S.I. No. 61/1988:

EUROPEAN COMMUNITIES (SPECIAL TRADING HOUSES) REGULATIONS, 1988.

EUROPEAN COMMUNITIES (SPECIAL TRADING HOUSES) REGULATIONS, 1988.

WHEREAS subsection (ICC2) (inserted by section 29 of the Finance Act, 1987 (No. 10 of 1987)) of section 39 of the Finance Act, 1980 (No. 14 of 1980), makes provision for the charging of corporation tax at the rate of 10 per cent. (referred to subsequently in these recitals as "the special rate of corporation tax") on the profits of Special Trading Houses within the meaning of that subsection (referred to subsequently in these recitals as "Special Trading Houses");

AND WHEREAS the said subsection (ICC2) has not been brought into effect;

AND WHEREAS the Government, in accordance with the provisions of paragraph (3) of Article 93 of the Treaty establishing the European Economic Community (referred to subsequently in these recitals as "the EEC Treaty") have informed the Commission of the European Communities (referred to subsequently in these recitals as "the Commission") of the proposal to charge the special rate of corporation tax on the profits of Special Trading Houses;

AND WHEREAS the Commission have initiated the procedure provided for in paragraph (2) of the said Article 93;

AND WHEREAS the Commission has been informed that, pursuant to the Finance Act, 1980 , the special rate of corporation tax is charged, for the purpose of promoting the economic development of the State by facilitating the manufacturing and marketing activities of all industrial undertakings, on the profits of manufacturing industries;

AND WHEREAS the Commission has been further informed that the provisions of the Finance Act, 1980 , in relation to the said special rate of corporation tax benefited fully only industrial undertakings of a size capable of organising all their manufacturing and marketing activities by themselves and that, accordingly, smaller industrial undertakings which, by reason of their size, were not capable of adequately marketing their products themselves were placed at a disadvantage;

AND WHEREAS the Government have agreed with the Commission that they will review the operation of the said subsection (ICC2) not later than 3 years after its coming into effect;

AND WHEREAS the Commission, by Commission Decision No. 01480 of 9 February, 1988, has approved of the charging of the special rate of corporation tax on the profits of Special Trading Houses pursuant to the said subsection (ICC2) if the operation of the subsection is limited to Special Trading Houses that market the products of industrial undertakings that employ less than 200 persons, thereby enabling smaller industrial undertakings to overcome the disadvantage hereinbefore referred to and assisting such undertakings to compete on more equal terms, in relation to the marketing of their products, with larger industrial undertakings;

AND WHEREAS it is therefore necessary, in order to enable the State to comply with its obligations under the EEC Treaty, to limit the operation of the said subsection (ICC2) in accordance with the said Decision of the Commission;

NOW I, ALBERT REYNOLDS, Minister for Industry and Commerce, in exercise of the powers conferred on me by section 3 of the European Communities Act, 1972 (No. 27 of 1972), and for the purpose of giving effect to Commission Decision No. 01480 of 9 February, 1988, hereby make the following Regulations:

1. (1) These Regulations may be cited as the European Communities (Special Trading Houses) Regulations, 1988.

(2) These Regulations shall come into operation on the 25th day of March, 1988.

2. Paragraph (a) of subsection (ICC2) (inserted by the Finance Act, 1987 (No. 10 of 1987)) of section 39 of the Finance Act, 1980 (No. 14 of 1980), is hereby amended by the insertion in the definition of "Special Trading House" after "export goods" of "manufactured by a firm which employs less than 200 persons".

GIVEN under my Official Seal, this 25th day of March, 1988.

ALBERT REYNOLDS.

EXPLANATORY NOTE.

This order amends the definition of "Special Trading House" as contained in the Finance Act, 1987 , to being a company which exists solely for the purpose of carrying on a trade which consists solely of the selling of export goods manufactured by a firm which employs less than 200 persons.