Section 4 Interpretation of Corporation Tax Acts
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(1) In the Corporation Tax Acts, except where the context otherwise requires-
"accounting date" means the date to which a company makes up its accounts, and "period of account" means the period for which a company does so;
"allowable loss" does not include, for the purposes of corporation tax in respect of chargeable gains, a loss accruing to a company in such circumstances that if a gain accrued the company would be exempt from corporation tax in respect of the gain;
"branch or agency" means any factorship, agency, receivership, branch or management;
"chargeable gain" has the same meaning as in the Capital Gains Tax Acts, but does not include a gain accruing on a disposal made before the 6th day of April, 1976;
"charges on income" has the meaning assigned to it by section 243(1);
"close company" has the meaning assigned to it by sections 430 and 431;
"company" means any body corporate and includes a trustee savings bank within the meaning of the Trustee Savings Banks Act, 1989, but does not include-
(a) [the Health Service Executive]1,
(b) a grouping within the meaning of section 1014,
(c) a vocational educational committee established under the Vocational Education Act, 1930,
(d) a committee of agriculture established under the Agriculture Act, 1931, or
(e) a local authority, and for this purpose "local authority" has the meaning assigned to it by section 2(2) of the Local Government Act, 1941, and includes a body established under the Local Government Services (Corporate Bodies) Act, 1971;
"distribution" has the meaning assigned to it by Chapter 2 of Part 6 and [sections 436 and 437 and subsection (2)(b) of section 816]2;
"the financial year" followed by a reference to the year 1996 or any other year means the year beginning on the 1st day of January of such year;
"franked investment income" and "franked payment" shall be construed in accordance with section 156;
["generally accepted accounting practice" means-
(a) in relation to the affairs of a company or other entity that prepares accounts (in this section referred to as "IAS accounts") in accordance with international accounting standards, generally accepted accounting practice with respect to such accounts;]3
(b) in any other case, Irish generally accepted accounting practice;
"group relief" has the meaning assigned to it by section 411;
"interest" means both annual or yearly interest and interest other than annual or yearly interest;
["international accounting standards" means the international accounting standards, within the meaning of Regulation (EC) No. 1606/2002 of the European Parliament and the Council of 19 July 2002 on the application of international accounting standards (in this section referred to as "the Regulation");
"Irish generally accepted accounting practice" means generally accepted accounting practice with respect to accounts (other than IAS accounts) of companies incorporated or formed under the laws of the State, being accounts that are intended to give a true and fair view;]4
"preference dividend" means a dividend payable on a preferred share or preferred stock at a fixed rate per cent or, where a dividend is payable on a preferred share or preferred stock partly at a fixed rate per cent and partly at a variable rate, such part of that dividend as is payable at a fixed rate per cent;
"profits" means income and chargeable gains;
["SE" means a European public limited-liability company (Societas Europaea or SE) as provided for by Council Regulation (EC) No. 2157/2001 of 8 October 2001, on the Statute for a European Company (SE) (OJ No. L 294, 10.11.2001, p. 1);
"SCE" means a European Cooperative Society (SCE) as provided for by Council Regulation (EC) No. 1435/2003 of 22 July 2003 on the Statute for a European Cooperative Society (SCE)(OJ No. L 207, 18.8.2003, p. 1);]5
["standard credit rate" for a year of assessment means-
(a) for the year of assessment 1997-98-
(i) 21 per cent where it has application in relation to a distribution made or treated as having been made by a company before the 3rd day of December, 1997, and
(ii) 11 per cent where it has application in relation to a distribution made or treated as having been made by a company on or after the 3rd day of December, 1997,
and
(b) for the year of assessment 1998-99, 11 per cent,
and, accordingly, "standard credit rate per cent" for the year of assessment 1997-98 means 21 or 11, as the case may be, and for the year of assessment 1998-99 means 11;]6
"standard rate per cent" for a year of assessment means 26 where the standard rate for that year is 26 per cent and similarly as regards any reference to the standard rate per cent for a year of assessment for which the standard rate is other than 26 per cent;
"trade" includes vocation and includes also an office or employment.
Amendments
1 Substituted by Finance Act 2005 section 147 and Schedule 6 para 1(a).
2 Substituted by Finance Act 1998 section 43(1)(b) as respects shares issued by a company on or after 3 December 1997.
3 Definition of "generally accepted accounting practice" inserted by Finance Act 2005 section 40(1)(a)(i)(I) as respects any period of account beginning on or after 1 January 2005.
4 Definitions of "International accounting standards" and "Irish generally accepted accounting practice" inserted by Finance Act 2005 section 40(1)(a)(i)(II) as respects any period of account begining on or after 1 January 2005.
5 Definitions of "SE" and "SCE" inserted by Finance Act 2006 section 60(a).
6 Definition of "standard credit rate" substituted by Finance Act 1998 section 51(1) as on and from 3 December 1997.
(2) Except where otherwise provided by the Corporation Tax Acts and except where the context otherwise requires, words and expressions used in the Income Tax Acts have the same meaning in the Corporation Tax Acts as in those Acts; but no provision of the Corporation Tax Acts as to the interpretation of any word or expression, other than a provision expressed to extend to the use of that word or expression in the Income Tax Acts, shall be taken to affect its meaning in those Acts as they apply for the purposes of corporation tax.
Do income tax definitions apply for corporation tax?
(2) The income tax definitions which extend to corporation tax are not confined to those listed in section 3(1). Other definitions expressed elsewhere in the Taxes Consolidation Act 1997 for income tax (usually for specific purposes) also extend to c...
(3) References in the Corporation Tax Acts to distributions or payments received by a company apply to any distributions or payments received by another person on behalf of or in trust for the company but not to any distributions or payments received by the company on behalf of or in trust for another person.
(4) References in the Corporation Tax Acts to-
(a) profits brought into charge to corporation tax are references to the amount of those profits chargeable to corporation tax before any deduction from those profits for charges on income, expenses of management or other amounts which can be deducted from or set against or treated as reducing profits of more than one description,
(b) total income brought into charge to corporation tax are references to the amount, calculated before any deduction mentioned in paragraph (a), of the total income from all sources included in any profits brought into charge to corporation tax, and
(c) an amount of profits on which corporation tax falls finally to be borne are references to the amount of those profits after making all deductions and giving all reliefs that for the purposes of corporation tax are made or given from or against those profits, including deductions and reliefs which under any provision are treated as reducing them for those purposes.
What does "profits brought into charge to corporation tax" mean?
(4) For corporation tax purposes, your profits brought into charge to corporation tax are your profits before charges on income, management expenses, and any other items which are deductible from total profits (for example, certain trading losses or ...
(5) For the purposes of the Corporation Tax Acts, except where otherwise provided, dividends shall be treated as paid on the date when they become due and payable.
(6) Except where otherwise provided by the Corporation Tax Acts, any apportionment to different periods to be made under the Corporation Tax Acts shall be made on a time basis according to the respective lengths of those periods.
(7) For the purposes of this section, where the European Commission in accordance with the Regulation adopts an international accounting standard with modifications, then as regards matters covered by that standard-
(a) generally accepted accounting practice with respect to IAS accounts shall be regarded as permitting the use of the standard either with or without the modifications, and
(b) accounts prepared on either basis shall be regarded as prepared in accordance with international accounting standards.
Amendments
Subs (7) inserted by Finance Act 2005 section 48(1)(a)(ii) as respects any period account beginning on or after 1 January 2005.
How are accounts prepared under an international accounting standard (IAS) adopted by the European Commission treated?
(7) Where the EU adopts an IAS subject to some modification, generally accepted accounting practice (GAAP) in relation to IAS accounts is regarded as allowing the IAS standard with or without the modification. Accounts prepared on either basis will b...
