Section 449 Credit for foreign tax not otherwise credited
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(1) In this section-
"an amount receivable from the sale of goods" means an amount which-
(a) being an amount receivable from the sale of computer software, or
(b) by virtue of section 443(10)(b)(ii), 445(9)(b) or 446(10)(b),
is regarded as receivable from the sale of goods for the purposes of relief under this Part;
"relevant foreign tax", where borne by a company in respect of an amount receivable from the sale of goods, means tax-
(a) which under the laws of any foreign territory has been deducted from that amount,
(b) which corresponds to income tax or corporation tax,
(c) which has not been repaid to the company, ...1
(d) for which credit is not allowable under arrangements within the meaning of [Schedule 24, and]2
[(e) which is not treated under Schedule 24 as reducing the amount of any income;]3
"the total amount receivable from the sale of goods", in relation to a company in the course of a trade in a relevant accounting period, means the aggregate of amounts, receivable by the company in the course of the trade in the relevant accounting period, which are regarded by virtue of this Part as receivable from the sale of goods for the purposes of relief under this Part.
Amendments
1 Deleted by Finance Act 1998 section 59(a).
2 Substituted by Finance Act 1998 section 59(b).
3 Inserted by Finance Act 1998 section 59(c).
How is foreign tax withheld by non-tax treaty countries treated for manufacturing relief?
(1) Because Ireland's tax treaty network is not as comprehensive as that of countries with which Ireland competes for inward investment from multinational corporations, foreign tax (withheld by non-tax treaty countries (relevant foreign tax)) suffere...
(2) For the purposes of this section-
(a) the amount of the corporation tax which apart from subsection (3) would be payable by a company and which is attributable to an amount receivable from the sale of goods shall be an amount equal to 10 per cent of the amount of the income of the company referable to the amount so receivable [reduced by the relevant foreign tax]1;
(b) the amount of any income of a company referable to an amount receivable from the sale of goods in the course of a trade in a relevant accounting period shall, subject to paragraph 4(5) of Schedule 24, be taken to be such sum as bears to the total amount of the income of the company from the sale of goods in the course of the trade for the relevant accounting period [increased by the amount of the relevant foreign tax,]2 the same proportion as the amount receivable from the sale of goods bears to the total amount receivable by the company from the sale of goods in the course of the trade in the relevant accounting period;
(c) the total amount of income of a company from the sale of goods in the course of a trade in a relevant accounting period shall be taken to be the sum referred to in subsection (3) of section 448, which for the purposes of subsection (2) of that section is to be taken to be the income of the trade for the relevant accounting period referred to in the expression "the income from the sale of those goods" in subsection (2) of that section.
Amendments
1 Inserted by Finance Act 2003 section 60(1)(a) as respects accounting periods ending on or after 6 February 2003.
2 Inserted by Finance Act 2003 section 60(1)(b) as respects accounting periods ending on or after 6 February 2003.
How is the allowable tax credit that was withheld by non-treaty countries calculated for manufacturing relief?
(2) To calculate the credit, the company must first compute the part of its Irish 10% taxed income that has been doubly taxed. This is calculated as 10% of the company's Irish 10% taxed income (reduced by the relevant foreign tax)....
(3) The amount of corporation tax which apart from this subsection would be payable by a company for a relevant accounting period shall be reduced by so much of nine-tenths of any relevant foreign tax borne by the company in respect of an amount receivable from the sale of goods in that period in the course of a trade as does not exceed the corporation tax which would be so payable and which is attributable to the amount receivable from the sale of goods.
(4) ...
Amendments
Subs (4) deleted by Finance Act 2000 section 83(1)(e) as respects accounting periods beginning after 1 April 2000.
