Finance (Taxation of Profits of Certain Mines) Act, 1974

Finance (Taxation of Profits of Certain Mines) Act, 1974 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 1974 Finance (Taxation of Profits of Certain Mines) Act, 1974 Finance (Taxation of Profits of Certain Mines) Act, 1974 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 17 of 1974 FINANCE (TAXATION OF PROFITS OF CERTAIN MINES) ACT, 1974 ARRANGEMENT OF SECTIONS Section

Section 1

Interpretation.

Section 2

Allowance in respect of development expenditure and exploration expenditure.

Section 3

Expenditure on abortive exploration.

Section 4

Exploration expenditure incurred by certain bodies corporate.

Section 5

Expenditure incurred by person not engaged in the trade of mining.

Section 6

Investment allowance in respect of exploration expenditure.

Section 7

Allowances for machinery and plant.

Section 8

Annual allowance for mineral depletion.

Section 9

Allowance in relation to corporation profits tax.

Section 10

Marginal mine allowance.

Section 11

Charge to income tax on sums received from sale of scheduled mineral assets.

Section 12

Charge to corporation profits tax on sums received from sale of scheduled mineral assets.

Section 13

Amendment of section 387 of Act of 1967.

Section 14

Amendment of section 389 of Act of 1967.

Section 15

Termination of relief from income tax.

Section 16

Option in relation to charge to income tax for 1974-75.

Section 17

Termination of relief from corporation profits tax.

Section 18

Short title, construction and commencement.

Acts Referred to Finance (Profits of Certain Mines) (Temporary Relief from Taxation) Act, 1956 1956, No. 8 Income Tax Act, 1967 1967. No. 6

Part V of the

Finance Act, 1920 1920, c. 18 Finance Act, 1946 1946, No. 15 Finance Act, 1973 1973, No. 19 Finance Act, 1967 1967, No. 17 Finance Act, 1971 1971, No. 23 Finance Act, 1959 1959, No. 18 Minerals Development Act, 1940 1940, No. 31 Number 17 of 1974 FINANCE (TAXATION OF PROFITS OF CERTAIN MINES) ACT, 1974 AN ACT TO AMEND THE LAW IN RELATION TO THE TAXATION OF PROFITS OF CERTAIN MINES. [13th July, 1974] BE IT ENACTED BY THE OIREACHTAS AS FOLLOWS:

Interpretation.

1.—(1) In this Act, except so far as is otherwise provided or the context otherwise requires— “the Act of 1956” means the Finance (Profits of Certain Mines) (Temporary Relief from Taxation) Act, 1956 ; “the Act of 1967” means the Income Tax Act, 1967 ; “the Acts relating to corporation profits tax” means Part V of the Finance Act, 1920 , and the enactments amending or extending that Part; “development expenditure” means capital expenditure— (a) on the development of a qualifying mine, or (b) on the construction of any works in connection with a qualifying mine which are of such a nature that, when the mine ceases to be operated, they are likely to have so diminished in value that their value will be little or nothing, and includes interest on money borrowed to meet such capital expenditure, but does not include— (c) expenditure on the acquisition of the site of the mine or the site of any such works or of rights in or over any such site, or (d) expenditure on the acquisition of a scheduled mineral asset, or (e) expenditure on works constructed wholly or mainly for subjecting the raw product of the mine to any process except a process designed for preparing the raw product for use as such; “exploration expenditure” means capital expenditure on searching in the State for deposits of scheduled minerals or on testing such deposits or winning access thereto and includes capital expenditure on systematic searching for areas containing scheduled minerals and searching by drilling or other means for scheduled minerals within those areas, but does not include expenditure on operations in the course of working a qualifying mine or expenditure which is development expenditure; “mine development allowance” has the same meaning as in section 245 of the Act of 1967; “qualifying mine” means a mine that is being worked for the purpose of obtaining scheduled minerals; “scheduled mineral asset” means a deposit of scheduled minerals or land comprising such a deposit or an interest in or right over such deposit or land; “scheduled minerals” has the same meaning as in section 382 of the Act of 1967; “tax” means income tax, sur-tax or corporation profits tax, as may be appropriate.

Allowance in respect of development expenditure and exploration expenditure.

2.—(1) Where a person who is carrying on the trade of working a qualifying mine incurs, on or after the 6th day of April, 1974, any development expenditure or exploration expenditure and makes application under section 245 of the Act of 1967 for a mine development allowance for a year of assessment in respect of such expenditure— (a) that expenditure shall be deemed to be expenditure in respect of which that allowance may be granted, whether or not, in the case of exploration expenditure, a deposit of scheduled minerals is found as a result of the expenditure, (b) the amount of such allowance for that year of assessment shall be equal to the total amount of— (i) the exploration expenditure, and (ii) in the case of development expenditure the amount of the difference between that expenditure and the amount which, in the opinion of the inspector, the assets representing that expenditure are likely to be worth at the end of the estimated life of the aforesaid mine, and (c) in relation to a case in which this section has had effect, any reference in the Income Tax Acts to an allowance made under the said section 245 shall be construed as including a reference to an allowance made under that section by virtue of this section:

Provided that no account shall be taken, for the purposes of this section, of exploration expenditure as a result of which a deposit of scheduled minerals is not found if the expenditure was incurred more than ten years prior to the date on which the person aforesaid commences to carry on the trade of working a qualifying mine.

Expenditure on abortive exploration.

3.—(1) Where a person who is, on the 6th day of April, 1974, carrying on the trade of working a qualifying mine incurred exploration expenditure, on or after the 6th day of April, 1967, but before the said 6th day of April, 1974, and that expenditure was not incurred in connection with the said qualifying mine, then, in charging to tax the profits or gains of the said trade for the year of assessment 1974-75, there shall be allowed a deduction of an amount equal to the amount of that expenditure.

Provided that in any case where part of the ordinary share capital of any body corporate is acquired by a Minister of State, such acquisition shall be disregarded in determining whether or not there was or is such a change in ownership as aforesaid.

Exploration expenditure incurred by certain bodies corporate.

4.—(1) Where exploration expenditure, in respect of which an allowance may be claimed by virtue of section 2 or section 3, is or has been incurred by a body corporate (hereinafter in this section referred to as the exploration company) and— (a) another body corporate is, or is deemed to be, a wholly-owned subsidiary of the exploration company, or (b) the exploration company is, or is deemed to be, a wholly-owned subsidiary of another body corporate, the expenditure or so much of it as the exploration company specifies— (i) in the case referred to in paragraph (a) may, at the election of the exploration company, be deemed to have been incurred by such other body corporate (being a body corporate which is, or is deemed to be, a wholly-owned subsidiary of the exploration company) as the exploration company specifies, (ii) in the case referred to in paragraph (b) may, at the election of the exploration company, be deemed to have been incurred by the body corporate (hereinafter referred to as the parent body) of which the exploration company was, at the time the expenditure was incurred, a wholly-owned subsidiary or by such other body corporate (being a body corporate which is, or is deemed to be, a wholly-owned subsidiary of the parent body) as the exploration company specifies, and in a case where the said expenditure was incurred on a date prior to the incorporation of the body corporate so specified, the provisions of this Act shall apply, in relation to the granting of any allowance in respect of such expenditure, as if the said body corporate had been in existence at the time the expenditure was incurred and had incurred the expenditure at that time:

Provided that— (i) the same expenditure shall not be taken into account in relation to more than one trade by virtue of this section, and (ii) a deduction or allowance shall not be granted in respect of the same expenditure both by virtue of this section and under some other provision of the Income Tax Acts or the Acts relating to corporation profits tax.

Provided that where part of the ordinary share capital of any body corporate is held by a Minister of State and the remainder of the ordinary share capital of that body corporate is held by another body corporate, the first-mentioned body corporate shall be deemed, for purposes of subsection (1), to be a wholly-owned subsidiary of the last-mentioned body corporate.

Expenditure incurred by person not engaged in the trade of mining.

5.—(1) Where, whether before, on or after the 6th day of April, 1974, a person incurs or incurred exploration expenditure which resulted in the finding of a deposit of scheduled minerals and, without having carried on any trade which consists of or includes the working of that deposit and without having claimed any allowance or deduction under or by virtue of this Act in respect of that expenditure, he sells any assets representing that expenditure to another person, then, if that other person carries on such a trade as aforesaid in connection with that deposit, that other person shall, for the purposes of this Act, be deemed to have incurred for the purposes of the trade and in connection with the deposit, exploration expenditure equal to the amount of the exploration expenditure which is represented by the assets or the price paid by him for the assets, whichever is the smaller, and that expenditure shall be deemed to have been incurred by him on the date on which he commences to carry on the trade aforesaid.

Investment allowance in respect of exploration expenditure.

6.—(1) Where a person who is carrying on the trade of working a qualifying mine incurs, on or after the 6th day of April, 1974, exploration expenditure in relation to which section 2 has effect, there shall, in addition to any mine development allowance granted in respect of such expenditure, be made to him, for the year of assessment for which such mine development allowance is granted, an allowance (which shall be known as an exploration investment allowance) equal to one-fifth of such expenditure and section 245 (6) of the Act of 1967 shall apply to an exploration investment allowance as it applies to a mine development allowance.

Provided that this paragraph shall not apply in respect of expenditure deemed, under section 4, to have been incurred by a body corporate other than the body corporate which incurred the expenditure.

Allowances for machinery and plant.

7.—(1) Where, on or after the 6th day of April, 1974, 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) is provided for use for the purposes of the trade of working a qualifying mine, the said machinery or plant shall, if it is not qualifying machinery or plant, be deemed, for the purpose of section 11 of the Finance Act, 1967 , to be qualifying machinery or plant.

Annual allowance for mineral depletion.

8.—(1) Where a person carrying on the trade of working a qualifying mine incurs after the 31st day of March, 1974, capital expenditure on the acquisition of a scheduled mineral asset entitling him to work deposits of scheduled minerals and in connection with that trade he commences to work those deposits, he shall be entitled to mine development allowance under section 245 of the Act of 1967 in respect of such capital expenditure to the extent that he would have been entitled to such allowance if the said capital expenditure had been capital expenditure incurred in the development of the mine, but section 2 shall not apply in respect of any such expenditure.

Allowance in relation to corporation profits tax.

9.—

Section 69

Marginal mine allowance.

10.—(1) In this section— “marginal mine” means a qualifying mine in respect of which the Minister for Industry and Commerce gives a certificate stating that he is satisfied that the profits derived or to be derived from the working of that mine are such that, if tax is to be charged on those profits in accordance with the provisions of the Income Tax Acts and the Acts relating to corporation profits tax, but excluding the provisions of this section, the mine is unlikely to be worked or to continue to be worked.

Charge to income tax on sums received from sale of scheduled mineral assets.

11.—(1) Where, after the 31st day of March, 1974, a person resident in the State sells any scheduled mineral asset and the net proceeds of the sale consist wholly or partly of a capital sum, he shall, subject to the provisions of this section, be charged to tax under Case IV of Schedule D for the year of assessment in which the sum is received by him on an amount equal to that sum:

Provided that where that person is an individual and, not later than twelve months after the end of the year of assessment in which the sum is paid, by notice in writing to the inspector, he elects to be charged to tax for the said year of assessment and for each of the five succeeding years of assessment, on an amount equal to one-sixth of that sum, he shall be so charged.

Provided that where that person is an individual and, not later than twelve months after the end of the year of assessment in which the sum is paid, by notice in writing to the Revenue Commissioners, he elects that the said sum shall be treated for the purpose of tax for that year and for each of the five succeeding years as if one-sixth thereof, and no more, were included in his income chargeable to tax for each of those years respectively, it shall be so treated, and all such repayments and assessments of tax for each of those years shall be made as are necessary to give effect to the election, so, however, that— (i) the election shall not affect the amount of tax falling to be deducted and accounted for under the said section 434, (ii) where any sum is deducted under the said section 434 any adjustments necessary to give effect to the election shall be made by way of repayment of tax, and (iii) the said adjustments shall be made year by year and as if one-sixth of the sum deducted had been deducted in respect of tax for each year, and no repayment of, or of any part of, that portion of the tax deducted which is to be treated as deducted in respect of tax for any year shall be made unless and until it is ascertained that the tax (other than surtax) ultimately falling to be paid for that year is less than the amount of tax (other than sur-tax) paid for that year.

Provided that nothing in this subsection shall affect the amount of tax falling to be deducted and accounted for under section 434 of the Act of 1967 by virtue of subsection (2), and where any sum is deducted under the said section 434, any adjustment necessary to give effect to the provisions of this subsection shall be made by way of repayment of tax.

Charge to corporation profits tax on sums received from sale of scheduled mineral assets.

12.—Where, after the 31st day of March, 1974, a body corporate sells a scheduled mineral asset and the net proceeds of the sale are, by virtue of section 11, to be charged to income tax, the amount to be so charged shall be treated for the purposes of corporation profits tax as profits or gains arising to the body corporate in the accounting period in which occurs the date on which the said net proceeds become due and shall be charged to corporation profits tax accordingly.

Amendment of section 387 of Act of 1967.

13.—(1) Section 387 (2) (a) of the Act of 1967 is hereby amended, in respect of companies that commenced or commence to trade in relation to a qualifying mine whether before, on or after the 6th day of April, 1974, by the substitution of “beginning on the commencement day and ending on the 5th day of April, 1974” for “two hundred and forty months beginning on the commencement day” and the said section 387 (2) (a), as so amended, is set out in the Table to this section.

TABLE 387. (2) (a) Where a dividend is paid wholly or in part out of the profits and, as respects such dividend, the dividend period is wholly within a period (hereafter in this Chapter referred to as the exemption period) beginning on the commencement day and ending on the 5th day of April, 1974, the company shall be entitled to deduct income tax in accordance with section 456 from such part, if any, of the dividend as exceeds the relevant payment, but shall not be entitled to deduct income tax from the relevant payment.

Amendment of section 389 of Act of 1967.

14.—Section 389 of the Act of 1967 is hereby amended, in respect of companies that commenced or commence to trade in relation to a qualifying mine whether before, on or after the 6th day of April, 1974, by the substitution of “5th day of April, 1974” for “expiration of the twenty-first year” in both places where it occurs and the said section 389, as so amended, is set out in the Table to this section.

TABLE 389. This Chapter shall not have effect for the purpose of income tax in relation to any year of assessment beginning after the 5th day of April, 1974, but this provision shall not prevent section 387 from applying to a dividend paid after the 5th day of April, 1974, in a case in which the whole or part of the dividend is paid out of the profits of a period wholly or partly within the exemption period.

Termination of relief from income tax.

15.—Relief from income tax shall not be given under section 386 of the Act of 1967 to a company in respect of any year of assessment after the year 1973-74, whether the company commenced to trade in relation to the working of a qualifying mine before, on or after the 6th day of April, 1974.

Option in relation to charge to income tax for 1974-75.

16.—(1) Where a person who is carrying on the trade of working a qualifying mine is chargeable to income tax for the year 1974-75 and would, in accordance with the provisions of section 58 (1) of the Act of 1967, be charged to income tax under Case I of Schedule D on the full amount of the profits or gains of the year preceding that year, he may, by notice in writing given to the inspector before the 1st day of August, 1974, elect to be charged to income tax for the year 1974-75 by reference to the amount of the profits or gains of that year.

Termination of relief from corporation profits tax.

17.—(1) Subject to subsection (2), relief from corporation profits tax shall not be given under section 6 of the Act of 1956 to a company for any accounting period of the company ending on or after the 6th day of April, 1974, whether the company commenced to trade in relation to the working of a qualifying mine before, on or after the said date.

Short title, construction and commencement.

18.—(1) This Act may be cited as the Finance (Taxation of Profits of Certain Mines) Act, 1974.

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