapter referred to as ‘qualifying trading operations’)— (i) the manufacture of goods within the meaning of

Chapter VI

of

Part I

of the Finance Act, 1980 :

Provided that trading operations or activities included in the definition of, or regarded as the manufacture within the State of, goods for the purposes of the said Chapter VI by any enactment enacted after the passing of this Act, shall not, subject to the following provisions of this paragraph, be regarded as qualifying trading operations for the purposes of this Chapter, (ii) the rendering of services (other than relevant trading operations within the meaning of section 39B (inserted by the Finance Act, 1987) of the Finance Act, 1980 ) in the course of a service undertaking in respect of which an employment grant was made by the Industrial Development Authority under section 2 of the Industrial Development (No. 2) Act, 1981 , (iii) in respect of a subscription for eligible shares made on or after the 1st day of January, 1987, the carrying on of qualifying shipping activities within the meaning of section 28

Amendment of provisions relating to subsidiaries.

12.—(1)

Section 26

of the Finance Act, 1984 , is hereby amended by the insertion, after subsection (1), of the following subsection: “(1A) (a) Notwithstanding the provisions of subsection (1), a qualifying company whose trade consists wholly or mainly of the carrying on of qualifying shipping activities within the meaning of section 28

Chapter III

Payments in respect of Professional Services by Certain Persons Interpretation (Chapter III).

13.—(1) In this Chapter— “accountable person” has the meaning assigned to it by section 14 ; “appropriate tax”, in relation to a relevant payment, means— (a) where such payment does not include value-added tax, a sum representing income tax on the amount of that payment at the standard rate in force at the time of payment, and (b) where such payment includes value-added tax, a sum representing income tax at the standard rate in force at the time of payment on the amount of that payment exclusive of the value-added tax; “basis period for a year of assessment”, in relation to a specified person, means— (a) where a relevant payment is to be included in a computation of profits or gains of the said person for the purposes of Case I or II of Schedule D, the period on the profits or gains of which income tax for that year falls to be finally computed for the purposes of the said Case I or II:

Provided that— (i) where two basis periods overlap, the period common to both shall be deemed, for the purposes of this Chapter, to fall in the second basis period only, (ii) where there is an interval between the end of the basis period for one year of assessment and the basis period for the next year of assessment, then, the interval shall be deemed to be part of the second basis period, (iii) the reference in subparagraph (i) to the overlapping of two periods shall be construed as including a reference to the coincidence of two periods or to the inclusion of one period in another, and the reference to the period common to both shall be construed accordingly, and (b) in any other case, the year of assessment; “income tax month” means a month beginning on the 6th day of any of the months of April to March in any year; “professional services” includes— (a) services of a medical, dental, pharmaceutical, optical, aural or veterinary nature, (b) services of an architectural, engineering, quantity surveying or surveying nature, and related services, (c) services of accountancy, auditing or finance and services of financial, economic, marketing, advertising or other consultancies, (d) services of a solicitor or barrister and other legal services, (e) geological services, and (f) training services provided on behalf of An Chomhairle Oiliúna; “relevant payment” means a payment made on or after the 6th dayof June, 1987, in respect of professional services whether or not such services are provided to the accountable person making the payment, but excludes— (a) emoluments within the scope of

Chapter IV

of

Part V

of the Income Tax Act, 1967 , to which that Chapter applies, and (b) payments under a construction contract within the meaning of section 17 of the Finance Act, 1970 , from which tax has been deducted in accordance with the provisions of subsection (2) of that section, or would have been so deducted but for the provisions of subsection (8) of that section; “specified person” means, in relation to a relevant payment, the person to whom that payment is made; “tax” means income tax or corporation tax, as the context may require.

Accountable persons.

14.—(1) In this Chapter, “accountable person” means— (a) a Minister of the Government, (b) a local authority within the meaning of section 2

Deduction of tax from relevant payments.

15.—(1) An accountable person making a relevant payment shall deduct out of the amount of the payment the appropriate tax in relation to the payment. The specified person to whom such payment is made shall allow such deduction upon receipt of the residue of the payment, and the accountable person making such deduction shall be acquitted and discharged of so much money as is represented by the deduction, as if that sum had actually been paid.

Identification of, and issue of documents to, specified persons.

16.—(1) The specified person shall furnish to the accountable person concerned— (a) in the case of a specified person resident in the State or a person having a permanent establishment or fixed base in the State— (i) details of his income tax or corporation tax number, as may be appropriate, and (ii) if the relevant payment includes an amount in respect of value-added tax, his value-added tax registration number, and (b) in the case of a specified person, other than a person mentioned in paragraph (a), details of his country of residence and his tax reference in that country.

Returns and collection of appropriate tax.

17.—(1) Within ten days from the end of every income tax month, the accountable person shall remit to the Collector all amounts of appropriate tax which he is liable under this Chapter to deduct from relevant payments made by him during that income tax month.

Credit for appropriate tax borne.

18.—(1) Where, in relation to an accounting period, a specified person is within the charge to corporation tax and has borne appropriate tax referable to that accounting period he may, subject to the provisions of section 21 , claim to have the amount of appropriate taxspecified in subsection (4) set against corporation tax chargeable for that accounting period and, where such appropriate tax exceeds such corporation tax, to have the excess refunded to him.

Interim refunds of appropriate tax.

19.—(1) A specified person may make a claim for an interim refund of the whole or part of the appropriate tax referable to an accounting period or to a basis period for a year of assessment, as the case may be (in this section referred to as “the first-mentioned period”), and the inspector shall, if he is satisfied that the specified person making the claim has complied with the requirements of subsection (2), make such refund as is specified in subsection (3) and, subject to the said requirements as modified in subsection (4) (a), make such refund as is specified in that subsection.

Chapter IV

of

Part V

of the Income Tax Act, 1967 , and the Regulations made thereunder, and (c) in respect of employment contributions under the Social Welfare (Consolidation) Act, 1981 , and the Regulations made thereunder.

E × A ___ B × C ___ P where— A is the estimated total amount of the relevant payments to be taken into account as income in computing for tax purposes the profits or gains of the first-mentioned period, B is the estimated total sum of all amounts to be so taken into account as income in computing the said profits or gains, C is the estimated number of months or fractions of months comprised in the period in respect of which the claim to the refund is made, E is the estimated amount to be laid out or expended wholly and exclusively by the specified person in the first-mentioned period for the purposes of the trade or profession, and P is the estimated number of months or fractions of months comprised in the first-mentioned period, and the inspector shall make the estimates referred to in this formula to the best of his knowledge and belief and in accordance with the information available to him, and (ii) the amount of appropriate tax deducted from the relevant payments in respect of which forms have been submitted in accordance with the provisions of subsection (2) (b) after deducting therefrom any amount of such tax already refunded for the period in respect of which the claim to a refund is made. (c) The inspector shall refund an amount of appropriate tax equal to the lesser of the amounts determined at subparagraphs (i) and (ii) of paragraph (b).

Apportionment of credits or interim refunds of appropriate tax.

20.—Where the form referred to in either section 18

Limitation on credits or interim refunds of appropriate tax.

21.—No amount of appropriate tax shall be set off or refunded more than once under the provisions of this Chapter and any amount of appropriate tax refunded in accordance with the provisions of section 19 shall not be available for set-off under the provisions of section 18 .

Chapter IV

Income Tax and Corporation Tax Farming: amendment of provisions relating to relief in respect of increase in stock values.

22.—(1) Section 31A (inserted by the Finance Act, 1976 ) of the Finance Act, 1975 , is hereby amended by the substitution of “1987” for “1986” (inserted by the Finance Act, 1986 )— (a) in paragraph (iv) (inserted by the Finance Act, 1979 ) of the proviso to subsection (4) (a), and (b) in each place where it occurs in subsections (7) and (9) (inserted by the Finance Act, 1984 ), and the said paragraph (iv), the said subsection (7) (apart from the proviso) and the said subsection (9) (apart from the proviso), as so amended, are set out in the Table to this subsection.

TABLE (iv) a deduction shall not be allowed under the provisions of this section in computing a company's trading income for any accounting period which ends on or after the 6th day of April, 1987.

(2)

Section 12

of the Finance Act, 1976 , is hereby amended— (a) by the substitution in subsection (3) of “1987-88” for “1986-87” (inserted by the Finance Act, 1986 ), and (b) by the substitution of “1987” for “1986” (inserted by the Finance Act, 1986 ) in each place where it occurs in subsections (5) and (6) (inserted by the Finance Act, 1984 ), and the said subsection (3), the said subsection (5) (apart from the proviso) and the said subsection (6) (apart from the proviso), as so amended, are set out in the Table to this subsection.

TABLE

Repeal of section 362 (relief on profits from business of sea or air transport) of Income Tax Act, 1967.

23.—(1)

Section 362

of the Income Tax Act, 1967 , is hereby repealed.

Capital allowances for certain road vehicles.

24.—(1) (a) In this section— “car” means any mechanically propelled road vehiclebeing a vehicle which has been constructed or adapted to be primarily suited to the carriage of passengers and not to the conveyance of goods or burden of any description or to the haulage by road of other vehicles, and which is a vehicle of a type commonly used as a private vehicle and suitable to be so used, and includes a vehicle in use for the purpose referred to in paragraph (ii) of the definition of “qualifying purposes”; “chargeable period” and “chargeable period or its basis period” haver, respectively, the meanings assigned to them by paragraph 1 (2) of the First Schedule to the Corporation Tax Act, 1976 ; “qualifying purposes” means the use, in the ordinary course of trade, of a car for the purposes of— (i) short-term hire to members of the public, or (ii) the carriage of members of the public while the car is a licensed public hire vehicle fitted with a taximeter in pursuance of the Road Traffic (Public Service Vehicles) Regulations, 1963 (S.I. No. 191 of 1963); “short-term hire” means, in relation to a car, the hire of the car to a person under a hire-drive agreement (within the meaning of section 3 of the Road Traffic Act, 1961 ) for a continuous period which does not exceed eight weeks:

Provided that, where a period of hire of a car to a person by another person is followed within seven days of the end of that period by a further period of hire of a car (whether the same car or not) to that person by that other person, the two periods shall be deemed for the purposes of this section, including any subsequent application of this proviso, to constitute together a single continuous period of hire, so that where that continuous period of hire exceeds eight weeks, the period of hire of any car included in that continuous period of hire shall not be treated as a period of short-term hire, and, for the purposes of this proviso, any reference to a person shall be treated as including a reference to any other person who would be regarded as connected with that person under section 16 of the Finance (Miscellaneous Provisions) Act, 1968 ; “tax” means income tax or corporation tax, as the case may be. (b) For the purposes of this section, a car shall be regarded as used by a person for qualifying purposes as respects a chargeable period if, and only if, not less than 75 per cent. of its use (determined by reference to the periods of time in which the car is used, or available for use, for any purpose) by that person in the chargeable period or its basis period is for qualifying purposes:

Provided that, where as respects a chargeable period the use of a car for qualifying purposes doesnot satisfy the requirements of this paragraph but would have satisfied those requirements if the reference to “75 per cent.” were a reference to “50 per cent.”, the car shall be deemed to be used for qualifying purposes as respects that chargeable period if the use of the car by that person for qualifying purposes satisfied the requirements of this paragraph as respects the immediately preceding chargeable period, or the car shall be deemed to be so used if the said use of the car has satisfied those requirements as respects the immediately succeeding chargeable period and the inspector shall accordingly adjust the amount of capital allowances falling to be made in taxing the person's trade and any amount of tax overpaid shall be repaid.

Application of section 52 (capital allowances: treatment of grants, etc.) of Finance Act, 1986, to food processing trade.

25.—(1) For the purposes of this section— “food processing trade” means a trade which consists of, or includes, the manufacture of processed food; “processed food” means goods, manufactured within the State in the course of a trade by a company, which— (a) are intended for human consumption as a food, and (b) have been manufactured by a process involving the use of machinery or plant whereby the goods which are produced by the application of that process differ substantially in form and value from the materials to which the process has been applied and, without prejudice to the generality of the foregoing, the process does not consist primarily of— (i) the acceleration, retardation, alteration or application of a natural process, or (ii) the application of methods of preservation, pasteurisation or any similar treatment; “qualifying machinery or plant” means machinery or plant used solely in the course of a process of manufacture whereby processed food is produced.

Provided that the reference in this subsection to expenditure incurred by a company shall not include any expenditure which it is deemed to have incurred in accordance with the provisions of section 241 (2) or section 252 of the said Act.

Amendment of section 40 (capital allowances for certain leased assets) of Finance Act, 1984.

26.—

Section 40

of the Finance Act, 1984 , is hereby amended by the substitution in paragraph (a) of subsection (10) (inserted by the Finance Act, 1986 ) of “lessee” for “borrower”, and the said paragraph, as so amended, is set out in the Table to this section.

TABLE (a) the manufacture of goods (including activities which would, if the lessee were to make a claim for relief in respect of the trade under

Chapter VI

of

Part I

of the Finance Act, 1980 , fall to be regarded for the purposes of that Chapter as the manufacture of goods), or Designated areas for urban renewal relief.

27.—(1) For the purposes of

Chapter V

of

Part I

of the Finance Act, 1986 , the Minister for Finance, after consultation with the Minister for the Environment, may, by order, direct that— (a) (i) the definition of “designated area” contained in section 41 of that Act shall include such area or areas described in the order which, but for the order, would not be included in that definition, (ii) as respects any such area so described in the order, the definition of “qualifying period” in section 42, 44 or 45 of the said Act shall be construed as a reference to such period as shall be specified in the order in relation to that area: provided that no such period specified in the order shall commence prior to the date of the passing of this Act, or end after the 31st day of May, 1991, and (b) the definition of “the Custom House Docks Area” contained in the said section 41 shall, with effect from the date of such order, include such area or areas described in the order which, but for the order, would not be included in that definition, and where the Minister for Finance so orders, the said definition of “designated area” or “the Custom House Docks Area”, as the case may be, shall be deemed to include the said area or areas and the said definition of “qualifying period” shall be construed as a reference to the said period specified in the order.

Chapter V

Corporation Tax Relief in relation to income from qualifying shipping trade.

28.—(1) In this section— “qualifying ship” means a sea-going vessel which— (a) is owned to the extent of not less than 51 per cent. by a person or persons ordinarily resident in the State, (b) is registered in the State under

Part II

of the Mercantile Marine Act, 1955 , (c) is of not less than 100 tons gross tonnage, and (d) is self-propelled, but notwithstanding anything in paragraphs (a), (b), (c) or (d) of this definition does not include— (i) a fishing vessel, (ii) a tug, (iii) a vessel (including a dredger) used primarily as a floating platform for working machinery or as a diving platform, (iv) a vessel used for the purposes of transporting supplies or personnel to, or providing services in respect of, a mobile or fixed rig, platform, vessel or installation of any kind at sea, and (v) any other vessel of a type which is not normally used for the purposes of qualifying shipping activities; “qualifying shipping activities” means activities carried on by a company in the course of a trade and which consist of— (a) the use of a qualifying ship for the purpose of carrying by sea passengers or cargo for reward, (b) the provision, on board the qualifying ship, of services ancillary to the said use of the qualifying ship, (c) the granting of rights by virtue of which another person provides, or will provide, the said services, on board the said qualifying ship, and (d) the letting on charter of a qualifying ship for use for the said purposes where the operation of the ship, and the crew of the ship, remain under the direction and control of the company; “qualifying shipping trade” means a trade, the income from which is within the charge to corporation tax, carried on in the relevant period, which consists solely of the carrying on of qualifying shipping activities or, in the case of a trade consisting partly of the carrying on of such activities and partly of the carrying on of other activities, that part of the trade consisting solely of the carrying on of qualifying shipping activities and which is treated, by virtue of subsection (2), as a separate trade; “the relevant period” means the period from the 1st day of January, 1987, to the 31st day of December, 2000; “specified capital allowances” means capital allowances in respect of— (a) expenditure incurred by any person, in the relevant period, on the provision of a qualifying ship which is in use in, or is intended to be used in, a qualifying shipping trade, or (b) the diminished value by reason of wear and tear during the relevant period of a qualifying ship in use for the purposes of a qualifying shipping trade, and any such capital allowances shall be specified capital allowances notwithstanding that they are not treated as trading expenses of the qualifying shipping trade.

Provided that this subsection shall not apply in relation to a claim by the company for the set off, under section 16

(3)

Section 39

of the Finance Act, 1980 , is hereby amended, as respects a company carrying on a qualifying shipping trade in any accounting period or part of an accounting period of that company falling within the relevant period, by the insertion after subsection (1CC) (inserted by the Finance Act, 1984 ) of the following subsection: “(1CC1) (a) In this subsection ‘qualifying shipping activities’ and ‘qualifying shipping trade’ have, respectively, the same meanings as in section 28 of the Finance Act, 1987. (b) The following provisions shall apply, for the purposes of relief under this Chapter, in relation to a company carrying on a qualifying shipping trade: (i) qualifying shipping activities carried on in the course of the qualifying shipping trade shall be regarded as the manufacture within the State of goods, (ii) any amount receivable from the carrying on of the said activities shall be regarded as an amount receivable from the sale of goods, and (iii) subsection (1D) shall have effect as respects the company in relation to a claim by it for relief from tax by virtue of this subsection as it has effect as respects a company in relation to a claim by it for relief from tax by virtue of subsection (1B) or (1C).”.

Relief in relation to income of Special Trading Houses.

29.—As respects any relevant accounting period (within the meaning of section 38 of the Finance Act, 1980 ) or any part of such accounting period, commencing on or after the coming into force of this section,

Chapter VI

of

Part I

of the said Finance Act, 1980 , is hereby amended by the insertion in section 39 after subsection (1CC1) (inserted by this Act) of the following subsection— “(1CC2) (a) In this subsection— ‘export goods’ means goods, which, in relation to the manufacturer of those goods, are goods for the purposes of this Chapter and which are exported by a Special Trading House, which is not the manufacturer of the goods, but which, in relation to the relevant accounting period, is the company claiming relief from tax by virtue of this subsection where the selling by the Special Trading House of the goods so exported is selling by wholesale; ‘selling by wholesale’ means selling goods of any class to a person who carries on a business of selling goods of that class or who uses goods of that class for the purposes of a trade or undertaking carried on by him; ‘Special Trading House’ means a company which exists solely for the purpose of carrying on a trade which consists solely of the selling of export goods. (b) For the purposes of this subsection goods are exported when they are transported out of the State in the course of the selling by wholesale of those goods and the goods are not subsequently transported into the State in the course of the selling by wholesale of those goods. (c) The following provisions shall apply for the purposes of relief under this Chapter in relation to a Special Trading House: (i) export goods when exported in the course of its trade by a Special Trading House shall be deemed to have been manufactured by the Special Trading House, notwithstanding that the manufacturer has claimed, or is entitled to claim, relief under this Chapter in respect of the sale by it of those goods, (ii) any amount receivable by the Special Trading House in payment for the sale of export goods shall be regarded as an amount receivable from the sale of goods, and (iii) subsection (1D) shall have effect as respects the company in relation to a claim by it for relief from tax by virtue of this subsection as it has effect as respects a company in relation to a claim by it for relief from tax by virtue of subsection (1B) or (1C). (d) This subsection shall not come into effect until such time as legislation governing the licensing of Special Trading Houses is enacted and shall come into effect subject to such legislation and on such date as the Minister for Finance shall by order appoint.”.

Relief in relation to income from certain trading operations carried on in Custom House Docks Area.

30.—As respects any relevant accounting period within the meaning of section 38 of that Act,

Chapter VI

of

Part I

of the Finance Act, 1980 , is hereby amended by the insertion after section 39A (inserted by the Finance Act, 1981 ) of the following section— “39B.—(1) in this section— ‘the Area’ means the Custom House Docks Area as defined in section 41 of the Finance Act, 1986 ; ‘company’ means any company carrying on a trade; ‘the Minister’ means the Minister for Finance; ‘qualified company’ means a company to which the Minister has given a certificate under subsection (2); ‘relevant trading operations’ means trading operations specified in a certificate given by the Minister under subsection (2); ‘trading operation’ means any trading operation which, apart from this section, is not the manufacture of goods for the purposes of this Chapter.

Provided that the references in this subsection to any service or facility provided for, or any activity carried on on behalf of, a person not ordinarily resident in the State shall not include any such service or facility provided for, or any activity carried on on behalf of, the whole or any part of a trade carried on by that person in the State.

Amendment of Chapter VI (manufacturing companies) or Part I of Finance Act, 1980.

31.—As respects any relevant accounting period (within the meaning of section 38 of the Finance Act, 1980 ), or part of such accountingperiod, commencing on or after the passing of this Act,

Chapter VI

of

Part I

of the said Finance Act, 1980 , is hereby amended by the insertion in section 39 after subsection (1CC2) (inserted by this Act) of the following subsection: “(1CC3) The definition of ‘goods’ contained in subsection (1) shall include plants cultivated in the State, by the process of plant biotechnology known as ‘micro-propagation’ or ‘plant cloning’, in the course of a trade by the company which, in relation to the relevant accounting period, is the company claiming relief under this Chapter in relation to the trade and references in this Chapter to ‘manufactured’ shall be construed, in relation to such plants, as including references to cultivated and words in this Chapter cognate to ‘manufactured’ shall be construed accordingly.”.

Companies: credit for farm tax.

32.—For the purposes of giving credit for farm tax paid by a company and determining the amount of corporation tax payable by a company, section 16 of the Finance Act, 1986 , and section 3 shall apply with any necessary modifications and as if— (a) references in those sections to the year 1986-87 were references to any accounting period ending in that year, (b) references to an individual being liable for the payment of farm tax on a date within a year of assessment were references to a company being liable for the payment of farm tax on any date on or before the 30th day of June, 1987, (c) references in those sections to— (i) “income tax” were references to “corporation tax”, (ii) “individual”, “an individual” and “the individual” were, respectively, references to “company”, “a company” and “the company”, (iii) “he” or “him” and “his” were, respectively, references to “it” and “its”, and (iv) “year of assessment” were references to “accounting period”, (d) references to the amount of farm tax paid or borne by a person in a year of assessment or to the amount of farm tax payable by an individual for a calendar year were references to the amount of farm tax paid or borne by a person on or before the 30th day of June, 1987, and (e) for the Third Schedule to that Act there were substituted the following Schedule— “THIRD SCHEDULE Tax Appropriate to the Profits or Gains from Farming ‘Tax appropriate to the profits or gains from farming’, in relation to a company which is chargeable to corporation tax for an accounting period in respect of profits which include or consist of income from farming (within the meaning of Chapter II of Part I of the Finance Act, 1974), means the amount determined by the formula— F ___ P × T where— F is the amount of the income from farming included in the profits of the company brought into charge to corporation tax for that accounting period, after any deduction from or addition to that income under section 14 of the Corporation Tax Act, 1976 , and after deducting from that income any loss treated as reducing that income, P is the amount of the profits of the company brought into charge to corporation tax for that accounting period before any deduction therefrom for charges on income, expenses of management or other amounts which can be deducted from or set against or treated as reducing profits of more than one description, and T is the amount of corporation tax payable by the company for the accounting period, before any relief in respect of farm tax or advance corporation tax paid or foreign tax and after deducting any corporation tax payable by virtue of

section 101 or 162 of the Corporation Tax Act, 1976 .”.

Application of section 79 (reduced rate of corporation tax for certain income) of Corporation Tax Act, 1976, to certain interest.

33.—As respects any interest to which section 28 of the Finance Act, 1976 , applies on any housing loan (within the meaning of that section) granted on or after the 22nd day of May, 1987, section 79 of the Corporation Tax Act, 1976 , shall apply as if the reference in subsection (1) of the said section 79 to “35 per cent.” were a reference to “45 per cent.”.

Exemption from corporation tax of profits arising from the National Lottery.

34.—Notwithstanding any provision of the Corporation Tax Acts, profits arising in any accounting period ending after the 31st day of December, 1986, to a company authorised by virtue of a licence granted by the Minister for Finance under the National Lottery Act, 1986 , to hold the National Lottery, shall be exempt from corporation tax.

Relief for investment in films.

35.—(1) In this section— “allowable investor company” means, in relation to a qualifying company, a company which is not connected with the qualifying company; “film” means a film which is produced— (a) on a commercial basis with a view to the realisation of profit, and (b) wholly or principally for exhibition to the public in cinemas or by way of television broadcasting, but does not include a film made for exhibition as an advertising programme or as a commercial; “qualifying company” means a company which— (a) is incorporated in the State, and (b) is resident in the State and is not resident elsewhere, and (c) exists solely for the purposes of the production and distribution of a qualifying film or qualifying films; “qualifying film” means a film in respect of which not less than 75 per cent. of the work on the production of the film is carried out in the State and not more than 60 per cent. of the cost of the production of the film is met by relevant investments; “qualifying period” means the period commencing on the date of the passing of this Act and ending on the third anniversary of that date; “relevant investment” means a sum of money which is— (a) paid in a qualifying period to a qualifying company, whether in respect of shares in that qualifying company or otherwise, by an allowable investor company on its own behalf, and (b) paid by such allowable investor company for the purpose of enabling the qualifying company to produce a qualifying film, and (c) used by the qualifying company, within two years of the receipt of that sum, for that purpose, but does not include a sum of money paid to the qualifying company on terms that it will be repaid, and a reference to the making of a relevant investment shall be construed as a reference to the payment of such a sum to a qualifying company.

Provided that, where the amount of the deduction to which the allowable investor company is entitled under this section in an accounting period exceeds its profits for that accounting period, the excess shall be carried forward to the succeeding accounting period and the amount so carried forward shall be treated for the purposes of this section, other than subsection (3), as if it were a relevant investment made in that succeeding accounting period.

(8)

Section 157

of the Corporation Tax Act, 1976 , shall apply for the purposes of this section.

PART II

Customs and Excise Relief for certain hydrocarbon oil.

36.—Where it is shown to the satisfaction of the Revenue Commissioners that used hydrocarbon oil, chargeable with the duty of excise imposed by paragraph 12 (1) of the Imposition of Duties (No. 221) (Excise Duties) Order, 1975 (S.I. No. 307 of 1975), and satisfying the requirements as to viscosity and colour specified in paragraph 3 of the Imposition of Duties (No. 256) (Excise Duty on Hydrocarbon Oils) Order, 1981 (S.I. No. 404 of 1981), was imported on or after the 1st day of August, 1987, upon payment of the said duty of excise and underwent, subsequent to importation, a process of filtering, centrifuging or similar processing in order to render it suitable for use as a fuel oil for industrial purposes, they may, subject to compliance with such conditions as they may think fit to impose, repay the duty so paid, less the sum of any rebate of duty allowed and an amount calculated at the rate of £0.76 per hectolitre on the said used oil:

Provided that no repayment as aforesaid shall be allowed on any hydrocarbon oil which, in the opinion of the Revenue Commissioners, has been rendered suitable by the said processing for use as a lubricating oil or for combustion in the engine of a motor vehicle.

Confirmation of Orders.

37.—The Orders mentioned in the Table to this section are hereby confirmed.

TABLE S.I. No. 438 of 1986 Imposition of Duties (No. 284) (Beer) Order, 1986 S.I. No. 19 of 1987 Imposition of Duties (No. 285) (Excise Duties) Order, 1987

PART III

Value-Added Tax Interpretation (

Part III

).

38.—In this Part— “the Principal Act” means the Value-Added Tax Act, 1972 ; “the Act of 1978” means the Value-Added Tax (Amendment) Act, 1978 ; “the Act of 1985” means the Finance Act, 1985 ; “the Act of 1986” means the Finance Act, 1986 .

Amendment of section 1 (interpretation) of Principal Act.

39.—(a) Section 1 of the Principal Act is hereby amended by— (i) the substitution in subsection (1) in the definition of “livestock” of “, goats, pigs and deer” for “and pigs”, and (ii) the insertion in subsection (2) after paragraph (b) of the following: “and (c) money, which, in relation to money received by a person from another person, has been deducted in accordance with the provisions of— (i)

Chapter III

of

Part I

of the Finance Act, 1987, or (ii) section 17 of the Finance Act, 1970 , and has thereby ceased to be due to the first-mentioned person by the other person,”. (b) The Imposition of Duties (No. 283) (Value-Added Tax) Order, 1986 (S.I. No. 412 of 1986), is hereby revoked.

Amendment of section 11 (rates of tax) of Principal Act.

40.—Section 11 of the Principal Act is hereby amended in subsection (1) (inserted by the Act of 1985) by the substitution in paragraph (d) of “1.7 per cent.” for “2.4 per cent.” (inserted by the Act of 1986).

Amendment of section 12 (deduction for tax borne or paid) of Principal Act.

41.—Section 12 of the Principal Act is hereby amended— (a) by the substitution of the following subsection for subsection (1) (inserted by the Act of 1978): “(1) (a) In computing the amount of tax payable by him in respect of a taxable period, a taxable person may, insofar as the goods and services are used by him for the purposes of his taxable supplies or of any of the qualifying activities, deduct— (i) the tax charged to him during the period by other taxable persons by means of invoices, prepared in the manner prescribed by regulations, in respect of supplies of goods or services to him, (ii) in respect of goods imported by him in the period, the tax paid by him or deferred as established from the relevant customs documents kept by him in accordance with section 16(3), (iii) the tax chargeable during the period in respect of goods treated as supplied by him in accordance with section 3 (1) (e), (iv) the tax chargeable during the period in respect of services treated as supplied by him for consideration in the course or furtherance of his business in accordance with section 5 (3) (d), (v) the tax chargeable during the period, being tax for which he is liable by virtue of section 5 (3A), in respect of services received by him, (vi) if so provided by regulations and subject to and in accordance with any such regulations, the amount of tax, as defined, included in the consideration payable for specified second-hand goods or categories of second-hand goods acquired, in circumstances other than those described in the proviso to section 10 (2), for resale from a person who is not a taxable person or from a taxable person where the goods were used by the said taxable person for the purposes of a business carried on by him, but in relation to the acquisition or application of which he had borne tax and the goods were of such a kind or were used in such circumstances that no part of the said tax was deductible under this section, (vii) the tax chargeable during the period, being tax for which he is liable by virtue of section 8(2), in respect of services received by him, and (viii) tax charged to him during the period by means of invoices prepared in the manner prescribed by regulations and issued to him in accordance with section 12A. (b) In paragraph (a) ‘qualifying activities’ means— (i) transport outside the State of passengers and their accompanying baggage, (ii) services specified in paragraph (i), (ix) (b), (c) or (d), or (xi), of the First Schedule, supplied— (I) outside the Community, or

(II) directly in connection with the export of goods to a place outside the Community, and (iii) supplies of goods or services outside the State which would be taxable supplies if made in the State.”, (b) in subsection (3) (a) (inserted by the Act of 1978) by— (i) the substitution for “in subsection (1), a deduction of tax under that subsection” of “in this section, a deduction of tax under this section”, (ii) the insertion, after subparagraph (iii), of “or”, and (iii) the deletion of all of that part of the said subsection (3)(a) which follows subparagraph (iv), and the said subsection (3)(a), as so amended, is set out in the Table to this paragraph, TABLE

Amendment of section 12A (special provisions for tax invoiced by flat-rate farmers) of Principal Act.

42.—Section 12A (inserted by the Act of 1978) of the Principal Act is hereby amended by the substitution in subsection (1) of “1.7 per cent.” for “2.4 per cent.” (inserted by the Act of 1986).

Amendment of section 13 (remission of tax on goods exported, etc.) of Principal Act.

43.—Section 13 (inserted by the Act of 1978) of the Principal Act is hereby amended by the insertion in subsection (3) (c) after “within the State”, where that secondly occurs, of “or in respect of means of transport for hiring out for utilisation within the State”.

Amendment of section 32 (regulations) of Principal Act.

44.—Section 32 of the Principal Act is hereby amended by the insertion in subsection (2A) (inserted by the Act of 1978) after “section 5 (7),”, of “subsection 1 (a) (vi) of section 12,”.

Amendment of First Schedule to Principal Act.

45.—The First Schedule (inserted by the Act of 1978) to the Principal Act is hereby amended— (a) by the substitution of the following paragraph for paragraph (i): “(i) Financial services consisting of— (a) the issue, transfer or receipt of, or any dealing in, stocks, shares, debentures and other securities, other than documents establishing title to goods, (b) the arranging for, or the underwriting of, an issue specified in subparagraph (a), (c) the operation of any current, deposit or savings account, (d) the issue, transfer or receipt of, or any dealing in, currency, bank notes and metal coins, in use as legal tender in any country, excluding such bank notes and coins when supplied as investment goods or as collectors' pieces, (e) lending money or affording credit otherwise than by means of hire-purchase or credit-sale transactions, (f) the granting of, or any dealing in, credit guarantees or any other security for money and the management of credit guarantees by the person who granted the credit, (g) the management of a unit trust scheme which is— (I) registered under the Unit Trusts Act, 1972 , (II) administered by the holder of an authorisation granted pursuant to the European Communities (Life Assurance) Regulations (S.I. No. 57 of 1984), or by a person who is deemed, pursuant to Article 6 of those Regulations, to be such a holder, the criteria in relation to which are the criteria specified, in relation to an arrangement administered by the holder of a licence under the Insurance Act, 1936 , in section 7

Amendment of Second Schedule to Principal Act.

46.— The Second Schedule (inserted by the Finance Act, 1976 ) to the Principal Act is hereby amended by the deletion in subparagraph (d) (I) of paragraph (xii) (inserted by the Act of 1985) of “drained,”.

Amendment of Sixth Schedule to Principal Act.

47.—The Sixth Schedule (inserted by the Act of 1985) to the Principal Act is hereby amended by the insertion— (a) after paragraph (xif) (inserted by the Act of 1986) of the following paragraph: “(xig) tour guide services;” and (b) after paragraph (xiic) (inserted by the Act of 1986) of the following paragraphs: “(xiii) the supply to a person of photographic prints (other than goods produced by means of a photocopying process), slides or negatives, which have been produced from goods provided by that person; (xiiia) goods being— (a) photographic prints (other than goods produced by means of a photocopying process), mounted or unmounted, but unframed, (b) slides and negatives, and (c) cinematographic and video film, which record particular persons, objects or events, supplied under an agreement to photograph those persons, objects or events; (xiiib) the supply by a photographer of— (a) negatives which have been produced from film exposed for the purposes of his business, and (b) film which has been exposed for the purposes of his business; (xiiic) photographic prints produced by means of a vending machine which incorporates a camera and developing and printing equipment; (xiiid) services consisting of— (a) the editing of photographic, cinematographic and video film, and (b) microfilming; (xiiie) agency services in regard to a supply specified in paragraph (xiii); (xiiif) services consisting of the acceptance for disposal of waste material; (xiiig) instruction in the driving of mechanically propelled road vehicles, not being education, training or retraining of the kinds specified in paragraph (ii) of the First Schedule; (xiiih) admissions to exhibitions, of the kind normally held in museums and art galleries, of objects of historical, cultural, artistic or scientific interest;”.

PART IV

Stamp Duties Levy on banks.

48.—(1) In this section— “assessable amount” means the amount arrived at by dividing thespecified amount by twelve and deducting £10,000,000 from the quotient; “bank” means a person who, on the 1st day of September, 1986, was the holder of a licence granted under section 9 of the Central Bank Act, 1971 ; “relevant sum”, in relation to a return, means a sum shown in the return other than a sum shown in respect of foreign currency; “returns”, in relation to a bank, means the returns, entitled “MONTHLY RETURN OF ALL LICENSED BANKS: RESIDENT BRANCHES”, furnished to the Central Bank of Ireland by the bank in respect of the assets and liabilities of the bank as on the 15th day of January, 1986, the 19th day of February, 1986, the 31st day of March, 1986, the 16th day of April, 1986, the 21st day of May, 1986, the 30th day of June, 1986, the 16th day of July, 1986, the 20th day of August, 1986, the 30th day of September, 1986, the 15th day of October, 1986, the 19th day of November, 1986, and the 31st day of December, 1986; “specified amount”, in relation to a bank, means the amount obtained by deducting the aggregate amount of the relevant sums shown in respect of Item 302.2 in supplement 1 of the returns of the bank from the aggregate amount of the relevant sums shown in the returns in respect of Government deposits and Non-Government deposits and shown as liabilities of the bank in such returns.

Provided that in the case where the assessable amount shown in the statement does not exceed £100,000,000 stamp duty of an amount equal to 0.3 per cent. of the assessable amount shown therein shall be charged.

Amendment of section 92 (levy on certain premiums of insurance) of Finance Act, 1982.

49.—(1)

Section 92

of the Finance Act, 1982 , is hereby amended by the substitution in subsection (8) (inserted by the Finance Act, 1984 ) of “three per cent.” for “one and two-thirds per cent.”.

PART V

Capital Acquisitions Tax Amendment of section 54 (provisions relating to charities, etc.) of Capital Acquisitions Tax Act, 1976.

50.—(1)

Section 54

of the Capital Acquisitions Tax Act, 1976 , is hereby amended by the substitution of the following subsection for subsection (2): “(2) A gift or an inheritance which is taken for public or charitable purposes shall be exempt from tax, and shall not be taken into account in computing tax, to the extent that the Commissioners are satisfied that it has been, or will be, applied to purposes which, in accordance with the law of the State, are public or charitable.”.

PART VI

Miscellaneous Capital Services Redemption Account.

51.—(1) In this section— “the principal section” means section 22 of the Finance Act, 1950 ; “the 1986 amending section” means section 111 of the Finance Act, 1986 ; “the thirty-seventh additional annuity” means the sum charged on the Central Fund under subsection (4); “the Minister”, “the Account” and “capital services” have the same meanings respectively as they have in the principal section.

Amendment of section 162 (Collector-General) of Income Tax Act, 1967.

52.—

Section 162

of the Income Tax Act, 1967 , is hereby amended by the substitution, in subsection (3), of the following paragraphs for paragraphs (a) and (b): “(a) The Revenue Commissioners may nominate persons to exercise on behalf of the Collector-General and at his direction any or all of the powers and functions conferred upon him by any of the provisions of the Tax Acts. (b) Those powers and functions, as well as being exercisable by the Collector-General, shall also be exercisable on his behalf and at his direction by persons nominated under this subsection.”.

Amendment of section 21 (institution of proceedings for fines, etc.) of Inland Revenue Regulation Act, 1890.

53.—

Section 21

of the Inland Revenue Regulation Act, 1890 , is hereby amended by the substitution of the following subsection for subsection (1): “(1) It shall not be lawful to commence proceedings against any person for the recovery of any fine, penalty, or forfeiture under any Act relating to Inland Revenue, or for the condemnation of any goods seized as forfeited under any such Act, except in the name of an officer or in the name of the Attorney General or in the name of the Director of Public Prosecutions.”.

Care and management of taxes and duties.

54.—All taxes and duties imposed by this Act are hereby placed under the care and management of the Revenue Commissioners.

Short title, construction and commencement.

55.—(1) This Act may be cited as the Finance Act, 1987.

(2)

Part I

(so far as relating to income tax) shall be construed together with the Income Tax Acts and (so far as relating to corporation tax) shall be construed together with the Corporation Tax Acts.

(3)

Part II

(so far as relating to customs) shall be construed togetherwith the Customs Acts and (so far as relating to duties of excise) shall be construed together with the statutes which relate to the duties of excise and to the management of those duties.

(4)

Part III

shall be construed together with the Value-Added Tax Acts, 1972 to 1986, and may be cited together therewith as the Value-Added Tax Acts, 1972 to 1987.

(5)

Part IV

shall be construed together with the Stamp Act, 1891, and the enactments amending or extending that Act.

(6)

Part V

shall be construed together with the Capital Acquisitions Tax Act, 1976 , and the enactments amending or extending that Act.

(7)

Part I

shall, save as is otherwise expressly provided therein, be deemed to have come into force and shall take effect as on and from the 6th day of April, 1987.

Part III

, sections 40 and 42 shall be deemed to have come into force and shall take effect as on and from the 1st day of May, 1987, section 39 (a) (ii) shall be deemed to have come into force and shall take effect as on and from the 6th day of June, 1987, sections 46 and 47 shall be deemed to have come into force and shall take effect as on and from the 1st day of July, 1987, and sections 41 and 45 shall come into force on the 1st day of November, 1987.

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