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19 1972

FINANCE ACT, 1972

PART IV

Corporation Profits Tax

Continuance of certain exemptions from corporation profits tax.

37. —The exemptions from corporation profits tax specified in section 33 (1) of the Finance Act, 1929 , shall be given in respect of the period beginning on the 1st day of January, 1972, and ending on the 31st day of December, 1972.

Amendment of section 52 of Finance Act, 1920.

38. —With effect as on and from the 19th day of April, 1972, section 52 (3) of the Finance Act, 1920, is hereby amended by the deletion, in the definition of “company” contained in the said section 52 (3), of “nor any corporate body which by its constitution is precluded from distributing any profits amongst its members”.

Amendment of section 43 of Finance Act, 1922.

39 .—Section 43 of the Finance Act, 1922, is hereby amended by the addition thereto of the following subsections:

“(3) Corporation profits tax shall not be charged on the profits of a company which is precluded by its constitution from distributing any part of its profits amongst its members.

(4) For the purpose of subsection (3) of this section, a company shall be regarded as being precluded by its constitution from distributing any part of its profits amongst its members if, but only if—

(a) it is a company within the meaning of the Companies Act, 1963 , and its memorandum or articles of association contain provisions—

(i) prohibiting the distribution of any part of its profits amongst its members by way of dividend, bonus or otherwise, and

(ii) securing that if, after the satisfaction of all the debts and liabilities of the company on its winding-up or dissolution, any property of the company is undisposed of, it shall not be given to or distributed amongst its members but shall be—

(I) given to the Minister for Finance for the benefit of the Central Fund, or

(II) given to a body of persons (within the meaning of the Income Tax Acts) selected by the members of the company at or before the time of the winding-up or dissolution aforesaid the objects of which or of each of which are similar to the objects of the company, and the constitution or other governing rules of which or of each of which contains or contain provisions prohibiting (to an extent at least as great as the extent of the prohibitions referred to in relation to the company in this and the other subparagraphs of this paragraph) the distribution of any part of its income or property amongst its members or proprietors, or

(III) given to a body of persons (within the meaning of the Income Tax Acts) or trust established for charitable purposes only,

and

(iii) securing that the aforementioned provisions may not be altered or deleted without the previous consent or approval of the Minister for Finance, or the previous consent or approval of any other Minister of State given after consultation with the Minister for Finance; or

(b) it is a company, established by or under a statute (within the meaning of section 3 of the Interpretation Act, 1937 ) and named therein, or incorporated by or under a charter, and—

(i) is prohibited by or under the statute or charter, as the case may be, from distributing any part of its profits amongst its members by way of dividend, bonus or otherwise or, if not so prohibited, is not authorised by or under the statute or charter to distribute any part of its profits amongst its members, or

(ii) is required to apply its income and property as directed by or under the statute or charter or by a Minister of State.

(5) Where provisions of the kind specified in paragraph (a) of subsection (4) of this section are contained in the memorandum or articles of association of a company and those provisions are altered or deleted without the previous consent or approval of the Minister for Finance, or the previous consent or approval of any other Minister of State given after consultation with the Minister for Finance, as the case may be, the company shall be deemed, for the purposes of Part V of the Finance Act, 1920, and the enactments amending or extending that Part, not to be and not to have been, at any time as on and from the 19th day of April, 1972, a company which is or was precluded by its constitution from distributing any part of its profits amongst its members.

(6) Where, immediately before the 19th day of April, 1972, a company was a company which was precluded by its constitution from distributing any part of its profits amongst its members, and within one year after that date the company, by effecting a change in its constitution, becomes or became a company of a kind to which subsection (3) of this section refers, then the company shall be deemed to have been, as on and from the said date, a company to which the said subsection (3) refers.”.