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Calculation of profits in certain cases.
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41.—(1) Where—
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(a) a company (other than a company to which the next following section applies) is assessed to excess corporation profits tax for any accounting period or part of an accounting period, and
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(b) the standard profits of such company are, for the purpose of such assessment, computed otherwise than by reference to the substituted standard, and
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(c) such company has, since the expiration of the trade year which ended in the year ended on the 31st day of August, 1939, issued stock or share capital or debentures or debenture stock (in this section referred to as the said new issue), and
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(d) either the said new issue was made consequent on an invitation to the public to subscribe therefor or the Revenue Commissioners are satisfied that no part of such issue was paid for or satisfied by the utilisation, directly or indirectly, of assets which were in the hands of the company on the last day (in this paragraph referred to as the said day) of the trade year which ended in the year ended on the 31st day of August, 1939 (excluding from such assets a sum equal to the amount (if any) of dividends distributed and directors' remuneration paid within six months after the said day in respect of a period ending on or before the said day) or by the utilisation, directly or indirectly, of profits of the company made after the said day (excluding from such profits so much thereof as was applied in the payment of dividends or of directors' remuneration to an extent not exceeding in rate the average amount of the dividends distributed or directors' remuneration paid (as the case may be) not later than six months after the said day in respect of the three, two, or one years or year by reference to the profits in one of which the standard profits of the company are computed),
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then and in every such case, for the purpose of ascertaining the profits on which the said tax is to be assessed as aforesaid, there shall be deducted from the profits on which the said tax would, but for this section, be so assessed an amount, if such company is incorporated by or under the laws of the State, equal to the standard payments (as defined in this section) in respect of the said new issue or, if such company is a foreign company, equal to the amount which bears to the standard payments (defined as aforesaid) in respect of the said new issue the same proportion as the amount of the turnover of the trade or business carried on by the company in the State during the said accounting period or part of an accounting period bears to the total turnover of all the trade or business carried on by such company wheresoever during that accounting period or part of an accounting period.
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(2) Where, in the case of a company to which the foregoing sub-section of this section applies, the new issue was made during the interim period as defined in the next preceding section, the provisions of the said foregoing sub-section shall apply and have effect in relation to the profits of such company in the said interim period as if those profits were profits chargeable with excess corporation profits tax and the said interim period were an accounting period.
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(3) In the foregoing sub-section of this section the expression “standard payments in respect of the said new issue” means the amount necessary to provide for the aggregate amount of the following payments in respect of the said accounting period or part of an accounting period, that is to say:—
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(a) the dividends on such (if any) paid-up preference stock or shares as was included in the said new issue at the fixed rate at which such dividends are payable, and
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(b) dividends at the rate of six per cent. per annum on such (if any) paid-up ordinary stock or shares as was included in the said new issue, and
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(c) interest on such (if any) debentures or debenture stock (other than debentures or debenture stock issued to replace an equal amount of debentures or debenture stock issued before the expiration of the trade year which ended in the year ended on the 31st day of August, 1939), as were included in the said new issue at the fixed rate at which such interest is payable.
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