Finance Act, 1978
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Amendment of Chapter IV (manufacturing companies) of Part I of Finance Act 1977. |
20.—Chapter IV of Part I of the Finance Act, 1977 , is hereby amended— | |
(a) by the substitution of the following sections for sections 21, 23, 24 and 26: | ||
Standard year. | ||
“21.—For the purposes of, and subject to the subsequent provisions of, this Chapter, the standard year in relation to a specified trade means the financial year in which the trade is first carried on, and the standard year shall be applicable in relation to the specified trade whether or not during the whole or part of the standard year the specified trade was carried on by a person other than the company by which it is carried on in | ||
the relevant period or separate parts of the specified trade were carried on by different persons: | ||
Provided that where a trade was first carried on before the 1st day of January, 1976, the standard year in relation to that trade shall be the financial year 1976. | ||
Corresponding part of standard year. | ||
23.—Where a 1977 period, a 1978 period or a 1979 period is less than twelve months, the corresponding part of the standard year in relation to a specified trade shall be the part which begins twelve months, twenty-four months or thirty-six months, as the case may be, before the date on which that period begins and which ends twelve months, twenty-four months or thirty-six months, as the case may be, before the date on which that period ends. | ||
Rate of corporation tax for certain manufacturing companies carrying on a trade on 31st December, 1976. | ||
24.—(1) This section applies to a company which carried on a trade on the 31st day of December, 1976. | ||
(2) Where a company to which this section applies claims and proves as respects a 1977 period— | ||
(a) that it carries on a specified trade, | ||
(b) that its income as computed for the purposes of corporation tax from the specified trade for the accounting period which coincides with or includes the 1977 period is not less than 95 per cent. of the total amount of its income as so computed for that accounting period, | ||
(c) (i) that the volume of sales (being the amount determined in accordance with section 25) by the company in the 1977 period of goods manufactured in the State, and sold, in the course of the specified trade is not less than 105 per cent. of the amount receivable from the sale, in the standard year in relation to that trade, or, where the 1977 period is less than twelve months, in the corresponding part of the standard year in relation to that trade, of goods manufactured in the State in the course of that trade, or | ||
(ii) that the amount receivable by the company from the sale in the 1977 period of goods manufactured in the State in the course of the specified trade is not less than 119 per cent. of the amount receivable from the sale, in the standard year in relation to that trade, or, where the 1977 period is less than twelve months, in the corresponding part of the standard year in relation to that trade, of goods manufactured in the State in the course of that trade, | ||
and | ||
(d) that the number of employment contributions payable in respect of all employed contributors engaged directly or indirectly in the manufacture of goods in the State in the course of the specified trade of the company in the 1977 period is not less than 103 per cent. of the number of employment contributions payable in respect of all employed contributors engaged directly or indirectly in the manufacture of goods in the State in the course of that trade, in the standard year in relation to that trade, or, where the 1977 period is less than twelve months, in the corresponding part of the standard year in relation to that trade, | ||
the corporation tax charged on the income of the company for the accounting period which coincides with or includes the 1977 period shall, notwithstanding the provisions of sections 1 and 79 of the Corporation Tax Act, 1976 , be calculated as if the rate of corporation tax for the financial year 1977 were 25 per cent. and for this purpose the income of the company for that accounting period shall be its income for that period as defined in section 28 of the Corporation Tax Act, 1976 , for the purposes of that section. | ||
(3) The provisions of subsection (2), except paragraph (c) thereof, shall apply, subject to the provisions of subsections (4), (5) and (6), in relation to a 1978 period and a 1979 period as they apply in relation to a 1977 period. | ||
(4) (a) In relation to a 1978 period— | ||
(i) each reference in subsection (2) to 1977 shall be construed as a reference to 1978, and | ||
(ii) the reference in subsection (2) (d) to 103 per cent. shall be construed as a reference to 106 per cent. | ||
(b) In relation to a 1979 period— | ||
(i) each reference in subsection (2) to 1977 shall be construed as a reference to 1979, and | ||
(ii) the reference in subsection (2) (d) to 103 per cent. shall be construed as a reference to 109 per cent. | ||
(5) In relation to a 1978 period, a company may elect to have the financial year 1977 treated as the standard year for the purposes of subsection (2) (d) in relation to the specified trade carried on by it and, where such election is made, the provisions of subsection (4) (a) (ii) shall not apply to the company. | ||
(6) In relation to a 1979 period, a company may elect either— | ||
(a) to have the financial year 1977 treated as the standard year for the purposes of subsection (2) (d) in relation to the specified trade carried on by it, or | ||
(b) to have the financial year 1978 treated as the standard year for the purposes of subsection (2) (d) in relation to the specified trade carried on by it, and | ||
where the election referred to in paragraph (a) is made, the provisions of subsection (4) (b) (ii) shall apply to the company as if the reference to 109 per cent. were a reference to 106 per cent., and, where the election referred to in paragraph (b) is made, the provisions of subsection (4) (b) (ii) shall not apply to the company. | ||
Rate of corporation tax for certain manufacturing companies commencing to trade in 1977. | ||
24A.—(1) This section applies to a company which— | ||
(a) begins to carry on a trade in the financial year 1977, and | ||
(b) is not a company to which the provisions of section 24 apply. | ||
(2) In relation to a 1978 period of a company to which this section applies— | ||
(a) the provisions of section 24 (2), except paragraph (c) thereof, shall apply as they apply in relation to a 1977 period of a company to which section 24 applies with the modifications that— | ||
(i) each reference in section 24 (2) to 1977 shall be construed as a reference to 1978, and | ||
(ii) the reference in section 24 (2) (d) to 103 per cent. shall, if the standard year in relation to the specified trade carried on by the company is the financial year 1976, be construed as a reference to 106 per cent., | ||
and | ||
(b) if, but for this paragraph, the standard year in relation to the specified trade carried on by the company would be the financial year 1976, the company may elect to have the financial year 1977 treated as the standard year for the purposes of the said section 24 (2) (d) in relation to such trade. | ||
(3) In relation to a 1979 period of a company to which this section applies— | ||
(a) the provisions of section 24 (2), except paragraph (c) thereof, shall apply as they apply in relation to a 1977 period of a company to which section 24 applies with the modifications that— | ||
(i) each reference in section 24 (2) to 1977 shall be construed as a reference to 1979, and | ||
(ii) the reference in section 24 (2) (d) to 103 per cent. shall, if the standard year in relation to the specified trade carried on by the company is the financial year 1976, be construed as a reference to 109 per cent., and if such standard year in relation to such trade is the financial year 1977, be construed as a reference to 106 per cent., | ||
(b) if, but for this paragraph, the standard year in relation to the specified trade carried on by the company would be the financial year 1976, the company may elect to have the financial year 1977 or the financial year 1978 treated as the standard year for the purposes of the said section 24 (2) (d) in relation to such trade, and | ||
(c) if, but for this paragraph, the standard year in relation to the specified trade carried on by the company would be the financial year 1977, the company may elect to have the financial year 1978 treated as the standard year for the purposes of the said section 24 (2) (d) in relation to such trade. | ||
Rate of corporation tax for certain manufacturing companies commencing to trade in 1978. | ||
24B.—(1) This section applies to a company which— | ||
(a) begins to carry on a trade in the financial year 1978, and | ||
(b) is not a company to which the provisions of section 24 or 24A apply. | ||
(2) (a) The provisions of section 24 (2), except paragraph (c) thereof, shall apply in relation to a 1979 period of a company to which the provisions of this section apply, as they apply in relation to a 1977 period of a company to which the provisions of section 24 apply with the modifications specified in section 24A (3) (a). | ||
(b) Paragraphs (b) and (c) of section 24A (3) shall apply for the purposes of this section as they apply for the purposes of that section. | ||
Succession to trade. | ||
26.—Where a company succeeds to a trade or part of a trade which was carried on by another company the first-mentioned company shall, for the purposes of this Chapter, be deemed to have carried on the trade or part of the trade from the date on which the other company commenced to carry on the trade.”, | ||
and | ||
(b) in section 29— | ||
(i) by the substitution of the following paragraph for paragraph (b) of subsection (1): | ||
“(b) the accounting period falls partly in one financial year and partly in another financial year,”, and | ||
(ii) by the substitution of the following subsection for subsection (3): | ||
“(3) Where for an accounting period corporation tax is charged at the rate of 25 per cent. on all or part of a company's income— | ||
(a) the provisions of section 28 of the Corporation Tax Act, 1976 , shall not have effect for the 1977 period, the 1978 period or the 1979 period which coincides with, or is included in, that accounting period, and | ||
(b) sections 182 (3) and 184 (3) of the said Act shall have effect for the 1977 period, the 1978 period or the 1979 period which coincides with, or is included in, that accounting period as if the standard rate for each of the years 1976-77 to 1979-80 were 25 per cent.”. |