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Film withholding tax
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25. (1) The Principal Act is amended by inserting the following Chapter after section 529A:
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“Chapter 1A
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Payments in respect of non-resident artistes by companies qualifying for relief for investment in films
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Interpretation (Chapter 1A)
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529B. (1) In this Chapter—
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‘artiste’ means an individual who provides artistic services;
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‘artistic services’ means the services of an individual, when provided within the State, in giving a performance in audio-visual works of any kind, including films and television content, which is or may be made available to the public or any section of the public;
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‘appropriate tax’, in relation to a relevant payment, means—
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(a) where such payment does not include value-added tax, a sum representing income tax on the amount of that payment at the standard rate in force at the time of payment, and
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(b) where such payment includes value-added tax, a sum representing income tax at the standard rate in force at the time of payment on the amount of that payment exclusive of the value-added tax;
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‘certificate of deduction’ means a certificate issued in accordance with section 529D(2);
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‘chargeable period’ means the period specified in a notice in writing given by the Revenue Commissioners to a person, being a period of one or more income tax months, in respect of which the person is required under section 529E to make a return to the Collector-General, or where no such notice issued, a calendar month;
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‘due date’, in relation to a chargeable period, means the day that is 23 days after the end of that period;
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‘EEA Agreement’ means the Agreement on the European Economic Area signed at Oporto on 2 May 1992, as adjusted by all subsequent amendments to that Agreement;
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‘EEA State’ means a state which is a contracting party to the EEA Agreement;
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‘electronic means’ has the meaning assigned to it in section 917EA(1);
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‘income tax month’ means a calendar month;
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‘non-resident’ means an individual who is neither resident nor ordinarily resident in the State, in another Member State or in another EEA state;
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‘qualifying company’ has the meaning assigned to it in section 481;
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‘relevant payment’ means any payment of whatever nature made, whether directly or indirectly, by a qualifying company in a chargeable period in respect of artistic services provided by an artiste who is non- resident, whether or not the artistic services are provided directly or indirectly to the qualifying company including any payments relating to the exploitation of or compensation for any rights held by or on behalf of or in respect of the artiste who is non-resident, but excludes emoluments to which Chapter 4 of Part 42 applies;
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‘Revenue officer’ means an officer of the Revenue Commissioners;
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‘specified person’ means a person to whom a relevant payment is due.
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(2) For the purposes of this Chapter any reference to the amount of a relevant payment shall be construed as a reference to the amount which would be the amount of that payment as if no appropriate tax were required to be deducted from that payment.
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Deduction of tax from relevant payments
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529C. (1) (a) A qualifying company making a relevant payment shall deduct from the amount of the payment the appropriate tax in relation to the payment.
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(b) The specified person shall allow such deduction on the receipt of the residue of the payment.
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(c) The qualifying company shall be acquitted and discharged of such amount as is represented by the deduction, as if that amount had actually been paid to the specified person.
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(2) (a) A specified person shall be entitled to have the amount of the relevant payment reduced by the amount of expenditure, which was not reimbursed or is not reimbursable, that was incurred in the provision of artistic services to a qualifying company.
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(b) The amount of expenditure referred to in paragraph (a) shall be computed as if the artistic services provided to the qualifying company was a separate trade and the expenditure was incurred for the purposes of that trade.
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(c) A specified person may make a claim to the Revenue Commissioners in respect of expenditure defrayed in accordance with paragraph (b).
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(d) Where a Revenue officer is satisfied that the amount of expenditure claimed under paragraph (c) would not have been disallowed under section 81 if the specified person had provided the services directly to the qualifying company by carrying on a trade or profession chargeable to tax under Case I or Case II, then a Revenue officer shall issue a notification to the qualifying company specifying the amount of expenditure that shall be allowed as a deduction under paragraph (a).
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(e) On receipt of a notification issued under paragraph (d), the qualifying company shall deduct the appropriate tax from the amount of the relevant payment after allowing the deduction in the notification issued under paragraph (d).
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(3) A qualifying company which makes a relevant payment to a specified person in circumstances other than those referred to in subsection (1) shall—
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(a) be liable to pay tax to the Revenue Commissioners at the standard rate on the amount of the relevant payment, and
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(b) without prejudice to any other penalty to which the qualifying company may be liable and without prejudice to section 1078, be liable to a penalty of €5,000 or the amount of the tax payable under paragraph (a), whichever is the lesser.
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Identification of, and issue of documents to, specified persons
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529D. (1) A specified person shall furnish to a qualifying company details of the specified person’s country of residence, address and tax reference in the country of residence.
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(2) Where the specified person has complied with subsection (1) the qualifying company, on making a relevant payment, shall give to such person a certificate of deduction in a form prescribed by the Revenue Commissioners with particulars of—
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(a) the name and address of the specified person,
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(b) the specified person’s tax reference as furnished in accordance with subsection (1),
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(c) the amount of the relevant payment,
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(d) the amount of the appropriate tax deducted from that payment, and
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(e) the date on which the payment is made.
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Returns by qualifying company
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529E. (1) On or before the due date relating to a chargeable period, a qualifying company shall make a return to the Collector-General of all relevant payments made by the qualifying company during that chargeable period and shall specify on that return the amount of the qualifying company’s tax liability under this Chapter.
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(2) A return required under this section shall be made by electronic means and the relevant provisions of Chapter 6 of Part 38 shall apply.
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(3) Where a qualifying company fails to submit the return due under subsection (1), the qualifying company shall, without prejudice to any other penalty to which the qualifying company may be liable and without prejudice to section 1078, be liable to a penalty of €5,000 or the amount of the tax due under subsection (2), whichever is the lesser.
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(4) The Revenue Commissioners shall make regulations for the purposes of this section and such regulations may provide for—
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(a) the manner by which qualifying companies shall communicate electronically with the Revenue Commissioners,
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(b) the particulars to be included in the return required under this section, and
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(c) any other matters relating to returns under this section by a qualifying company.
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Payment of tax by qualifying company
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529F. On or before the due date relating to a chargeable period, a qualifying company shall remit to the Collector-General all amounts of appropriate tax which the qualifying company is liable under this Chapter to deduct from relevant payments made by the qualifying company during that chargeable period.
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Assessment by Revenue officer
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529G. (1) Where a Revenue officer has reason to believe that there is an amount of appropriate tax in relation to a relevant payment that ought to have been but has not been included in a return under section 529E(1), or where the Revenue officer is dissatisfied with any such return, the Revenue officer may make an assessment on the qualifying company to the best of the officer’s judgement of the amount of the appropriate tax which in the opinion of the officer is due and payable by the qualifying company for the chargeable period or periods.
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(2) Without prejudice to section 529E but subject to subsection (4), the amount of tax specified in an assessment under subsection (1) shall be due and payable to the Revenue Commissioners from the qualifying company so assessed.
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(3) (a) A Revenue officer may, where the officer considers this necessary, amend an assessment of tax made under subsection (1), and where, in accordance with this section, the Revenue officer makes or amends an assessment, the officer shall give notice to the qualifying company assessed showing the total amount of tax due and payable in accordance with the assessment.
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(b) Without prejudice to anything in this section, the provisions of Chapter 5 of Part 41A, including those relating to time limits shall, with any necessary modifications, apply to the making and amending of an assessment under this section.
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(c) The Revenue officer may issue the notice of assessment or of amended assessment by electronic means.
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(4) (a) Where a notice is given to a qualifying company under subsection (3), the qualifying company may, if the qualifying company claims that the total amount of tax assessed is excessive, on giving notice in writing to the Revenue officer within the period of 30 days from the date of the notice, appeal to the Appeal Commissioners.
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(b) A qualifying company to whom notice is given under subsection (3), shall not be entitled to appeal to the Appeal Commissioners—
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(i) in the case of a qualifying company who has made a return under section 529E, until that qualifying company has paid the tax due and payable on the basis of the qualifying company’s return together with the related interest due under section 529H, and
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(ii) in any other case, until the qualifying company has made a return under section 529E for the return period concerned and has paid the tax due and payable on the basis of that return together with the related interest due under section 529H.
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(c) The Appeal Commissioners shall hear and determine an appeal made to them under this subsection as if it were an appeal against an assessment to income tax and the provisions of the Income Tax Acts relating to such appeals and to the rehearing of an appeal and to the statement of a case for the opinion of the High Court on a point of law shall apply accordingly with any necessary modifications.
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Interest on late payment of appropriate tax
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529H. (1) Where an amount of tax which a qualifying company is liable to pay under this Chapter to the Collector-General is not paid by the due date concerned, simple interest on the amount outstanding shall be paid by the qualifying company to the Collector-General and shall be calculated from the due date concerned until payment, for any day or part of a day during which the amount remains unpaid at the rate specified in section 1080.
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(2) Subsections (3) to (5) of section 1080 shall apply in relation to interest payable under subsection (1) as they apply in relation to interest payable under that section.
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Repayment of appropriate tax
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529I. (1) Notwithstanding anything in the Tax Acts—
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(a) subject to paragraph (d), no repayment of appropriate tax in respect of any relevant payment shall be made to any specified person receiving or entitled to the relevant payment,
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(b) the amount of any relevant payment shall be deemed to be income of the specified person and chargeable to income tax under Case IV of Schedule D and under no other Case or Schedule, and shall be taken into account in computing the total income of the person entitled to that amount but in relation to such a person—
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(i) except for the purposes of a claim to repayment under paragraph (d), the specified amount within the meaning of section 188(2) shall, as respects the year of assessment for which the person is to be charged to income tax in respect of the relevant payment, be increased by that amount, and
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(ii) where the taxable income of that person includes a relevant payment then the part of the taxable income, equal to that relevant payment, shall be chargeable to tax at the rate at which tax was deducted from the relevant payment,
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(c) section 59 shall apply as if a reference to appropriate tax deductible by virtue of this Chapter were contained in paragraph (a) of that section,
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(d) (i) a specified person shall be entitled in computing the income chargeable under Case IV, in accordance with paragraph (b), to a deduction in respect of expenditure, which was not reimbursed or is not reimbursable, incurred in the provision of artistic services to a qualifying company,
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(ii) the amount of expenditure referred to in subparagraph (i) shall be computed as if the artistic services provided to the qualifying company was a separate trade or profession and the expenditure was incurred for the purposes of that trade or profession,
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(iii) a specified person may make a claim for repayment of appropriate tax to the Revenue Commissioners in respect of expenditure incurred in accordance with subparagraph (ii),
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(iv) on receipt of a claim under subparagraph (iii) a Revenue officer shall make a determination on an amount that is equal to the expenditure that would not have been disallowed as a deduction under section 81 if the specified person had provided the services directly to the qualifying company by carrying on a trade or profession chargeable to tax under Case I or Case II,
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(v) a repayment of the appropriate tax charged on the amount determined by a Revenue officer under subparagraph (iv) shall be made to the specified person,
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(vi) following a determination under subparagraph (iv) and the application of subparagraph (v) the Revenue Commissioners shall notify the specified person of the repayment, if any, that is due,
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(vii) a claim may not be made under this section where the relevant payment has been reduced, in respect of expenditure incurred, under section 529C(2).
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(2) On receipt of a notice of a determination made under subsection (1)(d)(iv), a specified person who is aggrieved by the determination may, by notice in writing given to the Revenue Commissioners within 30 days of the date of the determination, appeal to the Appeal Commissioners.
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(3) The Appeal Commissioners shall hear and determine an appeal made to them under subsection (2) as if it were an appeal against an assessment to income tax and the provisions of the Income Tax Acts relating to such appeals and to the rehearing of an appeal and to the statement of a case for the opinion of the High Court on a point of law shall apply accordingly with any necessary modifications.
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(4) The Revenue Commissioners shall make regulations for the purposes of this section and such regulations may provide for—
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(a) the manner by which specified persons shall communicate with the Revenue Commissioners,
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(b) the particulars to be included in a claim for a repayment under this section,
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(c) the transmission of information in connection with appeals,
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(d) any other matters related to repayments under this section.
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Obligation on specified person
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529J. Every specified person shall furnish to a qualifying company, on request, all such information or particulars as are required by the qualifying company to enable the qualifying company to comply with this Chapter.
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Record keeping and inspection of records
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529K. (1) Without prejudice to any other provision of the Tax Acts each qualifying company shall keep and maintain a record of all relevant payments made and the record shall state, in relation to each such payment, the name, address and tax reference of the specified person or the artiste, as appropriate, the date of the payment, the amount of the payment and the amount of appropriate tax deducted from the payment.
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(2) The obligations contained in subsections (3) and (4) of section 886 to keep and retain records and linking documents apply to all records, documents and other data created or maintained manually or by any electronic means for the purposes of this Chapter.
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(3) (a) Without prejudice to other provisions of the Tax Acts, any person, or any employee of a person, who has made or received a relevant payment, shall produce to a Revenue officer for inspection all documents and records relating to the relevant payment as are in the power, possession or procurement of such person or employee, as the case may be, which have been requested by the Revenue officer.
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(b) For the purposes of subsection (1), any Revenue officer who exercises powers or performs duties, as the case may be, under this section shall be authorised in writing by the Revenue Commissioners to exercise those powers or perform those duties.
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(c) An authorised officer when exercising powers or performing duties under this section shall, on request, produce evidence of the officer’s authorisation.
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Civil penalties
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529L. Chapter 3A of Part 47 applies, with any necessary modification, to a penalty arising under section 529C(3) or 529E(3).
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Miscellaneous
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529M. (1) Regulations made under this Chapter shall be laid before Dáil Éireann as soon as may be after they are made and, if a resolution annulling those regulations is passed by Dáil Éireann within the next 21 days on which Dáil Éireann has sat after the regulations are laid before it, the regulations shall be annulled accordingly, but without prejudice to the validity of anything previously done under them.
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(2) (a) Anything required to be done by a qualifying company under this Chapter or under regulations made under this Chapter may be done by another person acting under the authority of the qualifying company.
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(b) Where anything is done by such other person under the authority of a qualifying company, this Chapter shall apply as if it had been done by the qualifying company.
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(c) Anything purporting to have been done by or on behalf of a qualifying company shall for the purposes of this Chapter be deemed to have been done by the qualifying company or under the qualifying company’s authority, as the case may be, unless the contrary is proved.
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(3) Anything to be done by or under this Chapter by the Revenue Commissioners, other than the making of regulations, may be done by any Revenue officer or may, if appropriate, be done through such electronic systems as the Revenue Commissioners may put in place for the time being for any such purpose.”.
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(2) Subsection (1) shall come into operation on such day as the Minister for Finance may appoint by order.
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