Number 3 of 2000

FINANCE ACT, 2000

ARRANGEMENT OF SECTIONS

PART 1

Income Tax, Corporation Tax and Capital Gains Tax

Chapter 1

Interpretation

Chapter 2

Income Tax

Chapter 3

Dividend Withholding Tax

Chapter 4

Income Tax, Corporation Tax and Capital Gains Tax

Chapter 5

Corporation Tax

Chapter 6

Capital Gains Tax

Chapter 7

Income Tax and Corporation Tax: Reliefs for Renewal and Improvement of Certain Towns

PART 2

Customs and Excise

Miscellaneous

PART 3

Value-Added Tax

PART 4

Stamp Duties

PART 5

Residential Property Tax

PART 6

Capital Acquisitions Tax

PART 7

Miscellaneous

SCHEDULE 1

Amendments consequential on the introduction of standard rated allowances

SCHEDULE 2

Amendments and Repeals Consequential on Abolition of Tax Credits

SCHEDULE 3

Rates of Excise Duty on Tobacco Products

Number 3 of 2000

FINANCE ACT, 2000

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. [23rd March, 2000]

BE IT ENACTED BY THE OIREACHTAS AS FOLLOWS:

PART 1

Income Tax, Corporation Tax and Capital Gains Tax

Chapter 1

Interpretation

Interpretation (Part1).

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

Chapter 2

Income Tax

Amendment of section 188 (age exemption and associated marginal relief) of Principal Act.

2.—Section 188 of the Principal Act is amended, as respects the year of assessment 2000-2001 and subsequent years of assessment, by the substitution of the following for subsection (2):

“(2) In this section, ‘the specified amount’ means, subject to section 187(2)—

(a) in the case of an individual referred to in paragraph (a) of the definition of ‘specified amount’ in section 461(1) (inserted by the Finance Act, 1999 ), £15,000, and

(b) in any other case, £7,500.”.

Alteration of rates of income tax.

3.—As respects the year of assessment 2000-2001 and subsequent years of assessment, the Principal Act is amended as follows—

(a) in section 15, by the substitution of the following for subsection (2) and the Table to the section:

“(2) Where a person who is charged to income tax for any year of assessment is an individual (other than an individual acting in a fiduciary or representative capacity), such individual shall, notwithstanding anything in the Income Tax Acts but subject to section 16(2), be charged to tax on such individual's taxable income—

(a) in a case in which such individual is assessed to tax otherwise than in accordance with section 1017 and is not an individual referred to in paragraph (b), at the rates specified in Part 1 of the Table to this section, or

(b) in a case in which the individual is assessed to tax otherwise than in accordance with section 1017 and is entitled to a reduction of tax provided for in section 462, at the rates specified in Part 2 of the Table to this section, or

(c) subject to subsections (3) and (5), in a case in which such individual is assessed to tax in accordance with section 1017, at the rates specified in Part 3 of the Table to this section,

and the rates in each Part of that Table shall be known respectively by the description specified in column (3) in each such Part opposite the mention of the rate or rates, as the case may be, in column (2) of that Part.

(3) Subject to subsections (4) and (5)—

(a) where an individual is charged to tax for a year of assessment in accordance with section 1017, and

(b) both the individual and his or her spouse are each in receipt of income in respect of which the individual is chargeable to tax in accordance with that section,

the part of his or her taxable income chargeable to tax at the standard rate specified in column (1) of Part 3 of the Table to this section shall be increased by an amount which is the lesser of—

(i) £6,000, and

(ii) the specified income of the individual or the specified income of the individual's spouse, whichever is the lesser.

(4) For the purpose of subsection (3), ‘specified income’ means total income after deducting from such income any deduction attributable to a particular source of income.

(5) Where all or any part of an increase under subsection (3) in the amount of an individual's taxable income chargeable to income tax at the standard rate is attributable to emoluments from which tax is deductible in accordance with the provisions of Chapter 4 of Part 42 and any regulations made thereunder, then, the full amount of the increase, or that part of the increase, as may be appropriate in the circumstances, shall only be used in accordance with the provisions of that Chapter and those regulations in calculating the amount of tax to be deducted from those emoluments.

TABLE

PART 1

PART 2

PART 3

and

(b) in section 1024—

(i) by the substitution of the following for paragraph (c) of subsection (2):

“(c) Subject to subsection (4), Part 1 of the Table to section 15 shall apply to each of the spouse concerned.”,

and

(ii) by the substitution of the following for subsection (4):

“(4) Where the part of the taxable income of a spouse chargeable to tax in accordance with subsection (2)(c) at the standard rate is less than that of the other spouse and is less than the part of taxable income specified in column (1) of Part 1 of the Table to section 15 (in this subsection referred to as the ‘appropriate part’) in respect of which the first-mentioned spouse is so chargeable to tax at that rate, the part of taxable income of the other spouse which by virtue of subsection (2)(c) is to be charged to tax at the standard rate shall be increased, to an amount not exceeding the part of taxable income specified in column (1) of Part 3 of the Table to section 15 in respect of which an individual to whom that Part applies is so chargeable at that rate, by the amount by which the taxable income of the first-mentioned spouse chargeable to tax at the standard rate is less than the appropriate part.”.

Amendment of section 461 (standard rated personal allowances) of Principal Act.

4.—Section 461 (inserted by the Finance Act, 1999 ) of the Principal Act is amended, as respects the year of assessment 2000-2001 and subsequent years of assessment, by the substitution in the definition of “the specified amount” in subsection (1) of “£9,400” for “£8,400” and “£4,700” for “£4,200”, and the said definition, as so amended, is set out in the Table to this section.

TABLE

“the specified amount”, in relation to an individual for a year of assessment, means—

(a) £9,400, in a case in which the claimant is—

(i) a married person who—

(I) is assessed to tax for the year of assessment in accordance with the provisions of section 1017, or

(II) proves that his or her spouse is not living with him or her but is wholly or mainly maintained by him or her for the year of assessment and that the claimant is not entitled, in computing his or her income for tax purposes for that year, to make any deduction in respect of the sums paid by him or her for the maintenance of his or her spouse,

or

(ii) a widowed person, other than a person to whom subparagraph (i) applies, whose spouse has died in the year of assessment,

and

(b) £4,700 in the case of any other claimant.

Additional standard rated allowance for certain widowed persons.

5.—As respects the year of assessment 2000-2001 and subsequent years of assessment, the Principal Act is amended—

(a) by the substitution of the following for section 461A:

and

(b) in the Table to section 458—

(i) by the deletion of “Section 461A” from Part 1, and

(ii) by the insertion, in Part 2, after “Section 461(2)” of “Section 461A”.

Widowed parents and other single parents: standard rated allowance.

6.—As respects the year of assessment 2000-2001 and subsequent years of assessment, the Principal Act is amended—

(a) in section 462, by the substitution in subsection (1) of “£4,700” for “£1,050” in the definition of “the specified amount”,

(b) by the deletion of section 462A (inserted by the Finance Act, 1999 ), and

(c) in the Table to section 458, by the deletion of “Section 462A” from Part 1.

Special relief for widowed parent following death of spouse.

7.—As respects the year of assessment 2000-2001 and subsequent years of assessment, the Principal Act is amended—

(a) by the substitution of the following for section 463:

and

(b) in the Table to section 458—

(i) by the deletion of “Section 463” from Part 1, and

(ii) by the insertion, in Part 2, after “Section 462” of “Section 463”.

Age allowance.

8.—As respects the year of assessment 2000-2001 and subsequent Age allowance. years of assessment, the Principal Act is amended—

(a) by the substitution of the following for section 464:

and

(b) in the Table to section 458—

(i) by the deletion of “Section 464” from Part 1, and

(ii) by the insertion, in Part 2, after “Section 463” (inserted by this Act) of “Section 464”.

Incapacitated children.

9.—As respects the year of assessment 2000-2001 and subsequent years of assessment, the Principal Act is amended—

(a) by the substitution of the following for section 465:

and

(b) in the Table to section 458—

(i) by the deletion of “Section 465” from Part 1, and

(ii) by the insertion, in Part 2, after “Section 464” (inserted by this Act) of “Section 465”.

Dependent relative.

10.— As respects the year of assessment 2000-2001 and subsequent years of assessment, the Principal Act is amended—

(a) by the substitution of the following for section 466:

and

(b) in the Table to section 458—

(i) by the deletion of “Section 466” from Part 1, and

(ii) by the insertion, in Part 2, after “Section 465” (inserted by this Act) of “Section 466”.

Relief for blind persons.

11.— As respects the year of assessment 2000-2001 and subsequent years of asessment, the Principal Act is amended—

(a) by the substitution of the following for section 468:

and

(b) in the Table to section 458—

(i) by the deletion of “Section 468” from Part 1, and

(ii) by the insertion, in Part 2, after “Section 466A” (inserted by this Act) of “Section 468”.

Home carer's allowance.

12.— As respects the year of assessment 2000-2001 and subsequent years of assessment, the Principal Act is amended—

(a) in Chapter 1 of Part 15 by the insertion of the following section after section 466:

and

(b) in the Table to section 458, by the insertion, in Part 2, after “Section 466” (inserted by this Act) of “Section 466A”.

Amendment of section 473 (allowance for rent paid by certain tenants) of Principal Act.

13.— As respects the year of assessment 2000-2001 and subsequent years of assessment, section 473 of the Principal Act is amended—

(a) in subsection (1)—

(i) by the insertion of the following definition before the definition of “residential premises”:

“‘appropriate percentage’, in relation to a year of assessment, means a percentage equal to the standard rate of tax for that year;”, and

(ii) by the insertion of the following definition before the definition of “tenancy”:

“‘the specified limit’, in relation to an individual for a year of assessment, means—

(a) in the case of a married person assessed to tax in accordance with section 1017, £1,500; but, if at any time during the year of assessment the individual was of the age of 55 years or over, ‘the specified limit’ means £4,000,

(b) in the case of a widowed person, £1,125; but, if at any time during the year of assessment the individual was of the age of 55 years or over, ‘the specified limit’ means £3,000, and

(c) in any other case, £750; but, if at any time during the year of assessment the individual was of the age of 55 years or over, ‘the specified limit’ means £2,000;”,

(b) by the substitution of the following subsection for subsection (2):

“(2) Where an individual (in this section referred to as the ‘claimant’) proves that in the year of assessment he or she has made a payment on account of rent in respect of residential premises which, during the period in respect of which the payment was made, was his or her main residence, the income tax to be charged on the claimant, other than in accordance with section 16(2), for that year of assessment shall be reduced by an amount which is the least of—

(a) the amount equal to the appropriate percentage of the aggregate of such payments proved to be so made,

(b) the appropriate percentage of the specified limit in relation to the claimant for the year of assessment, and

(c) the amount that reduces that income tax to nil.”,

(c) by the substitution of the following subsection for subsection (3):

“(3) For the purposes of this section, where a claimant is a married person assessed to tax for the year of assessment in accordance with section 1017, any payments made by the claimant's spouse, in respect of which that spouse would have been entitled to relief under this section if he or she were assessed to tax for the year of assessment in accordance with section 1016 (apart from subsection (2) of that section), shall be deemed to have been made by the claimant.”,

(d) by the substitution of the following subsection for subsection (10):

“(10) Any relief under this section shall be in substitution for and not in addition to any relief to which the claimant might be entitled in respect of the same payment under any other provision of the Income Tax Acts.”,

and

(e) in the Table to section 458—

(i) by the deletion of “Section 473(2)” from Part 1, and

(ii) by the substitution in Part 2 of “Section 473” for “Section 473(3)”.

Standard rating of allowances: consequential provisions.

14.— The provisions of the Principal Act referred to in Schedule 1 are amended as specified in that Schedule.

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

15.— Section 122 of the Principal Act is amended, as respects the year 2000-2001 and subsequent years of assessment, by the substitution in the definition of “the specified rate” in paragraph (a) of subsection (1) of “4 per cent” for “6 per cent” in both places where it occurs, and the said definition, as so amended, is set out in the Table to this section.

TABLE

“the specified rate”, in relation to a preferential loan, means—

(i) in a case where—

(I) the interest paid on the preferential loan qualifies for relief under section 244, or

(II) if no interest is paid on the preferential loan, the interest which would have been paid on that loan (if interest had been payable) would have so qualified,

the rate of 4 per cent per annum or such other rate (if any) prescribed by the Minister for Finance by regulations,

(ii) in a case where—

(I) the preferential loan is made to an employee by an employer,

(II) the making of loans for the purposes of purchasing a dwelling house for occupation by the borrower as a residence, for a stated term of years at a rate of interest which does not vary for the duration of the loan, forms part of the trade of the employer, and

(III) the rate of interest at which, in the course of the employer's trade at the time the preferential loan is or was made, the employer makes or made loans at arm's length to persons, other than employees, for the purposes of purchasing a dwelling house for occupation by the borrower as a residence is less than 4 per cent per annum or such other rate (if any) prescribed by the Minister for Finance by regulations.

the first mentioned rate in subparagraph (III), or

(iii) in any other case, the rate of 10 per cent per annum or such other rate (if any) prescribed by the Minister for Finance by regulations.

Amendment of section 126 (tax treatment of certain benefits payable under Social Welfare Acts) of Principal Act.

16.— Section 126 of the Principal Act is amended by the substitution, in subsection (8), of the following for paragraph (b) (inserted by the Finance Act, 1999 ):

“(b) Notwithstanding subsection (3) and the Finance Act, 1992 (Commencement of Section 15) (Unemployment Benefit and Pay-Related Benefit) Order, 1994 ( S.I. No. 19 of 1994 ), subsection (3)(b) shall not apply in relation to unemployment benefit paid or payable in the period commencing on 6 April 1997, and ending on 5 April 2001, to a person employed in short-time employment.”.

Amendment of section 244 (relief for interest paid on certain home loans) of Principal Act.

17.— As respects the year of assessment 2000-2001 and subsequent years of assessment, section 244 of the Principal Act is amended—

(a) in subsection (1)—

(i) by the substitution of the following for the definition of “dependent relative”:

“‘dependent relative’, in relation to an individual, means any of the persons mentioned in paragraph (a) or (b) of the definition of ‘dependent relative’ in section 466(1) in respect of whom the individual is entitled to a reduction of tax under that section;”,

(ii) by the substitution of the following for the definition of “relievable interest”:

“‘relievable interest’, in relation to an individual and a year of assessment, means—

(i) in the case of—

(I) an individual assessed to tax for the year of assessment in accordance with section 1017, or

(II) a widowed individual,

the amount of qualifying interest paid by the individual in the year of assessment or, if less, £4,000,

(ii) in the case of any other individual, the amount of qualifying interest paid by the individual in the year of assessment or, if less, £2,000,

but, notwithstanding the preceding provisions of this definition and subject to paragraph (c), as respects the first 5 years of assessment for which there is an entitlement to relief under this section in respect of a qualifying loan, ‘relievable interest’, in relation to an individual and a year of assessment, shall mean—

(iii) in the case of—

(I) an individual assessed to tax for the year of assessment in accordance with section 1017, or

(II) a widowed individual,

the amount of qualifying interest paid by the individual in the year of assessment or, if less, £5,000,

(iv) in the case of any other individual, the amount of qualifying interest paid by the individual in the year of assessment or, if less, £2,500;”,

and

(iii) by the substitution of the following for paragraph (c):

“(c) The number of years of assessment for which the amount of relievable interest is to be determined by reference to subparagraph (iii) or (iv) of the definition of ‘relievable interest’ shall be reduced by one year of assessment for each year of assessment in which an individual was entitled to relief for a year of assessment before the year 1997-1998 under section 76(1) or 496 of, or paragraph 1(2) of Part III of Schedule 6 to, the Income Tax Act, 1967.”,

and

(b) in subsection (3), by the substitution of the following for paragraph (a):

“(a) Where the amount of relievable interest is determined by reference to subparagraph (iii) or (iv) of the definition of ‘relievable interest’, then, notwithstanding any other provision of the Tax Acts, in the case of an individual who has elected or could be deemed to have duly elected to be assessed to tax for the year of assessment in accordance with section 1017, where either—

(i) the individual, or

(ii) the individual's spouse,

was previously entitled to relief under this section or under section 76(1) or 496 of, or paragraph 1(2) of Part III of Schedule 6 to, the Income Tax Act, 1967, and the other person was not so entitled—

(I) the relief to be given under this section, other than that part of the relief (in this subsection referred to as ‘the additional relief’) which is represented by the difference between the relievable interest and the amount which would have been the amount of the relievable interest if this had been determined by reference to subparagraph (i) or (ii) of that definition, shall be treated as given in equal proportions to the individual and that individual's spouse for that year of assessment, and

(II) the additional relief shall be reduced by 50 per cent and the additional relief, as so reduced, shall be given only to the person who was not previously entitled to relief under this section or under section 76(1) or 496 of, or paragraph 1(2) of Part III of Schedule 6 to, the Income Tax Act, 1967.”.

Amendment of section 202 (relief for agreed pay restructuring) of Principal Act.

18.—(1) Section 202 of the Principal Act is amended—

(a) in subsection (1) (a), by the substitution of the following for the definition of “specified amount”:

“‘specified amount’, in relation to a participating employee, means—

(a) in a case where the basic pay of the employee is subject to a reduction of at least 10 per cent but not exceeding 15 per cent, £6,000 together with £200 for each complete year of service (subject to a maximum of 20 years), up to the relevant date, of the employee in the service of the qualifying company,

(b) in a case where the basic pay of the employee is subject to a reduction exceeding 15 per cent but not exceeding 20 per cent, £6,000 together with £500 for each complete year of service (subject to a maximum of 20 years), up to the relevant date, of the employee in the service of the qualifying company, and

(c) in a case where the basic pay of the employee is subject to a reduction exceeding 20 per cent, £8,000 together with £600 for each complete year of service (subject to a maximum of 20 years), up to the relevant date, of the employee in the service of the qualifying company.”,

and

(b) in subsection (2), by the substitution in paragraph (g) of “6 April 2003” for “the 6th day of April, 2000”.

(2) Paragraph (a) of subsection (1) shall apply and have effect as respects payments made under a relevant agreement (within the meaning of section 202 of the Principal Act) the relevant date (within that meaning) of which is after 20 July 1999.

Amendment of Part 16 (income tax relief for investment in corporate trades — business expansion scheme and seed capital scheme) of Principal Act.

19.—(1) Part 16 of the Principal Act is amended—

(a) in section 488(1) by the insertion of the following after the definition of “eligible shares”:

“‘Exchange Axess’ means the company incorporated under the Companies Acts, 1963 to 1999, on 19 July 1999 as Exchange Axess Limited;”,

(b) in section 491 by the substitution, in subsection (4), of the following for the words after “by reason only of the fact” to the end of the subsection:

“that—

(I) a subscription for eligible shares in both companies is made by a person or persons having the management of an investment fund designated under section 508 as nominee for any person or group or groups of persons, or

(II) both companies hold shares or securities in, or have made loans to, Exchange Axess or carry on in limited partnership with Exchange Axess such qualifying trading operations as are referred to in section 496(2) (a) (iv).”,

and

(c) in section 495(3) (a) (ii)—

(i) by the substitution, in clause (I), of “company,” for “company, or”,

(ii) by the substitution, in clause (II), of “trades, or” for “trades.”, and

(iii) by the insertion, after clause (II), of the following:

“(III) both the holding of shares or securities in, or the making of loans to, Exchange Axess, and the carrying on in limited partnership with Exchange Axess of such qualifying trading operations as are referred to in section 496(2)(a)(iv).”.

(2) Subsection (1) shall apply and have effect as on and from 1 May 1998.

Amendment of Schedule 13 (accountable persons for purposes of Chapter 1 of Part 18) to Principal Act.

20.— Schedule 13 to the Principal Act is amended by—

(a) the deletion of paragraphs 43 and 85,

(b) the substitution of the following for paragraph 92:

“92. A Referendum Commission established by order made under section 2(1) of the Referendum Act, 1998 .”,

and

(c) the addition of the following after paragraph 95:

“96. The Central Fisheries Board.

97. A regional fisheries board established by virtue of an order made under section 10 of the Fisheries Act, 1980 .

98. A County Enterprise Board (being a board referred to in the Schedule to the Industrial Development Act, 1995 ).

99. Western Development Commission.

100. The Equality Authority.

101. Commissioners of Charitable Donations and Bequests for Ireland.

102. Commission for Electricity Regulation.

103. A regional authority established by an order made under section 43(1) of the Local Government Act, 1991 .”.

Relief for postgraduate and certain third-level fees.

21.— (1) As respects the year of assessment 2000-2001 and subsequent years of assessment, Part 15 of the Principal Act is amended in Chapter 1—

(a) by the insertion of the following section after section 475:

(b) in section 474, by the insertion after subsection (2) of the following subsection:

“(2A) In the case of an individual who is a married person assessed to tax for a year of assessment in accordance with section 1017, any payment in respect of qualifying fees made by the individual's spouse shall, except where section 1023 applies, be deemed to have been made by the individual.”,

(c) in section 474A, by the insertion after subsection (2) of the following subsection:

“(2A) In the case of an individual who is a married person assessed to tax for a year of assessment in accordance with section 1017, any payment in respect of qualifying fees made by the individual's spouse shall, except where section 1023 applies, be deemed to have been made by the individual.”,

(d) in section 475—

(i) in subsection (1), by the insertion after the definition of “approved course” of the following definition:

“‘dependant’, in relation to a qualifying individual, means a spouse or child of the qualifying individual or a person in respect of whom the qualifying individual is or was the legal guardian;”, and

(ii) by the substitution of the following for subsections (2) and (3):

“(2) Subject to this section, where for a year of assessment a qualifying individual proves that he or she has, on his or her own behalf or on behalf of his or her dependant, made a payment in respect of qualifying fees in respect of an approved course for the academic year in relation to that course commencing in that year of assessment, the income tax to be charged on the qualifying individual for that year of assessment, other than in accordance with section 16(2), shall be reduced by an amount which is the lesser of—

(a) the amount equal to the appropriate percentage of the aggregate of all such payments proved to be so made, and

(b) the amount which reduces that income tax to nil.

(3) In the case of a qualifying individual who is a married person assessed to tax for a year of assessment in accordance with section 1017, any payment in respect of qualifying fees made by the qualifying individual's spouse shall, except where section 1023 applies, be deemed to have been made by the qualifying individual.”,

(e) in section 476—

(i) in subsection (1)—

(I) by the insertion after the definition of “An Foras” of the following definition:

“‘appropriate percentage’ means, in relation to a year of assessment, a percentage equal to the standard rate of tax for that year;”, and

(II) by the insertion after the definition of “certificate of competence” of the following definition:

“‘dependant’ means, in relation to an individual, a spouse or child of the individual or a person in respect of whom the individual is or was the legal guardian;”,

and

(ii) by the substitution of the following for subsections (2) and (3):

“(2) Subject to this section, where an individual proves that—

(a) he or she has, on his or her own behalf or on behalf of his or her dependant, made a payment in respect of qualifying fees in respect of an approved course, and

(b) the individual in respect of whom the fees are paid has been awarded a certificate of competence in respect of that course,

the income tax to be charged on the individual, other than in accordance with section 16(2), for the year of assessment in which that certificate of competence is awarded shall be reduced by an amount which is the lesser of—

(i) the amount equal to the appropriate percentage of the aggregate of all such payments proved to be so made, and

(ii) the amount which reduces that income tax to nil.

(3) In the case of an individual who is a married person assessed to tax for a year of assessment in accordance with section 1017, any payment in respect of qualifying fees made by the individual's spouse shall, except where section 1023 applies, be deemed to have been made by the individual.”,

and

(f) in the Table to section 458, by the insertion, in Part 2, after “Section 475” of “Section 475A”.

(2) Section 1024 of the Principal Act is amended, as respects the year of assessment 2000-2001 and subsequent years of assessment, by the substitution in subsection (2)(a)(ix) of “475, 475A, 476” for “475, 476”.

Amendment of section 767 (payment to universities and other approved bodies for research in, or teaching of, approved subjects) of Principal Act.

22.— Section 767 of the Principal Act is amended—

(a) in subsection (1), by the substitution of the following for the definition of “approved body”:

“‘approved body’ means—

(a) the National College of Ireland,

(b) an institution comprising the Dublin Institute of Technology established by or under section 3 of the Dublin Institute of Technology Act, 1992 , or

(c) an educational institution established by or under section 3 of the Regional Technical Colleges Act, 1992 , as a regional technical college;”,

and

(b) by the insertion of the following after subsection (2):

“(3) (a) Subsection (2) shall also apply to any sum paid to a body of persons or a trust established in the State for the sole purpose of granting financial or other aid to—

(i) an Irish university, or

(ii) an approved body,

for the purpose of enabling the university or the approved body to undertake research in, or engage in the teaching of, an approved subject.

(b) This subsection shall apply and have effect as respects a chargeable period (within the meaning of section 321) being—

(i) where the chargeable period is a year of assessment, the year 2000-2001, and any subsequent year of assessment, or

(ii) where the chargeable period is an accounting period of a company, an accounting period ending on or after 6 April 2001.”.

Amendment of Part 30 (occupational pension schemes, retirement annuities, purchased life annuities and certain pensions) of Principal Act.

23.—(1) Part 30 of the Principal Act is amended—

(a) in section 770(1)—

(i) by the insertion. before the definition of “administrator”, of the following definition:

“ ‘additional voluntary contributions’ means voluntary contributions made to a scheme by an employee which are—

(i) contributions made under a rule or part of a rule, as the case may be, of a retirement benefits scheme (in this definition referred to as the ‘main scheme’) which provides specifically for the payment of members' voluntary contributions, other than contributions made at the rate or rates specified for members' contributions in the rules of the main scheme, or

(ii) contributions made under a separately arranged scheme for members' voluntary contributions which is associated with the main scheme;”,

and

(ii) by the substitution, in the definition of “proprietary director”, of “5 per cent” for “20 per cent”,

(b) in section 772—

(i) by the substitution of the following for paragraph (a) of subsection (3A):

“(a) The Revenue Commissioners shall not approve a retirement benefits scheme for the purposes of this Chapter unless it appears to them that the scheme provides for any individual entitled to a pension under the scheme who is—

(i) a proprietary director of a company to which the scheme relates, or

(ii) an individual entitled to rights arising from additional voluntary contributions to the scheme,

to opt, on or before the date on which that pension would otherwise become payable, for the transfer, on or after that date, to—

(I) the individual, or

(II) an approved retirement fund, of an amount equivalent to the amount determined by the formula—

A - B

where—

A is—

(i) in the case of a proprietary director, the amount equal to the value of the individual's accrued rights under the scheme exclusive of any lump sum paid in accordance with subsection (3)(f), and

(ii) in the case of any other individual, the amount equal to the value of the individual's accrued rights under the scheme which relate to additional voluntary contributions paid by that individual exclusive of any part of that amount paid by way of lump sum in accordance with subsection (3) (f) in conjunction with the scheme rules, and

B is the amount or value of assets which the trustees, administrators or other person charged with the management of the scheme (in this section referred to as ‘the trustees’) would, if the assumptions in paragraph (b) were made, be required, in accordance with section 784C, to transfer to an approved minimum retire ment fund held in the name of the individual or to apply in purchasing an annuity payable to the individual with effect from the date of the exercise of the said option.”,

(ii) by the substitution of the following for subparagraph (i) of paragraph (b) of subsection (3A):

“(i) that the retirement benefits scheme or, as the case may be, the relevant part of the scheme was an annuity contract approved in accordance with section 784,”,

(iii) in subsection (3B)—

(I) by the deletion of subparagraph (iii) of paragraph (a), and

(II) by the insertion, in paragraph (b), of “in the case of a proprietary director,” before “paragraph (f)”, and

(iv) by the insertion of the following subsection after subsection (3B):

“(3C) Where the rules of a retirement benefits scheme provide for the purchase of an annuity from a company carrying on the business of granting annuities on human life, references in subsection (3A) to the date on which a pension would otherwise become payable shall, in relation to that retirement benefits scheme, be construed as references to the latest date on which such an annuity must be purchased in accordance with those rules.”,

(c) in section 784, by the substitution of the following for subsection (2B):

“(2B) (a) Where an individual opts in accordance with subsection (2A), any amount paid to the individual by virtue of that subsection, other than an amount payable by virtue of paragraph (b) of subsection (2), shall be regarded as a payment of emoluments to which Schedule E applies and, accordingly, the provisions of Chapter 4 of Part 42 shall, subject to paragraph (b), apply to any such payment.

(b) The person making a payment to which paragraph (a) refers shall deduct tax from the payment at the higher rate for the year of assessment in which the payment is made unless that person has received from the Revenue Commissioners a certificate of tax free allowances or a tax deduction card for that year in respect of the individual beneficially entitled to the payment.”,

(d) in section 784A—

(i) in the definition of “qualifying fund manager” in subsection (1)—

(I) by the substitution of the following for paragraph (a)—

“(a) a person who is a holder of a licence granted under section 9 of the Central Bank Act, 1971 , or a person who holds a licence or other similar authorisation under the law of any other Member State of the European Communities which corresponds to a licence granted under that section,”,

(II) by the substitution of the following for paragraph (j):

“(j) the holder of—

(i) an authorisation issued by the Minister for Enterprise, Trade and Employment under the European Communities (Life Assurance) Framework Regulations of 1984 ( S.I. No. 57 of 1984 ) as amended, or

(ii) an authorisation granted by the authority charged by law with the duty of supervising the activities of insurance undertakings in a Member State other than the State in accordance with Article 6 of Directive No. 79/267/EEC¹ , who is carrying on the business of life assurance in the State, or

(iii) an official authorisation to undertake insurance in Iceland, Liechtenstein and Norway pursuant to the EEA Agreement within the meaning of the European Communities (Amendment) Act, 1993 , and who is carrying on the business of life assurance in the State,”,

and

(III) by the substitution of the following for paragraph (l):

“(l) a firm approved under section 10 of the Investment Intermediaries Act, 1995 , which is authorised to hold client money, other than a firm authorised as a Restricted Activity Investment Product Intermediary, where the firm's authorisation permits it to engage in the proposed activities, or a business firm which has been authorised to provide similar investment business services under the laws of a Member State of the European Communities which correspond to that Act;”,

(ii) by the insertion in subsection (1) of the following after paragraph (b):

“(c) Nothing in this Part shall be construed as authorising or permitting a person who is a qualifying fund manager to provide any services which that person would not otherwise be authorised or permitted to provide in the State.

(d) Any reference in this section to a distribution in relation to an approved retirement fund shall be construed as including any payment or transfer of assets out of the fund or any assignment of assets out of the fund, including a payment, transfer or assignment to the individual beneficially entitled to the assets, other than a payment, transfer or assignment to another approved retirement fund the beneficial owner of the assets in which is the individual who is beneficially entitled to the assets in the first-mentioned approved retirement fund, whether or not the payment, transfer or assignment is made to the said individual.”,

(iii) by the substitution of the following for subsections (2) to (7):

“(2) Subject to subsections (3) and (4), exemption from income tax and capital gains tax shall be allowed in respect of the income and chargeable gains arising in respect of assets held in an approved retirement fund.

(3) Subject to subsection (4)—

(a) the amount or value of any distribution by a qualifying fund manager in respect of assets held in an approved retirement fund shall be treated as a payment to the person beneficially entitled to the assets in the fund of emoluments to which Schedule E applies and, accordingly, the provisions of Chapter 4 of Part 42 shall apply to any such distribution, and

(b) the qualifying fund manager shall deduct tax from the distribution at the higher rate for the year of assessment in which the distribution is made unless the qualifying fund manager has received from the Revenue Commissioners a certificate of tax free allowances or a tax deduction card for that year in respect of the person referred to in paragraph (a).

(4) (a) Where the distribution referred to in subsection (3) is made following the death of the individual who was prior to death beneficially entitled to the assets of the approved retirement fund, the amount or value of the distribution shall be treated as the income of that individual for the year of assessment in which that individual dies and, subject to paragraph (b), subsection (3) shall apply accordingly.

(b) Subsection (3) shall not apply to a distribution made following the death of the individual who was prior to death beneficially entitled to the assets in an approved retirement fund where the distribution is made—

(i) to another such fund (hereafter in this subsection referred to as ‘the second-mentioned fund’) the beneficial owner of the assets in which is the spouse of the said individual, or

(ii) to, or for the sole benefit of, any child of the individual, or

(c) Where, in a case referred to in paragraph (b), the distribution is made—

(i) to a person who had attained the age of 21 years at the date of death of the individual beneficially entitled to the assets in the approved retirement fund, or

(ii) following the death of the beneficial owner of the second-mentioned fund, not being a distribution to or for the sole benefit of a child of that owner who at the time of death of that person had not attained the age of 21 years,

the qualifying fund manager shall deduct tax from the distribution at the standard rate of income tax in force at the time of the making of such a distribution, and—

(I) notwithstanding anything contained in any provision of the Income Tax Acts, the amount so charged to tax shall not be treated as income for any other purpose of those Acts, and

(II) the provisions of Chapter 4 of Part 42 and Regulations made in accordance with that Chapter shall, with any necessary modifications, apply to any deduction made under this subsection as if such a deduction were made in accordance with Regulation 25(2) (b) of the Income Tax (Employments) Regulations 1960 ( S.I. No. 28 of 1960 ).

(5) For the purposes of this section, Chapter 1 of Part 26 shall apply as if references in that Chapter to pension business were references to moneys held in an approved retirement fund.

(6) Notwithstanding Chapter 4 of Part 8, that Chapter shall apply to a deposit (within the meaning of that Chapter) where the deposit consists of money held by a qualifying fund manager in that capacity as if such a deposit were not a relevant deposit (within the meaning of that Chapter).

(7) (a) At any time when the qualifying fund manager—

(i) is not resident in the State, or

(ii) is not trading in the State through a fixed place of business,

the qualifying fund manager shall ensure that there is a person resident in the State and appointed by the qualifying fund manager to be responsible for the discharge of all duties and obligations relating to approved retirement funds which are imposed on the qualifying fund manager by virtue of this Chapter.

(b) A qualifying fund manager shall be liable to pay to the Collector-General income tax which the fund manager is required to deduct from any distribution by virtue of this Chapter and the individual beneficially entitled to assets held in an approved retirement fund, including the personal representatives of a deceased individual who was so entitled prior to that individual's death, shall allow such deduction; but where there are no funds or insufficient funds available out of which the qualifying fund manager may satisfy the tax required to be deducted, the amount of such tax for which there are insufficient funds available shall be a debt due to the qualifying fund manager from the individual beneficially entitled to the asset in the approved retirement fund or from the estate of the deceased individual, as the case may be.”,

(e) in section 784C—

(i) by the substitution of the following for subsection (7):

“(7) The provisions of section 784A shall, with any necessary modifications, apply to income and chargeable gains arising from, and to distributions in respect of assets, held in an approved minimum retirement fund as they apply to assets held in an approved retirement fund.”

and

(ii) by the deletion of subsections (8) and (9),

and

(f) by the deletion of section 784E.

(2) (a) Paragraph (b)(iv) of subsection (1) shall be deemed to have come into force and shall take effect as on and from 6 April 1999.

(b) Paragraphs (b) (iii) (I), (d) (iii), (e) and (f) of subsection (1) shall apply as regards an approved retirement fund or an approved minimum retirement fund, as the case may be, where the assets in the fund were first accepted into the fund by the qualifying fund manager on or after 6 April 2000.

(c) Subject to paragraphs (a) and (b), subsection (1) shall apply as on and from 6 April 2000.

(d) Notwithstanding the provisions of Part 30 of the Principal Act, a retirement benefits scheme which was approved by the Revenue Commissioners before 6 April 2000 shall not cease to be an approved scheme because the rules of the scheme are altered on or after that date to enable an individual to whom the scheme applies to exercise an option under subsection (3A) (as amended by this Act) of section 772 of the Principal Act, which that individual would be in a position to exercise in accordance with the terms of that subsection as regards a scheme approved on or after 6 April 2000 and, as regards such a scheme, the provisions of this section shall apply as if the scheme were one approved on or after that date.

Amendment of section 515 (excess or unauthorised shares) of Principal Act.

24.—Section 515 of the Principal Act is amended—

(a) in subsection (2A)(b) (inserted by the Finance Act, 1999 ) by the deletion of “5 years” and the substitution of “period of 5 years, or such lesser period as the Minister for Finance may be order prescribe,”, and

(b) by the insertion after subsection (7) of the following:

“(8) Where an order is proposed to be made under subsection (2A)(b), a draft of the order shall be laid before Dáil Éireann, and the order shall not be made until a resolution approving of the draft has been passed by Dáil Éireann.”.

Amendment of Schedule 11 (profit sharing schemes) to Principal Act.

25.—Schedule 11 to the Principal Act is amended by the insertion after paragraph 13 of the following:

“13A.—(1) Notwithstanding paragraph 13, an individual who has had shares appropriated to him or her in a year of assessment under an approved scheme established by a company (‘the first-mentioned company’) shall, subject to subparagraph (2), be entitled to have shares appropriated to him or her in that year of assessment under an approved scheme established by another company (‘the second-mentioned company’) if, in that year of assessment, the second-mentioned company acquires control, or is part of a consortium that acquires ownership, of the first-mentioned company under a scheme of reconstruction or amalgamation (within the meaning of section 587).

(2) Section 515 and paragraph 3(4) shall, subject to any necessary modification, apply as if the first-mentioned company and the second-mentioned company were the same company.

(3) This paragraph shall apply to an appropriation of shares made, on or after the date of the passing of the Finance Act, 2000, by the trustees of an approved scheme (within the meaning of section 510(1)).”.

Amendment of Schedule 12 (employee share ownership trusts) to Principal Act.

26.—Schedule 12 to the Principal Act is amended in paragraph 11—

(a) by the substitution for subparagraph (2B)(d) (inserted by the Finance Act, 1999 ) of the following:

“(d) at each given time—

(i) in the case of an employee share ownership trust approved under paragraph 2 before the passing of the Finance Act, 2000, in the 5 year period referred to in clause (b), and

(ii) in the case of an employee share ownership trust approved under paragraph 2 on or after the passing of the Finance Act, 2000, in the 5 year period, or such lesser period as the Minister for Finance may by order prescribe, commencing on the date referred to in clause (b),

50 per cent, or such lesser percentage as the Minister for Finance may by order prescribe, of the securities retained by the trustees at that time were pledged by them as security for borrowings, and”,

and

(b) by the insertion after subparagraph(9) of the following:

“(10) Where an order is proposed to be made under subparagraph (2B)(d), a draft of the order shall be laid before Dáil Éireann, and the order shall not be made until a resolution approving of the draft has been passed by Dáil Éireann.”.

Rights to acquire shares or other assets.

27.—The Principal Act is amended—

(a) in section 128—

(i) by the insertion after subsection (2) of the following:

“(2A) Notwithstanding any other provision of the Tax Acts, where a person is, by virtue of this section, chargeable to tax under Schedule E for a year of assessment in respect of an amount equal to the gain realised from the exercise, assignment or release of a right, he or she shall be a chargeable person for that year for the purposes of Part 41, unless—

(a) that amount is deducted in determining the amount of his or her tax-free allowances for that year by virtue of regulation 10(1)(b) of the Income Tax (Employments) Regulations, 1960 ( S.I. No. 28 of 1960 ), or

(b) the person has been exempted by an inspector from the requirements of section 951 by reason of a notice given under subsection (6) of that section.”,

(ii) by the substitution in subsection (11) of “30 June in the year of assessment following” for “30 days after the end of”, and

(iii) by the insertion after subsection (11) of the following:

“(11A) Where in relation to any right—

(a) the person referred to in subsection (11) is resident in a territory other than the State, and

(b) the person who obtains that right is a director or an employee of a company which is resident in the State,

the provisions of subsection (11) shall also apply to that company.”,

(b) by the insertion after section 128 of the following:

and

(c) in Schedule 29—

(i) by the deletion in column 2 of “section 128(11)”, and

(ii) by the insertion in column 3 after “section 127(5)” of “section 128(11) and (11A)”.

Amendment of Chapter 4 (interest payments by certain deposit takers) of Part 8 of Principal Act.

28.—(1) Section 256 of the Principal Act is amended in subsection (1) by the substitution for the definition of “appropriate tax” of the following:

“ ‘appropriate tax’, in relation to a payment of relevant interest, means a sum representing income tax on the amount of the payment—

(a) in the case of a relevant deposit or relevant deposits held in a special savings account, at the rate of 20 per cent,

(b) in the case of a relevant deposit the interest in respect of which is payable annually or at more frequent intervals or a relevant deposit which is a specified deposit within the meaning of section 260, at the standard rate in force at the time of payment, and

(c) in the case of any other relevant deposit, being a deposit made on or after the date of the passing of the Finance Act, 2000, at a rate determined by the formula—

(S + 3) per cent

where S is the standard rate per cent (within the meaning of section 4(1)) in force at the time of payment;”.

(2) Section 261 of the Principal Act is amended by the substitution for subparagraph (i) of paragraph (c) of the following:

“(i) the amount of any payment of relevant interest shall be regarded as income chargeable to tax under Case IV of Schedule D, and under no other Case or Schedule, and shall be taken into account in computing the total income of the person entitled to that amount, but, in relation to such a person (being an individual)—

(I) except for the purposes of a claim to repayment under section 267(3), the specified amount within the meaning of section 187 or 188 shall, as respects the year of assessment for which he or she is to be charged to income tax in respect of the relevant interest, be increased by the amount of that payment,

(II) the part of taxable income on which he or she is charged to income tax at the standard rate for that year shall be increased by the part of such relevant interest which comes within paragraph (b) or the definition of ‘appropriate tax’ in section 256(1), and

(III) as respects any part of relevant interest which comes within paragraph (c) of the definition of ‘appropriate tax’ in section 256(1), the person shall be chargeable to tax at the rate at which tax was deducted from that relevant interest,

and”.

Extension of section 1022 (special provisions relating to tax on wife's income) of Principal Act to spouse's income, etc.

29.—(1) Section 1022 of the Principal Act is amended by—

(a) the substitution for subsection (1) of the following:

“(1) Where—

(a) an assessment to income tax (in this section referred to as the ‘original assessment’) has been made for any year of assessment on an individual, or on an individual's trustee, guardian or committee (in this section referred to as the ‘representative’), or on an individual's executors or administrators,

(b) the Revenue Commissioners are of the opinion that, if an application for separate assessment under section 1023 had been in force with respect to that year of assessment, an assessment in respect of or of part of the same income would have been made on, or on the representative of, or on the executors or administrators of, an individual who is the spouse of the individual referred to in paragraph (a) or who was the spouse of the individual referred to in paragraph (a) (in this subsection and in subsection (2) referred to as the ‘spouse’) in that year of assessment, and

(c) the whole or part of the amount payable under the original assessment has remained unpaid at the expiration of 28 days from the time when it became due,

the Revenue Commissioners may give to the spouse, or, if the spouse is dead, to the spouse's executors or administrators, or, if an assessment referred to in paragraph (b) could in the circumstances referred to in that paragraph have been made on the spouse's representative, to the spouse, or to the spouse's representative, a notice stating—

(i) particulars of the original assessment and of the amount remaining unpaid under that assessment, and

(ii) to the best of their judgement, particulars of the assessment (in this subsection referred to as the ‘last-mentioned assessment’) which would have been so made,

and requiring the person to whom the notice is given to pay the lesser of—

(A) the amount which would have been payable under the last-mentioned assessment if it conformed with those particulars, and

(B) the amount remaining unpaid under the original assessment.”,

(b) the substitution in subsection (2) of “to the spouse or to the spouse's representative, or to the spouse's executors or administrators, as would have followed on the making on the spouse, or on the spouse's representative, or on the spouse's executors or administrators” for “to a woman, or to her trustee, guardian or committee, or to her executors or administrators, as would have followed on the making on her, or on her trustee, guardian or committee, or on her executors or administrators”,

(c) the substitution for subsection (6) of the following:

“(6) Where a husband or a wife dies (in this subsection and subsections (7) and (8) referred to as the ‘deceased spouse') and at any time before the death the husband and wife were living together, then the other spouse or, if the other spouse is dead, the executors or administrators of the other spouse may, not later than 2 months from the date of the grant of probate or letters of administration in respect of the deceased spouse's estate or, with the consent of the deceased spouse's executors or administrators, at any later date, give to the deceased spouse's executors or administrators and to the inspector a notice in writing declaring that, to the extent permitted by this section, the other spouse or the executors or administrators of the other spouse disclaim responsibility for unpaid income tax in respect of all income of the deceased spouse for any year of assessment or part of a year of assessment, being a year of assessment or a part of a year of assessment for which any income of the deceased spouse was deemed to be the income of the other spouse and in respect of which the other spouse was assessed to tax under section 1017 or under that section as modified by section 1019.”,

(d) the substitution in subsection (7) of “the deceased spouse's executors or administrators” for “the woman's executors or administrators”,

(e) the substitution in subsection (8) of “a deceased spouse's executors or administrators” for “a woman's executors or administrators”, and

(f) the insertion after subsection (8) of the following:

“(9) The Revenue Commissioners may nominate in writing any of their officers to perform any acts and discharge any functions authorised by this section to be performed or authorised by the Revenue Commissioners.”.

(2) (a) Paragraphs (a) to (e) of subsection (1) shall apply as respects assessments made on or after 10 February 2000.

(b) Paragraph (f) of subsection (1) shall apply as respects assessments made before, on or after 10 February 2000.

Chapter 3

Dividend Withholding Tax

Dividend withholding tax.

30.—(1) Chapter 8A (inserted by the Finance Act, 1999 ) of Part 6 of the Principal Act is amended—

(a) in section 172A(1)(a)—

(i) by the insertion of the following definition after the definition of “American depositary receipt”:

“ ‘approved body of persons’ has the same meaning as in section 235;”,

(ii) by the insertion of the following definition after the definition of “collective investment undertaking”:

“ ‘designated broker’ has the same meaning as in section 838;”,

and

(iii) by the insertion of the following definition after the definition of “relevant territory”:

“ ‘special portfolio investment account’ has the same meaning as in section 838;”,

(b) in section 172B—

(i) by the insertion of the following after subsection (4):

“(4A) (a) A company resident in the State shall keep and retain for the longer of the following periods—

(i) a period of 6 years, or

(ii) a period which, in relation to the relevant distributions in respect of which the declaration or notification is made or, as the case may be, given, ends not earlier than 3 years after the date on which the company has ceased to make relevant distributions to the person who made the declaration or, as the case may be, gave the notification to the company,

all declarations (and accompanying certificates) and notifications (not being a notice given to the company by the Revenue Commissioners) which are made or, as the case may be, given to the company in accordance with this Chapter and Schedule 2A.

(b) A company resident in the State shall, on being so required by notice in writing given to the company by the Revenue Commissioners, make available to the Commissioners, within the time specified in the notice—

(i) all declarations, certificates or notifications referred to in paragraph (a) which have been made or, as the case may be, given to the company, or

(ii) such class or classes of such declarations, certificates or notifications as may be specified in the notice.

(c) The Revenue Commissioners may examine or take extracts from or copies of any declarations, certificates or notifications made available to the Commissioners under paragraph (b).”,

(ii) by the substitution of the following for subsection (6):

“(6) This section shall not apply to a relevant distribution where section 831(5) applies in relation to that distribution.”,

and

(iii) by the addition of the following after subsection (6):

“(7) This section shall not apply where a relevant distribution is made by a company resident in the State and that distribution is—

(a) a distribution made out of exempt profits within the meaning of section 140,

(b) a distribution made out of disregarded income within the meaning of section 141 and to which subsection (3)(a) of that section applies, or

(c) a distribution made out of exempted income within the meaning of section 142.”,

(c) in section 172C—

(i) in subsection (2)—

(I) by the deletion in paragraph (d) of “or” and by the substitution in paragraph (e)(ii) of “Schedule 2A,” for “Schedule 2A.”, and

(II) by the addition of the following after paragraph (e):

“(f) an approved body of persons which—

(i) is entitled to exemption from income tax under Schedule F in respect of the relevant distribution by virtue of section 235(2), and

(ii) has made a declaration to the relevant person in relation to the relevant distribution in accordance with paragraph 7A of Schedule 2A,

or

(g) a designated broker who—

(i) is receiving the relevant distribution as all or part of the relevant income or gains (within the meaning of section 838) of a special portfolio investment account, and

(ii) has made a declaration to the relevant person in relation to the relevant distribution in accordance with paragraph 7B of Schedule 2A.”,

and

(ii) by the addition of the following after subsection (2):

“(3) For the purposes of subsection (2) and Schedule 2A—

(a) a collective investment undertaking which receives a relevant distribution, and

(b) a designated broker who receives a relevant distribution as all or part of the relevant income or gains (within the meaning of section 838) of a special portfolio investment account, shall be treated as being beneficially entitled to the relevant distribution.”,

(d) in section 172D—

(i) by the substitution in subsection (3) of the following for paragraph (b):

“(b) a company which is not resident in the State and—

(i) is, by virtue of the law of a relevant territory, resident for the purposes of tax in the relevant territory, but is not under the control, whether directly or indirectly, of a person or persons who is or are resident in the State,

(ii) is under the control, whether directly or indirectly, of a person or persons who, by virtue of the law of a relevant territory, is or are resident for the purposes of tax in the relevant territory and who is or are, as the case may be, not under the control, whether directly or indirectly, of a person who is, or persons who are, not so resident, or

(iii) the principal class of the shares of which, or—

(I) where the company is a 75 per cent subsidiary of another company, of that other company, or

(II) where the company is wholly-owned by 2 or more companies, of each of those companies,

is substantially and regularly traded on one or more than one recognised stock exchange in a relevant territory or territories or on such other stock exchange as may be approved of by the Minister for Finance for the purposes of this Chapter,

and which has made a declaration to the relevant person in relation to the relevant distribution in accordance with paragraph 9 of Schedule 2A and in relation to which declaration each of the certificates referred to in clause (i), the certificate referred to in clause (ii) or, as the case may be, the certificate referred to in clause (iii), of subparagraph (f) of that paragraph is a current certificate (within the meaning of paragraph 2 of that Schedule) at the time of the making of the relevant distribution.”,

(ii) by the insertion of the following after subsection (3):

“(3A) For the purposes of subsection (3)(b)(i), ‘control’ shall be construed in accordance with subsections (2) to (6) of section 432 as if in subsection (6) of that section for ‘5 or fewer participators’ there were substituted ‘persons resident in the State’.”,

(iii) by the substitution in subsection (4) of “subsection (3)(b)(ii)” for “subsection (3)(b)(i)” in each place where it occurs,

(iv) in subsection (5)—

(I) by the substitution of “subsection (3)(b)(iii)(I)” for “subsection (3)(b)(ii)(II)”, and

(II) by the deletion of “subparagraph (iii) of”,

and

(v) by the addition of the following after subsection (5):

“(6) For the purposes of subsection (3)(b)(iii)(II), a company (in this subsection referred to as an ‘aggregated 100 per cent subsidiary’) shall be treated as being wholly-owned by 2 or more companies (in this subsection referred to as the ‘joint parent companies’) if and so long as 100 per cent of its ordinary share capital is owned directly or indirectly by the joint parent companies, and for the purposes of this subsection—

(a) subsections (2) to (10) of section 9 shall apply as those subsections apply for the purposes of that section, and

(b) sections 412 to 418 shall apply with any necessary modifications as those sections would apply for the purposes of Chapter 5 of Part 12—

(i) if section 411(1)(c) were deleted, and

(ii) if the following subsection were substituted for subsection (1) of section 412:

‘(1) Notwithstanding that at any time a company is an aggregated 100 per cent subsidiary (within the meaning assigned by section 172D(6)) of the joint parent companies (within the meaning assigned by that section), it shall not be treated at that time as such a subsidiary unless additionally at that time—

(a) the joint parent companies are between them beneficially entitled to not less than 100 per cent of any profits available for distribution to equity holders of the company, and

(b) the joint parent companies would be beneficially entitled between them to not less than 100 per cent of any assets of the company available for distribution to its equity holders on a winding-up.'.”,

(e) in section 172E—

(i) in subsection (3)—

(I) by the substitution of the following for paragraphs (a) and (b):

“(a) to accept, and to retain for the longer of the following periods—

(i) a period of 6 years, or

(ii) a period which, in relation to the relevant distributions in respect of which the declaration or notification is made or, as the case may be, given, ends not earlier than 3 years after the date on which the intermediary has ceased to receive relevant distributions on behalf of the person who made the declaration or, as the case may be, gave the notification to the intermediary,

all declarations (and accompanying certificates) and notifications (not being a notice given to the intermediary by the Revenue Commissioners) which are made or, as the case may be, given to the intermediary in accordance with this Chapter and Schedule 2A,

(b) on being so required by notice in writing given to the intermediary by the Revenue Commissioners, to make available to the Commissioners, within the time specified in the notice—

(i) all declarations, certificates or notifications referred to in paragraph (a) which have been made or, as the case may be, given to the intermediary, or

(ii) such class or classes of such declarations, certificates or notifications as may be specified in the notice,”,

and

(II) by the substitution of the following for paragraph (f):

“(f) to provide to the Revenue Commissioners, not later than 3 months after the end of the first year of the operation of the agreement by the intermediary, a report on the intermediary's compliance with the agreement in that year, which report shall be signed by—

(i) if the intermediary is a company, the auditor of the company, or

(ii) if the intermediary is not a company, a person who, if the intermediary were a company, would be qualified to be appointed auditor of the company,

and thereafter, on being required by notice in writing given to the intermediary by the Revenue Commissioners, to provide to the Commissioners, within the time specified in the notice, a similar report in relation to such other period of the operation of the agreement by the intermediary as may be specified in the notice,”,

(ii) by the insertion of the following after subsection (3):

“(3A) The Revenue Commissioners may examine or take extracts from or copies of any declarations, certificates or notifications made available to the Commissioners under subsection (3)(b).”,

and

(iii) by the addition of the following after subsection (7):

“(8) Without prejudice to the operation of subsection (6), the authorisation by the Revenue Commissioners of an intermediary as a qualifying intermediary for the purposes of this Chapter shall cease to have effect on the day before the seventh anniversary of the date from which such authorisation applied; but this shall not prevent—

(a) the intermediary and the Revenue Commissioners from agreeing to renew the qualifying intermediary agreement entered into between them in accordance with subsection (3) or to enter into a further such agreement, and

(b) a further authorisation by the Revenue Commissioners of the intermediary as aqualifying intermediary for the purposes of this Chapter.”,

(f) in section 172F—

(i) in subsection (3)—

(I) by the substitution in paragraph (e) of “For the purposes of this section, but subject to paragraphs (g) and (h)” for “For the purposes of paragraph (d)”,

(II) by the substitution in paragraph (e)(v) of “by way of notice in writing or in electronic format” for “by way of notice in writing given in accordance with subsection (1)” and “Liable Fund, and” for “Liable Fund,”,

(III) by the substitution of the following for subparagraphs (vi) and (vii) of paragraph (e):

“(vi) enters into an agreement with the qualifying intermediary or further specified intermediary, as the case may be, under the terms of which it agrees that if and when required to comply with subsection (7A) it will do so.”,

and

(IV) by the addition of the following after paragraph (f):

“(g) Notwithstanding paragraph (e), where the Revenue Commissioners are satisfied that an intermediary, being a specified intermediary or other specified intermediary referred to in subsection (7A), has failed to comply with that subsection—

(i) the Commissioners may, by notice in writing given to the intermediary, notify it that it shall cease to be treated as a specified intermediary for the purposes of this section from such date as may be specified in the notice, and

(ii) notwithstanding any obligations as to secrecy or other restriction upon disclosure of information imposed by or under statute or otherwise, the Commissioners may make available to any qualifying intermediary (being a depositary bank holding shares in trust for, or on behalf of, the holders of American depositary receipts) or specified intermediary a copy of such notice.

(h) Where subsequently the Revenue Commissioners are satisfied that the intermediary has furnished the information required under subsection (7A) and will in future comply with that subsection if and when requested to do so, the Commissioners may, by further notice in writing given to the intermediary, revoke the notice given to the intermediary under paragraph (g) from such date as may be specified in the further notice, and a copy of that further notice shall be given to any person to whom a copy of the notice under paragraph (g) was given.”,

(ii) by the substitution of the following for subsection (7):

“(7) (a)  A qualifying intermediary shall, on being so required by notice in writing given to the qualifying intermediary by the Revenue Commissioners, make a return to the Commissioners, within the time specified in the notice (which shall not be less than 30 days) and as respects such year of assessment as may be specified in the notice (being the year of assessment 1999-2000 or any subsequent year of assessment), showing—

(i) the name and address of—

(I) each company resident in the State from which the qualifying intermediary received, on behalf of another person, a relevant distribution made by that company in the year of assessment to which the return refers, and

(II) each other person from whom the qualifying intermediary received, on behalf of another person, an amount or other asset representing a relevant distribution made by a company resident in the State in the year of assessment to which the return refers,

(ii) the amount of each such relevant distribution,

(iii) the name and address of each person to whom such a relevant distribution, or an amount or other asset representing such a relevant distribution, has been given by the qualifying intermediary, and

(iv) the name and address of each person referred to in subparagraph (iii) in respect of whom a declaration under section 172C(2) or 172D(3) has been received by the qualifying intermediary.

(b) A return required to be made by a qualifying intermediary under paragraph (a) may be confined to such class or classes of relevant distributions as may be specified in the notice given to the qualifying intermediary by the Revenue Commissioners under that paragraph.

(7A) (a) This subsection shall apply where a qualifying intermediary has been required to make a return to the Revenue Commissioners under subsection (7)(a) and a relevant distribution (or an amount or other asset representing a relevant distribution), the details of which are required to be included in that return, has been given by the qualifying intermediary to a specified intermediary.

(b) The qualifying intermediary shall, immediately on receipt of the notice referred to in subsection (7)(a), request the specified intermediary, by way of notice in writing or in electronic format, to notify the qualifying intermediary or the Revenue Commissioners of the name and address of each person to whom the specified intermediary gave such a distribution (or an amount or other asset representing such a distribution) and of the amount of each such distribution.

(c) The specified intermediary shall, within 21 days of the receipt of a notice under paragraph (b), furnish to the qualifying intermediary or, at the discretion of the specified intermediary, to the Revenue Commissioners, by way of notice in writing or in electronic format, the information required under that paragraph.

(d) Where the specified intermediary furnishes the information required under paragraph (b)—

(i) to the qualifying intermediary, the qualifying intermediary shall include that information in the return required to be made by it under subsection (7)(a), or

(ii) to the Revenue Commissioners, the specified intermediary shall, by way of notice in writing or in electronic format, immediately advise the qualifying intermediary of that factand the qualifying intermediary shall include in the return required to be made by it under subsection (7)(a) a statement to the effect that it has been so advised by the specified intermediary.

(e) If any person to whom a specified intermediary gave such a distribution (or an amount or other asset representing such a distribution) is another specified intermediary, the specified intermediary shall, immediately on the receipt of a notice under paragraph (b), request the other specified intermediary, by way of notice in writing or in electronic format, to notify the specified intermediary or the Revenue Commissioners of the name and address of each person to whom it gave such a distribution (or an amount or other asset representing such a distribution) and of the amount of each such distribution.

(f) The other specified intermediary shall, within 21 days of the receipt of a notice under paragraph (e), furnish to the specified intermediary or, at the discretion of the other specified intermediary, to the Revenue Commissioners, by way of notice in writing or in electronic format, the information required under that paragraph.

(g) Where the other specified intermediary furnishes the information required under paragraph (e)—

(i) to the specified intermediary, the specified intermediary shall, by way of notice in writing or in electronic format, immediately transmit that information to the person referred to in paragraph (d) (being the qualifying intermediary or the Revenue Commissioners, as the case may be) to whom it furnishes the information required under paragraph (b), and—

(I) if that person is the qualifying intermediary, the qualifying intermediary shall include that information in the return required to be made by it under subsection (7)(a), or

(II) if that person is the Revenue Commissioners, the specified intermediary shall, by way of notice in writing or in electronic format, immediately advise the qualifying intermediary of the fact that the informationrequired to be furnished by the other specified intermediary under paragraph (e) has been furnished to the specified intermediary and transmitted by the specified intermediary to the Revenue Commissioners in accordance with this paragraph and the qualifying intermediary shall include in the return to be made by it under subsection (7)(a) a statement to the effect that it has been so advised by the specified intermediary.

or

(ii) to the Revenue Commissioners, the other specified intermediary shall, by way of notice in writing or in electronic format, immediately advise the specified intermediary of that fact, the specified intermediary shall in turn, by way of similar notice, immediately advise the qualifying intermediary of that fact and the qualifying intermediary shall include in the return required to be made by it under subsection (7)(a) a statement to the effect that it has been so advised by the specified intermediary.

(h) Where, in accordance with this subsection, the specified intermediary or the other specified intermediary furnishes information to the Revenue Commissioners in electronic format, such format shall be agreed in advance with the Revenue Commissioners.”,

and

(iii) by the deletion in subsection (8) of “, not later than the 21st day of May following the year of assessment to which the return refers,”.

(g) in section 172G—

(i) in subsection (3)—

(I) by the substitution of the following for paragraphs (a) and (b):

“(a) to accept, and to retain for the longer of the following periods—

(i) a period of 6 years, or

(ii) a period which, in relation to the relevant distributions in respect of which the declaration or notification is made or, as the casemay be, given, ends not earlier than 3 years after the date on which the intermediary has ceased to receive relevant distributions on behalf of the person who made the declaration or, as the case may be, gave the notification to the intermediary,

all declarations (and accompanying certificates) and notifications (not being a notice given to the intermediary by the Revenue Commissioners) which are made or, as the case may be, given to the intermediary in accordance with this Chapter and Schedule 2A,

(b) on being so required by notice in writing given to the intermediary by the Revenue Commissioners, to make available to the Commissioners, within the time specified in the notice—

(i) all declarations, certificates or notifications referred to in paragraph (a) which have been made or, as the case may be, given to the intermediary, or

(ii) such class or classes of such declarations, certificates or notifications as may be specified in the notice,”,

and

(II) by the substitution of the following for paragraph (g):

“(g) to provide to the Revenue Commissioners, not later than 3 months after the end of the first year of the operation of the agreement by the intermediary, a report on the intermediary's compliance with the agreement in that year, which report shall be signed by—

(i) if the intermediary is a company, the auditor of the company, or

(ii) if the intermediary is not a company, a person who, if the intermediary were a company, would be qualified to be appointed auditor of the company,

and thereafter, on being required by notice in writing given to the intermediary by the Revenue Commissioners, to provide to the Commissioners, within the time specified in the notice, a similar report in relation to such other period of the operation of the agreement by the intermediary as may be specified in the notice,

and”,

(ii) by the insertion of the following after subsection (3):

“(3A) The Revenue Commissioners may examine or take extracts from or copies of any declarations, certificates or notifications made available to the Commissioners under subsection (3)(b).”,

and

(iii) by the addition of the following after subsection (7):

“(8) Without prejudice to the operation of subsection (6), the authorisation by the Revenue Commissioners of an intermediary as an authorised withholding agent for the purposes of this Chapter shall cease to have effect on the day before the seventh anniversary of the date from which such authorisation applied; but this shall not prevent—

(a) the intermediary and the Revenue Commissioners from agreeing to renew the authorised withholding agent agreement entered into between them in accordance with subsection (3) or to enter into a further such agreement, and

(b) a further authorisation by the Revenue Commissioners of the intermediary as an authorised withholding agent for the purposes of this Chapter.”,

(h) in section 172K(1)—

(i) by the deletion in paragraph (f) of “and” and by the substitution in paragraph (g) of “refers, and” for “refers.”, and

(ii) by the addition of the following after paragraph (g):

“(h) in a case where section 172B has not applied to a relevant distribution by virtue of the operation of subsection (7) of that section, whether the relevant distribution is a distribution within paragraph (a), (b) or (c) of that subsection.”,

and

(i) by the insertion of the following section after section 172L:

(2) Schedule 2A (inserted by the Finance Act, 1999 ) is amended—

(a) by the substitution in paragraph 2 of “paragraph 8(f) or 9(f)” for “paragraph 8(f) or subparagraph (f) or (g) of paragraph 9”,

(b) by the insertion of the following after paragraph 7:

“Declaration to be made by approved athletic or amateur sports body

7A. The declaration referred to in section 172C(2)(f)(ii) shall be a declaration in writing to the relevent person which—

(a) is made by the person (in this paragraph referred to as ‘the declarer’) beneficially entitled to the relevant distributions in respect of which the declaration is made,

(b) is signed by the declarer,

(c) is made in such form as may be prescribed or authorised by the Revenue Commissioners,

(d) declares that, at the time when the declaration is made, the person beneficially entitled to the relevant distribution is a person referred to in section 172C(2)(f)(i),

(e) contains the name and address of the person,

(f) contains a statement that, at the time when the declaration is made, the relevant distributions in respect of which the declaration is made will be applied for the sole purpose of promoting athletic or amateur games or sports and are so treated by the Revenue Commissioners,

(g) contains an undertaking by the declarer that, if the person mentioned in subparagraph (d) ceases to be an excluded person, the declarer will, by notice in writing, advise the relevant person in relation to the relevant distributions accordingly, and

(h) contains such other information as the Revenue Commissioners may reasonably require for the purposes of Chapter 8A of Part 6.

Declaration to be made by designated stockbroker operating special portfolio investment account

7B. The declaration referred to in section 172C(2)(g)(ii) shall be a declaration in writing to the relevant person which—

(a) is made by the person (in this paragraph referred to as ‘the declarer’) beneficially entitled to the relevant distributions in respect of which the declaration is made,

(b) is signed by the declarer,

(c) is made in such form as may be prescribed or authorised by the Revenue Commissioners,

(d) declares that, at the time when the declaration is made, the person beneficially entitled to the relevant distribution is a person referred to in section 172C(2)(g)(i),

(e) contains the name and tax reference number of the person,

(f) contains a statement that, at the time when the declaration is made, the relevant distributions in respect of which the declaration is made will be applied as all or part of the relevant income or gains (within the meaning of section 838) of a special portfolio investment account and are so treated by the Revenue Commissioners,

(g) contains an undertaking by the declarer that, if the person mentioned in subparagraph (d) ceases to be an excluded person, the declarer will, by notice in writing, advise the relevant person in relation to the relevant distributions accordingly, and

(h) contains such other information as the Revenue Commissioners may reasonably require for the purposes of Chapter 8A of Part 6.”,

(c) by the substitution in paragraph 8(g) of the following for clause (ii):

“(ii) a notice in writing from the Revenue Commissioners stating that the Commissioners have noted the contents of the certificate referred to in clause (i),”,

and

(d) in paragraph 9—

(i) by the substitution of the following for subparagraph (f):

“(f) is accompanied by—

(i) a certificate given by the tax authority of the relevant territory in which the company is, by virtue of the law of that territory, resident for the purposes of tax certifying that the company is so resident in that territory, and a certificate signed by the auditor of the company certifying that in his or her opinion the company is not under the control (within the meaning of section 172D(3A)), whether directly or indirectly, of a person or persons who is or are resident in the State,

(ii) a certificate signed by the auditor of the company certifying that in his or her opinion the company is a company which is not resident in the State and is under the control (within the meaning of section 172D(4)(a)), whether directly or indirectly, of a person or persons who, by virtue of the law of a relevant territory, is or are resident for the purposes of tax in such a relevant territory and who is or are, as the case may be, not under the control (within the meaning of section 172D(4)(b)), whether directly or indirectly, of a person who is, or persons who are, not so resident, or

(iii) a certificate signed by the auditor of the company certifying that in his or her opinion the principal class of the shares of the company or—

(I) where the company is a 75 per cent subsidiary (within the meaning of section 172D(5)) of another company, of that other company, or

(II) where the company is wholly-owned (within the meaning of section 172D(6)) by 2 or more companies, of each of those companies,

is substantially and regularly traded on one or more than one recognised stock exchange in a relevant territory or territories or on such other stock exchange as may be approved of by the Minister for Finance for the purposes of Chapter 8A of Part 6,”,

and

(ii) by the deletion of subparagraph (g).

(3) Subsection (1) (i) shall apply as on and from 10 February 2000.

Amendment of section 153 (distributions to certain non-residents) of Principal Act.

31.—As respects distributions made on or after 6 April 2000, section 153 (as amended by the Finance Act, 1999 ) of the Principal Act is amended—

(a) in subsection (1), by the substitution of the following definition for the definition of “non-resident person”:

“ ‘qualifying non-resident person’, in relation to a distribution, means the person beneficially entitled to the distribution, being—

(a) a person, other than a company, who—

(i) is neither resident nor ordinarily resident in the State, and

(ii) is, by virtue of the law of a relevant territory, resident for the purposes of tax in the relevant territory,

or

(b) a company which is not resident in the State and—

(i) is, by virtue of the law of a relevant territory, resident for the purposes of tax in the relevant territory, but is not under the control, whether directly or indirectly, of a person or persons who is or are resident in the State,

(ii) is under the control, whether directly or indirectly, of a person or persons who, by virtue of the law of a relevant territory, is or are resident for the purposes of tax in the relevant territory and who is or are, as the case may be, not under the control, whether directly or indirectly, of a person who is, or persons who are, not so resident, or

(iii) the principal class of the shares of which, or—

(I) where the company is a 75 per cent subsidiary of another company, of that other company, or

(II) where the company is wholly-owned by 2 or more companies, of each of those companies,

is substantially and regularly traded on one or more than one recognised stock exchange in a relevant territory or territories or on such other stock exchange as may be approved of by the Minister for Finance for the purposes of this section;”,

(b) by the insertion of the following subsection after subsection (1):

“(1A) For the purposes of paragraph (b)(i) of the definition of ‘qualifying non-resident person’, ‘control’ shall be construed in accordance with subsections (2) to (6) of section 432 as if in subsection (6) of that section for ‘5 or fewer participators’ there were substituted ‘persons resident in the State’.”,

(c) in subsection (2), by the substitution of “paragraph (b)(ii) of the definition of ‘qualifying non-resident person’ ” for “paragraph (b)(i) of the definition of ‘non-resident person’ ”,

(d) in subsection (3)—

(i) by the substitution of “paragraph (b)(iii)(I) of the definition of qualifying non-resident person’ ” for “paragraph (b)(ii)(II) of the definition of ‘non-resident person’ ”, and

(ii) by the deletion of “subparagraph (iii) of”,

(e) by the insertion of the following subsection after subsection (3):

“(3A) For the purposes of paragraph (b)(iii)(II) of the definition of ‘qualifying non-resident person’, a company (in this subsection referred to as an ‘aggregated 100 per cent subsidiary’) shall be treated as being wholly-owned by 2 or more companies (in this subsection referred to as the ‘joint parent companies’) if and so long as 100 per cent of its ordinary share capital is owned directly or indirectly by the joint parent companies, and for the purposes of this subsection—

(a) subsections (2) to (10) of section 9 shall apply as those subsections apply for the purposes of that section, and

(b) sections 412 to 418 shall apply with any necessary modifications as those sections would apply for the purposes of Chapter 5 of Part 12 if—

(i) section 411(1)(c) were deleted, and

(ii) the following subsection were substituted for subsection (1) of section 412:

‘(1) Notwithstanding that at any time a company is an aggregated 100 per cent subsidiary (within the meaning assigned by section 153(3A)) of the joint parent companies (within the meaning so assigned), it shall not be treated at that time as such a subsidiary unless additionally at that time—

(a) the joint parent companies are between them beneficially entitled to not less than 100 per cent of any profits available for distribution to equity holders of the company, and

(b) the joint parent companies would be beneficially entitled between them to not less than 100 per cent of any assets of the company available for distribution to its equity holders on a winding-up.’.”,

(f) in subsection (4), by the substitution of “qualifying non-resident person” for “non-resident person”, and

(g) by the addition of the following subsection after subsection (5):

“(6) Where for any year of assessment the income of a person, being an individual who for that year of assessment is neither resident nor ordinarily resident in the State but is not a qualifying non-resident person, includes an amount in respect of a distribution made by a company resident in the State, then—

(a) notwithstanding section 15(2), income tax shall not be chargeable in respect of that distribution at a rate in excess of the standard rate, and

(b) the amount or value of the distribution shall be treated for the purposes of sections 237 and 238 as not brought into charge to income tax.”.

Amendment of section 700 (special computational provisions) of Principal Act.

32.—(1) Section 700 of the Principal Act is amended by the insertion of the following subsection after subsection (1):

“(1A) For the purposes of subsection (1), ‘society’ shall include a credit union which is—

(a) registered as such under the Credit Union Act, 1997 , or

(b) deemed to be so registered by virtue of section 5(3) of that Act.”.

(2) This section shall be deemed to have come into operation as on and from 6 April 1999.

Amendment of section 831 (implementation of Council Directive No. 90/435/EEC concerning the common system of taxation applicable in the case of parent companies and subsidiaries of different Member States) of Principal Act.

33.—As respects distributions made on or after 6 April 2000, section 831 of the Principal Act is amended—

(a) in subsection (1)(a), by the substitution of the following definition for the definition of “company”:

“ ‘company’, other than in the expression ‘unlimited company’ in subsection (5A), means a company of a Member State;”,

and

(b) by the insertion of the following subsection after subsection (5) (inserted by the Finance Act, 1999 ):

“(5A) Subsection (5) shall apply to a distribution made by an unlimited company within the meaning of section 5(2)(c) of the Companies Act, 1963 , as it would apply if the unlimited company were a company of a Member State.”.

Chapter 4

Income Tax, Corporation Tax and Capital Gains Tax

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

34.—(1) Section 198 of the Principal Act is amended by the substitution for subsection (1) of the following:

“(1) (a) In this subsection—

‘arrangements’ means arrangements having the force of law by virtue of section 826;

‘relevant territory’ means—

(i) a Member State of the European Communities other than the State, or

(ii) not being such a Member State, a territory with the government of which arrangements have been made;

‘tax’, in relation to a relevant territory, means any tax imposed in that territory which corresponds to corporation tax in the State.

(b) For the purposes of this subsection, a company shall be regarded as being a resident of a relevant territory if—

(i) in a case where the relevant territory is a territory with the government of which arrangements have been made, the company is regarded as being a resident of that territory under those arrangements, and

(ii) in any other case, the company is by virtue of the law of the relevant territory resident for the purposes of tax in that territory.

(c) Notwithstanding any other provision of the Income Tax Acts but without prejudice to any charge under the Corporation Tax Acts on the profits of such a person—

(i) a company not resident in the State or a person not ordinarily resident in the State shall not be chargeable to income tax in respect of interest paid by—