Chapter VII

Income Tax and Corporation Tax

52. — Section 40 of the Finance Act, 1977 , is hereby amended by the substitution of “six” for “four” (inserted by the Finance Act, 1978 ) in each place where it occurs in subsection (1), and the said subsection (1), as so amended, is set out in the Table to this section.

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(1) Notwithstanding the proviso to section 31 (1) of the Corporation Tax Act, 1976 , any arrangements entered into by the Revenue Commissioners and any building society as respects the year of assessment 1975-76, in so far as they provide for payment of an amount representing income tax calculated in part at the standard rate and in part at a reduced rate, may, with any necessary modifications, be continued for the six years of assessment immediately following for the purpose of determining, in relation to that building society, the amount representing income tax which is referred to in paragraph (a) of the said section 31 (1) and that section shall have effect in relation to any arrangements so continued for the said six years.

53. —(1) Section 31A (inserted by the Finance Act, 1976 ) of the Finance Act, 1975 , is hereby amended by the substitution of “1980” for “1979”—

(a) in paragraph (iv) (inserted by the Finance Act, 1979 ) of the proviso (inserted by the Finance Act, 1977 ) to subsection (4) (a),

(b) in subsection (7) (inserted by the Finance Act, 1977 ), and

(c) in subsection (9) (inserted by the Finance Act, 1977 ) in each place where it occurs,

and the said paragraph, the said subsection (7) (other than the proviso) and the said subsection (9) (other than the proviso), as so amended, are set out in the Table to this subsection.

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(iv) a deduction shall not be allowed under the provisions of this section in computing a company's trading income for any accounting period which ends on or after the 6th day of April, 1980.

(7) Where in relation to an accounting period a company's opening stock value exceeds its closing stock value, the amount of the excess (in this section referred to as the company's “decrease in stock value”) shall, if the accounting period ends on a date before the 6th day of April, 1980, be treated in the computation of the company's trading income for the purposes of corporation tax, as a trading receipt of the company's trade for that accounting period:

(9) In the computation of a company's trading income for the purposes of corporation tax for any accounting period which ends on or after the 6th day of April, 1980, in which there is a decrease in stock value, there shall be treated as a trading receipt of the company's trade for that accounting period the amount (if any) by which A exceeds the aggregate of B and C

where—

A is the aggregate amount of the company's decreases in stock value in all accounting periods which ended on or after the 6th day of April, 1980,

B is the aggregate amount of the company's increases in stock value in all accounting periods which ended on or after the 6th day of April, 1980, and

C is the aggregate of the amounts which under this subsection are treated as trading receipts of the company's trade for preceding accounting periods:

(2) Section 12 of the Finance Act, 1976 , is hereby amended—

(a) by the insertion, in paragraph (c) (inserted by the Finance Act, 1979 ) of subsection (2), after “1979-80” of “or 1980-81”,

(b) by the substitution in subsection (3) of “1980-81” for “1979-80” (inserted by the Finance Act, 1979 ), and

(c) by the substitution of “1980” for “1979” in each place where it occurs in subsection (5) (inserted by the Finance Act, 1978 ) and subsection (6) (inserted by the Finance Act, 1977 ),

and the said paragraph, the said subsection (3), the said subsection (5) (other than the proviso) and the said subsection (6) (other than the proviso), as so amended, are set out in the Table to this subsection.

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(c) Where a deduction allowed by virtue of this section in computing a person's trading profits of a trade for an accounting period has effect for the year 1979-80 or 1980-81, the amount of the deduction shall, notwithstanding any provision to the contrary, be three-fourths of the amount which, apart from this paragraph, would be the amount of the deduction for that accounting period.

(3) Any deduction allowed by virtue of this section in computing a person'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 the year 1974-75 or later than the year 1980-81.

(5) In the computation of a person's trading income for an accounting period in which there is a decrease in stock value and which ends on a date in the period from the 6th day of April, 1976, to the 5th day of April, 1980, the amount of that decrease shall be treated as a trading receipt of the trade for that accounting period:

(6) In the computation of a person's trading income for any accounting period in which there is a decrease in stock value and which ends on or after the 6th day of April, 1980, there shall be treated as a trading receipt of the trade for that accounting period the amount (if any) by which A exceeds the aggregate of B and C

where—

A is the aggregate amount of the person's decreases in stock value in all accounting periods which ended on or after the 6th day of April, 1980,

B is the aggregate amount of the person's increases in stock value in all accounting periods which ended on or after the 6th day of April, 1980, and

C is the aggregate of the amounts which are treated as trading receipts of the person's trade for preceding accounting periods which ended on or after the 6th day of April, 1980:

54. —(1) Section 416 (5) of the Income Tax Act, 1967 , shall have effect as if “this Part” were substituted for “subsections (7) and (8)”.

(2) Section 421 of the Income Tax Act, 1967 , shall have effect, and, as respects paragraph (b), shall be deemed always to have had effect, as if—

(a) the following proviso were added to subsection (2):

“Provided that the Commissioners may permit any other person representing the appellant to plead before them where they are satisfied that such permission should be given.”,

(b) the following subsections were added:

“(5) Unless the circumstances of the case otherwise require—

(a) where on an appeal against an assessment which assesses an amount which is chargeable to tax it appears to the Commissioners that the appellant is overcharged by the assessment they may, in determining the appeal, reduce only the amount which is chargeable to tax,

(b) where, on such an appeal as aforesaid, it appears to the Commissioners that the appellant is correctly charged by the assessment they may, in determining the appeal, order that the amount which is chargeable to tax shall stand good, and

(c) where, on such an appeal as aforesaid, it appears to the Commissioners that the appellant ought to be charged in an amount exceeding the amount contained in the assessment, they may charge the excess by increasing only the amount which is chargeable to tax.

(6) Where an appeal is determined by the Commissioners, the inspector or other officer shall give effect to the Commissioners' determination and thereupon, if the determination is that the assessment is to stand good or is to be amended, the assessment or the amended assessment, as the case may be, shall have the same force and effect as if it were an assessment in respect of which no notice of appeal had been given.”.

55. —The following section shall be substituted for section 4 of the Income Tax Act, 1967 :

“4.—Where any Act enacts that income tax shall be charged for any year at any rate or rates, tax at that rate or at those rates, as may be appropriate, shall, subject to the provisions of this Act and the Corporation Tax Act, 1976 , be charged for that year in respect of all property, profits or gains respectively described or comprised in the Schedules contained in the sections enumerated below, that is to say—

Schedule C — Section 47;

Schedule D — Section 52;

Schedule E — Section 109; and

Schedule F — Section 83 of the Corporation Tax Act, 1976 ,

and in accordance with the provisions of this Act and of the Corporation Tax Act, 1976 , respectively applicable to those Schedules.”.

56. — Section 24 of the Finance Act, 1973 , is hereby amended—

(a) by the insertion after subsection (1) of the following subsection—

“(1A) In respect of any expenses incurred on or after the 27th day of February, 1980, in providing business entertainment, no sum shall be—

(a) deducted in computing the amount of profits or gains chargeable to tax under Schedule D, or

(b) included in computing any expenses of management in respect of which a deduction may be claimed under section 15 or 33 of the Corporation Tax Act, 1976 ,

in excess of 50 per cent. of the sum which, but for this subsection, would have been so deducted or so included.”,

(b) as respects the year 1980-81 and subsequent years of assessment and as respects any accounting period of a company which ends on or after the 6th day of April, 1980, by the substitution for subsection (3) of the following subsection—

“(3) (a) Where any asset is used or is provided for use, wholly or partly, for the purpose of providing business entertainment—

(i) if the expenses incurred or to be incurred in respect of the provision of the said business entertainment are not or will not be wholly, exclusively and necessarily laid out or expended for the purposes of a trade, no allowance under the specified provisions shall be allowed in respect of the use of the asset or the expenditure incurred in the provision of the asset to the extent that it is used or is to be used for the purposes of the said business entertainment,

(ii) if the expenses incurred or to be incurred in respect of the provision of the business entertainment are or will be wholly, exclusively and necessarily incurred for the purposes of a trade, no allowance under the specified provisions shall be allowed in respect of the use of the asset or the expenditure incurred in the provision of the asset to the extent that it is used or is to be used for the purpose of the said business entertainment save to the extent of 50 per cent. of the allowance which, apart from this subparagraph, would have been allowed.

(b) In this subsection ‘specified provisions’ means section 241, Chapter III of Part XIV, Chapters I and III of Part XV and Chapters II and V of Part XVI of the Income Tax Act, 1967 , and section 22 of the Finance Act, 1971 .”,

and

(c) by the substitution in subsection (4) of “subsections (1) and (1A) apply” for “subsection (1) applies”.

57. —(1) Section 488 (5) of the Income Tax Act, 1967 , is hereby amended by the insertion in paragraph (a) after subparagraph (i) of the following subparagraph:

“(ia) under the provisions of section 429 (4) (inserted by section 19 of the Finance Act, 1971 ), or”.

(2) Section 500 of the Income Tax Act, 1967 , is hereby amended by the insertion after subsection (3) of the following subsection:

“(4) In proceedings for recovery of a penalty incurred under this section or under section 501—

(i) a certificate signed by an officer of the Revenue Commissioners which certifies that he has examined his relevant records and that it appears from them that a stated notice or precept was duly given to the defendant on a stated day shall be evidence until the contrary is proved that that person received that notice or precept in the ordinary course,

(ii) a certificate signed by an officer of the Revenue Commissioners which certifies that he has examined his relevant records and that it appears from them that, during a stated period, a stated notice or precept has not been complied with by the defendant shall be evidence until the contrary is proved that the defendant did not, during that period, comply with that notice or precept,

(iii) a certificate signed by an officer of the Revenue Commissioners which certifies that he has examined his relevant records and that it appears from them that, during a stated period, the defendant has failed to do a stated act, furnish stated particulars or deliver a stated account in accordance with any of the provisions specified in column 3 of Schedule 15 shall be evidence until the contrary is proved that the defendant did so fail,

(iv) a certificate certifying as provided for in subparagraph (i), (ii) or (iii) and purporting to be signed by an officer of the Revenue Commissioners may be tendered in evidence without proof and shall be deemed until the contrary is proved to have been signed by such officer.”.

58. — Section 265 (4) of the Income Tax Act, 1967 , is hereby amended by the substitution for “whole of the relevant period.” of “whole of the relevant period:

Provided that where, but for section 264 (4) or the proviso to paragraph 1 (5) of the First Schedule to the Corporation Tax Act, 1976 , a writing-down allowance would have been made to a person for any chargeable period, the part of the relevant period comprised in the said chargeable period or its basis period shall be deemed for the purposes of this subsection to be comprised in a chargeable period for which a writing-down allowance was made to the person.”.