Corporation Tax Act, 1976

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Basis of relief from corporation tax.

58.—(1) Where a company claims and proves as respects a relevant accounting period—

(a) that, during the standard period in relation to the trade, goods were, in the course of the trade, exported out of the State,

(b) that, during the relevant accounting period, goods were, in the course of the trade, exported out of the State, and

(c) that the total amount receivable from the sale of the last mentioned goods was in excess of the total amount (in this section referred to as the standard amount) receivable from the sale of the goods exported during the standard period,

corporation tax payable by the company for the relevant accounting period, so far as it is referable to the income attributable to the said excess, shall be reduced to nil; and the corporation tax referable to the income attributable to the said excess shall be such an amount as bears to the relevant corporation tax, as defined in subsection (10), the same proportion as the income attributable to the said excess bears to the total income brought into charge to corporation tax.

(2) For the purposes of subsection (1) “the income attributable to the said excess” shall be taken to be such sum as bears to the amount of the company's income for the relevant accounting period, which is attributable to the sale of goods (whether exported or not), the same proportion as the amount of the said excess bears to the total amount receivable by the company from such sale in the relevant accounting period.

(3) Where a company claims and proves as respects a relevant accounting period—

(a) that, during the standard period in relation to the trade, no goods were, in the course of the trade, exported out of the State or that the standard period is not applicable, and

(b) that, during the relevant accounting period, goods were, in the course of the trade, exported out of the State,

corporation tax payable by the company for the relevant accounting period, so far as it is referable to the income from the sale of the goods so exported, shall be reduced to nil; and the corporation tax referable to the income from the sale of goods so exported shall be such an amount as bears to the relevant corporation tax the same proportion as the income from the sale of goods so exported bears to the total income brought into charge to corporation tax.

(4) For the purposes of subsection (3) “the income from the sale of the goods so exported” shall be taken to be such sum as bears to the amount of the company's income for the relevant accounting period, which is attributable to the sale of goods (whether exported or not), the same proportion as the amount receivable in the relevant accounting period from the sale of goods exported bears to the total amount receivable by the company from the sale of goods (whether exported or not) in the relevant accounting period.

(5) In a case in which the preceding provisions of this section apply, and the export out of the State in the relevant accounting period consisted of or included goods with respect to which section 54 (3) provides for the inclusion thereof in the definition of “goods”, this Part shall have effect subject to the insertion, in subsections (2) and (4), of “and of merchandise (whether exported or not) other than such goods” after “goods (whether exported or not)” wherever the latter words occur.

(6) In relation to a company which has obtained relief from corporation tax under subsection (1) or (3) of this section, from income tax under section 404 (1) or (3) of the Income Tax Act, 1967 (basis of relief from tax on profits from exports), or from corporation profits tax under section 13 (1) or (3) of the Finance (Miscellaneous Provisions) Act, 1956 (basis of relief from corporation profits tax), this section shall apply as respects any accounting period or part of an accounting period of the company within the period of five years commencing on the expiration of the period comprising the company's relevant accounting periods within the meaning of section 53 as if—

(a) “relevant accounting period”, wherever occurring in this Part, referred to it, and

(b) for “shall be reduced to nil” in subsections (1) and (3) of this section there were substituted—

(i) in case it is an accounting period or part of an accounting period within the first of those years, “shall be reduced by 80 per cent.”,

(ii) in case it is an accounting period or part of an accounting period within the second of those years, “shall be reduced by 65 per cent.”,

(iii) in case it is an accounting period or part of an accounting period within the third of those years, “shall be reduced by 50 per cent.”,

(iv) in case it is an accounting period or part of an accounting period within the fourth of those years, “shall be reduced by 35 per cent.”, and

(v) in case it is an accounting period or part of an accounting period within the fifth of those years, “shall be reduced by 15 per cent.”:

Provided that this subsection shall not apply to an accounting period or part of an accounting period falling after the 5th day of April, 1990.

(7) (a) Where a relevant accounting period is a period of less than twelve months, the standard amount shall, for the purpose of ascertaining the excess referred to in subsection (1), be taken to be such part thereof as bears to the whole of the said amount the same proportion as the relevant accounting period bears to twelve months.

(b) Where a relevant accounting period is part of an accounting period of a company, the total amount receivable from the sale of goods (whether exported or not), the total amount receivable from the sale of goods exported out of the State and the amount of the company's income which is attributable to the sale of goods (whether exported or not) shall be taken to be such part of each such amount as bears to the whole of each such amount the same proportion as the length of the relevant accounting period bears to the length of the accounting period of the company.

(8) Where, on or after the day on which the standard period commenced, any change takes place whereby a part of a trade becomes transferred to any person, the standard amount shall, as respects any relevant accounting period in which, or prior to which, the change occurs, be apportioned for the purposes of subsection (1), and every such apportionment shall be made in such manner as the Revenue Commissioners consider just, having regard to all the circumstances.

(9) A reduction shall not be made under this section in respect of corporation tax payable on income from any mining operations.

(10) For the purposes of this section “relevant corporation tax” means the corporation tax which, apart from this section and sections 184 (relief in respect of corporation profits tax losses) and 186 (transitional relief for certain payments and management expenses), would be chargeable for the relevant accounting period exclusive of the corporation tax charged on the company's chargeable gains for that period.