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Exclusion of foreign currency as asset of certain companies.
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65.— (1) The Principal Act is amended by inserting the following section after section 79B:
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“79C.― (1) In this section―
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‘approved accounting standards’ means standards which are in accordance with generally accepted accounting principles in the State or in accordance with International Financial Reporting Standards (as promulgated by the International Accounting Standards Board);
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‘net foreign exchange gain’ means the excess of foreign exchange gains over foreign exchange losses arising on the disposal of currency in a relevant bank deposit by a relevant holding company, but does not include such gains and losses which are chargeable to corporation tax under Case I of Schedule D;
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‘net foreign exchange loss’ means the excess of foreign exchange losses over foreign exchange gains arising on the disposal of currency in a relevant bank deposit by a relevant holding company, but does not include such gains and losses which are chargeable to corporation tax under Case I of Schedule D;
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‘profit and loss account’ has the same meaning as in section 81C;
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‘relevant bank deposit’ means a sum standing to the credit of a relevant holding company in a bank and which is not Irish currency;
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‘relevant holding company’ means a company―
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(a) with at least one wholly-owned subsidiary and that subsidiary derives the greater part of its income from trading activities, or
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(b) which acquires or sets up, within one year of a net foreign exchange gain being credited to its accounts, a wholly-owned subsidiary which derives the greater part of its income from trading activities.
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(2) Currency in a relevant bank deposit shall not be an asset to which section 532 applies.
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(3) An amount determined by the formula—
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A × 6
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5
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where A is the net foreign exchange gain which is credited in the profit and loss account of a relevant holding company, as reduced by so much of any loss under section 383 as is attributable to a net foreign exchange loss and which has not been deducted from any other amount of income, shall be income chargeable under Case IV of Schedule D.
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(4) This section shall not apply unless the accounts are drawn up in accordance with approved accounting standards.
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(5) An allowable loss under section 546 which is unused at the date this section comes into effect and which has arisen, or would have arisen, on the disposal of currency in a relevant bank deposit of a relevant holding company may be treated as an unused loss, at the same date, under section 383.
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(6) An allowable loss under section 546 to which subsection (5) applies may qualify for relief under section 383 or 546, but may not qualify for relief under both those provisions.”.
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(2) This section applies as respects accounting periods ending on or after 1 January 2012.
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