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6 1975

FINANCE ACT, 1975

Chapter V

Miscellaneous

Amendment of section 542 of Income Tax Act, 1967.

25. Section 542 of the Income Tax Act, 1967 , is hereby amended by the substitution for subsections (2) and (3) of the following subsection:

“(2) (a) Any notice, form or other document which under the Income Tax Acts is to be given, served, sent or delivered to or on a person by the Revenue Commissioners or by an inspector or other officer of the Revenue Commissioners may be either delivered to the person or left—

(i) in case the person is a company, at its registered office or place of business, or

(ii) in any other case, at the person's usual or last known place of abode or place of business or, if the person is an individual, at his place of employment.

(b) Any such notice, form or other document as is referred to in paragraph (a) may be served by post addressed—

(i) in case the person is a company, to it at either of the places specified in paragraph (a) (i), or

(ii) in any other case, to the person at any of the places specified in paragraph (a) (ii).

(c) Without prejudice to paragraphs (a) and (b) the provisions of section 379 of the Companies Act, 1963 , shall apply in relation to the service on a company of any such notice, form or other document as is referred to in this subsection as they apply in relation to the service of documents under the said section 379 on a company within the meaning of that Act.

(d) In this subsection ‘company’ means any body corporate.”.

Amendment of section 9 of Finance Act, 1968.

26. Section 9 of the Finance Act, 1968 , is hereby amended by the substitution for paragraph (b) of the following paragraph:

“(b) to tax recoverable by virtue of a notice under section 8 served after the 15th day of January, 1975, as if the tax were tax which the person was liable under the regulations to remit for the last income tax month of the year of assessment to which the notice relates.”.

Amendment of section 35 of Finance Act, 1973.

27. Section 35 of the Finance Act, 1973 , is hereby amended, as respects interest payable on or after the 12th day of February, 1975, by the insertion after paragraph (a) of the following paragraph:

“(aa) section 17 (6A) of the Finance Act, 1970 ,”.

Interest on unpaid taxes.

28. —(1) This section applies to interest chargeable under—

(a) section 14 of the Finance Act, 1962 ,

(b) section 129 of the Income Tax Act, 1967 ,

(c) section 550 of the said Income Tax Act, 1967 ,

(d) section 17 (6A) of the Finance Act, 1970 ,

(e) sections 20 (2) and 50 (2) of the Finance Act, 1971 , and

(f) section 21 of the Value-Added Tax Act, 1972 .

(2) Where any interest to which this section applies is chargeable for any month commencing on or after the 6th day of April, 1975, or any part of such a month, in respect of tax due to be paid or remitted whether before, on or after such date, such interest shall be chargeable at the rate of 1.5 per cent. for each month or part of a month instead of at the rate specified in the said sections and those sections shall have effect as if the rate aforesaid were substituted for the rates specified in those sections.

(3) In this section “tax” means income tax, sur-tax, corporation profits tax or value-added tax, as may be appropriate.

Adjustment of capital allowances by reference to value-added tax.

29. —(1) In computing any deduction, allowance or relief, for any of the purposes of—

(a) Parts XIII to XVIII, inclusive, of the Income Tax Act, 1967 ,

(b) section 22 of the Finance Act, 1971 ,

(c) the Finance (Taxation of Profits of Certain Mines) Act, 1974 , or

(d) section 22 of the Finance Act, 1974 ,

the cost to a person of any machinery or plant, or the amount of any expenditure incurred by him, shall not take account of any amount included in such cost or expenditure for value-added tax in respect of which the person may claim—

(i) a deduction under section 12 of the Value-Added Tax Act, 1972 , or

(ii) a refund of value-added tax under an order under section 20 (3) of that Act.

(2) In calculating, for any of the purposes of Part XVI of the Income Tax Act, 1967 , the amount of sale, insurance, salvage or compensation moneys to be taken into account in computing a balancing allowance or balancing charge to be made to or on a person, no account shall be taken of the amount of value-added tax (if any) chargeable to the person in respect of those moneys.

(3) Section 39 of the Value-Added Tax Act, 1972 , is hereby repealed.

Patent royalties: provisions supplemental to section 34 of Finance Act, 1973.

30. —(1) (a) Where a dividend is paid in part out of profits consisting of income disregarded by virtue of section 34 (2) of the Finance Act, 1973 (in this section referred to as disregarded income), and in part out of other profits, sections 456 and 457 of the Income Tax Act, 1967 , shall apply as if the dividend consisted of two dividends of which one is paid out of profits consisting of disregarded income and the other is paid out of other profits,

(b) so much of any dividend as is paid out of disregarded income shall not be regarded as income or profits for any purpose of the Income Tax Acts or of the enactments relating to corporation profits tax,

(c) in relation to every warrant, cheque or order drawn or made by a company for the payment of a dividend payable wholly or in part out of disregarded income, section 458 of the Income Tax Act, 1967 , shall apply to the company so that the statement required by that section shall show, in addition to the particulars required to be given apart from this section, either (as the case may require)—

(i) that the whole of the sum for which the warrant, cheque or order is drawn or made is a payment of a dividend out of disregarded income, or

(ii) that a part of such sum is a payment out of disregarded income and that a part (the gross amount of which, before any deduction in respect of income tax, is separately stated) of such sum is a payment out of other income.

(2) Where under section 456 of the Income Tax Act, 1967 , a body corporate is entitled to deduct tax from any dividend and the profits of the body corporate include a dividend all or part of which is not regarded as income by virtue of subsection (1) (b), so much of any dividend included in the profits of the body corporate as is not regarded as income shall be deemed for the purposes of this section to be profits representing disregarded income.

Relief in respect of increase in stock values.

31. —(1) In this section—

accounting period”, in relation to a company, means an accounting period determined in accordance with the provisions of section 54 of the Finance Act, 1920, which ends on a date in the period from the 6th day of April, 1973, to the 5th day of April, 1975;

company” means any body corporate resident in the State;

trade” means a trade which is carried on in the State and which during an accounting period consists wholly or mainly of any of the following classes of trading operations—

(a) the manufacture of goods,

(b) the carrying out of construction operations within the meaning of section 17 of the Finance Act, 1970 ,

(c) farming, or

(d) the sale of machinery or plant (excluding vehicles suitable for the conveyance by road of persons) or goods to a person engaged in a trade consisting wholly or mainly of trading operations of a class specified in paragraph (a), (b) or (c) for use for the purposes of that trade;

trading profits”, in relation to any trade, means the profits or gains of the trade computed in accordance with the rules applicable to Case I of Schedule D before the allowance of any deduction under section 64 of the Income Tax Act, 1967 ;

trading stock”, in relation to any trade, has the same meaning as in section 62 of the Income Tax Act, 1967 , and in determining the value of a company's trading stock at any time for the purposes of a deduction under this section, to the extent that, at or before that time, any payments on account have been received by the company in respect of any trading stock, the value of that stock shall be reduced accordingly.

(2) Subject to the following provisions of this section, if—

(a) a company carries on in an accounting period a trade in respect of which it is within the charge to income tax under Case I of Schedule D, and

(b) the value of the company's trading stock at the end of the accounting period (in this section referred to as its “closing stock value”) exceeds the value of its trading stock at the beginning of the accounting period (in this section referred to as its “opening stock value”),

the company shall, in the computation for the purposes of income tax of its trading profits, be entitled to a deduction under this section by reference to the amount of that excess as if the deduction were a trading expense incurred in the accounting period; and in the

following provisions of this section the amount of that excess is referred to as the company's “increase in stock value”.

(3) The third Schedule shall have effect for the purpose of supplementing this section.

(4) (a) In any case where a company is entitled to a deduction under this section, that deduction shall be an amount equal to its increase in stock value in an accounting period less 20 per cent. of its trading profits for that period:

Provided that—

(i) in no case shall the amount of the deduction as so computed exceed the amount of the company's trading profits for that period,

(ii) the company's trading profits to be taken into account in computing a deduction shall be those profits before any deduction is made under this section or the Third Schedule, and

(iii) any deduction allowed under the provisions of this section in computing a company's trading profits for an accounting period shall not have effect for any purpose of the Income Tax Acts for any year of assessment prior to 1974-75 or later than 1975-76.

(b) There shall be made such reductions of assessments or repayments of tax as may in any case be required in order to give effect to this section.

(5) A company shall not be entitled to a deduction under this section in respect of an assessment unless it makes a claim before—

(a) the date on which the assessment becomes final and conclusive, or

(b) the expiry of the period of six months beginning with the date of the passing of this Act,

whichever is the later.

(6) Where under the provisions of this section an amount is deducted as an expense in computing trading profits for an accounting period for the purposes of income tax, that amount shall be similarly treated for the purposes of corporation profits tax.

Amendment of section 41 of Finance Act, 1974.

32. Section 41 (7) of the Finance Act, 1974 , is hereby amended, as on and from the 12th day of February, 1975, by the substitution of “section 16 (3)” for “section 16 (2)”.

Definition of “capital allowance”.

33. —(1) In the Income Tax Acts, save where the context otherwise requires, “capital allowance” means any allowance (other than an allowance or deduction to be made in computing profits or gains) under—

(a) Parts XIII to XVIII of the Income Tax Act, 1967 ,

(b) section 22 of the Finance Act, 1971 ,

(c) the Finance (Taxation of Profits of Certain Mines) Act, 1974 , or

(d) section 22 of the Finance Act, 1974 ,

and “capital allowances” shall be construed accordingly.

(2) Part II of the First Schedule shall have effect for the purpose of supplementing this section.

Allowance in respect of certain buildings or structures.

34. —(1) Section 255 (1) of the Income Tax Act, 1967 , is hereby amended by the insertion of the following paragraph after paragraph (c):

“(cc) for the intensive production of cattle, sheep, pigs, poultry or eggs in the course of a trade other than the trade of farming within the meaning of section 13 of the Finance Act, 1974 , or”.

(2) In relation to a building or structure which falls to be regarded as an industrial building or structure by virtue of subsection (1), Chapter II of Part XV and Chapter I of Part XVI of the Income Tax Act, 1967 , shall have effect as if—

(a) “one-fifth” were substituted for “one-tenth” in section 254 (1) of the said Act,

(b) “one-tenth” were substituted for “one-fiftieth” in sections 264 (1) and 266 (4) of the said Act,

(c) “tenth year” were substituted for “fiftieth year” in section 264 (3) and the proviso to section 265 (1) of the said Act,

(d) paragraph (a) of the proviso to section 266 (4) of the said Act were deleted.

(3) The foregoing provisions of this section shall have effect as respects capital expenditure incurred on or after the 6th day of April, 1971, but no allowance shall be made under the said Chapters by virtue of this section—

(a) for any year of assessment prior to the year 1974-75, or

(b) under section 254 (1) of the Income Tax Act, 1967 , in respect of expenditure incurred before the 6th day of April, 1974.

Amendment of certain enactments.

35. —Each enactment mentioned in column (2) of Part III of the First Schedule is, with effect from the 6th day of April, 1974, amended as specified in column (3) of the said Part.