IE-2012-act-9 — Finance Act 2012

PART 1 Income Levy, Universal Social Charge, Income Tax, Corporation Tax and Capital Gains Tax – Chapter 1 Interpretation Interpretation ( Part 1 ). 1 .— In this Part “Principal Act” means the Taxes Consolidation Act 1997 . PART 1 Income Levy, Universal Social Charge, Income Tax, Corporation Tax and Capital Gains Tax – Chapter 2 Universal Social Charge Universal social charge: miscellaneous amendments. 2 .— (1) The Principal Act is amended in the Table to subsection (1) of section 531AM— ( a ) in paragraph ( a )(ii) by inserting “except where such shares were held by an employee share ownership trust, approved in accordance with Schedule 12, before 1 January 2011,” after “Chapter 1 of Part 17,”, ( b ) in paragraph ( a )(iii) by deleting “and”, ( c ) by substituting the following for paragraph ( a )(iv): “(iv) any gain exempted from income tax by virtue of section 519A(3) or 519D(3) after such a gain is reduced by the market value of the right referred to in subparagraph (iii), and”, ( d ) by inserting the following after paragraph ( a )(iv): “(v) the ‘specified amount’ as defined in section 825C,”, ( e ) in paragraph ( a )(III) by substituting “PAYE Regulations, and” for “PAYE Regulations”, ( f ) in paragraph ( a )(IV) by substituting “Schedule 3.” for “Schedule 3, and”, ( g ) by deleting paragraph ( a )(V), ( h ) in paragraph ( b )(ii)— (i) by substituting “(IV)” for “(V)”, and (ii) by deleting “(iv)”, ( i ) in paragraph ( b )(vi) by substituting “section 531AU(1),” for “section 531AU(1), and”, ( j ) in paragraph ( b )(vii) by substituting “section 531AU(2), and” for “section 531AU(2),”, and ( k ) by inserting the following after paragraph ( b )(vii): “(viii) where section 372AP applies in respect of an individual, the amount that the individual is deemed to have received as rent in accordance with subsection (7) of that section where the individual received, or was entitled to receive, the deduction referred to in subsection (2) of that section on or after 1 January 2012,”. (2) The Principal Act is amended in section 531AM(2) by substituting “€10,036” for “€4,004”. (3) The Principal Act is amended in section 531AN— ( a ) by inserting the following after subsection (2): “(2A) For the purposes of subsection (2), relevant income shall not include any amount in respect of which an individual is chargeable to tax under Schedule E in accordance with section 128(2).”, ( b ) in subsection (3) by substituting “Council Regulation (EC) No. 883/2004 of 29 April 2004 1 ” for “Council Regulation (EEC) No. 1408/71 of 14 June 1971”, ( c ) by inserting the following after subsection (3): “(3A) Where an individual is chargeable to income tax under Case IV of Schedule D in respect of an encashment amount, or a deemed encashment amount, as the case may be, under section 787TA, then— ( a ) notwithstanding subsection (1) and the Table to this section, the individual shall be charged to universal social charge for the tax year in which the income tax is charged on the full amount so charged to income tax at the rate of 4 per cent, and ( b ) the amount so chargeable to income tax shall not be regarded as relevant income for the purposes of subsection (2).”, and ( d ) in subsection (4) by substituting “subsections (2), (2A), (3) and (3A)( b )” for “subsections (2) and (3)”. (4) The Principal Act is amended in section 531AO— ( a ) by deleting subsections (2) to (12), and ( b ) by inserting the following after subsection (1): “(1A) Where— ( a ) an employer pays relevant emoluments to an employee in the form of shares (including stock), or ( b ) an employee realises a gain by the exercise of a right in accordance with the provisions of a scheme approved under Schedule 12A, and where, by reason of an insufficiency of payments actually made to or on behalf of the employee, the employer is unable to deduct the amount (or full amount) of the universal social charge required to be deducted under this Part and regulations made under this Part in respect of those shares or that gain, as the case may be, that employer shall be entitled to withhold and to realise sufficient shares to meet that universal social charge liability. (1B) Where subsection (1A) applies— ( a ) the employee shall allow such withholding as is referred to in that subsection, and ( b ) the employer shall be acquitted and discharged of so much of the universal social charge liability as is represented by the shares withheld as if the value of those shares had been paid to the employee. (1C) Subsection (1A) shall not apply where the employee has otherwise made good to the employer the amount of the universal social charge required to be deducted under this Part and regulations made under this Part in respect of those shares or that gain, as the case may be, as is referred to in that subsection.”. (5) The Principal Act is amended by deleting sections 531AP and 531AQ. (6) The Principal Act is amended in section 531AS by inserting the following after subsection (1): “(1A) For the purposes of subsection (1) and, as respects a gain realised by an individual by the exercise of a right to acquire shares in a company, section 128B shall, with any necessary modifications, apply to universal social charge as it applies to income tax and for this purpose— ( a ) ‘relevant tax’ as referred to in section 128B shall include universal social charge, ( b ) ‘B’ in the formula in section 128B(2) shall be the percentage which is equal to the highest rate set out in column (2) or (3), as the case may be, of the Table to section 531AN that is in force for the tax year in which the individual realises a gain by the exercise of a right to acquire shares in a company, and ( c ) where the Revenue Commissioners are satisfied that the individual is likely to be chargeable to universal social charge for a tax year at a rate other than whichever of the rates set out in column (2) or (3), as the case may be, of the Table to section 531AN is the highest such rate, section 128B(14) shall apply as if the reference to the standard rate was a reference to that other rate.”. (7) The Principal Act is amended in section 531AT by substituting the following for subsection (2): “(2) Subsections (3) and (4) of section 531AS, as they relate to the aggregation of universal social charge and income tax, shall apply for the purposes of this section, with any necessary modifications, as they apply to universal social charge due and payable by a chargeable person and as if ‘For the purposes of subsection (2)’ were deleted in subsection (4).”. (8) The Principal Act is amended by inserting the following after section 531AU: “Universal social charge and approved profit sharing schemes. 531AUA.— Where universal social charge is charged on the initial market value of shares in accordance with subparagraph ( a )(ii) of the Table to section 531AM(1), it shall not be charged— ( a ) where there is a disposal of shares, or a deemed disposal of shares, as referred to in subsections (2) and (7), respectively, of section 512, on the appropriate percentage of the locked-in value of those shares as construed in accordance with subsection (1) of that section, or ( b ) where there is a capital receipt within the meaning of section 513(1), on the appropriate percentage of the amount or value, as the case may be, of that capital receipt.”. (9) The Principal Act is amended in section 531AAA— ( a ) by substituting the following for paragraph ( a ): “( a ) Chapter 1 of Part 38, in relation to the making of returns of income, and Chapter 4 of that Part, in relation to the making of enquiries and the exercise of the powers, duties and responsibilities provided for by that Chapter,”, and ( b ) in paragraphs ( b ) and ( c ) by substituting “Chapters” for “Chapter”. (10) The Principal Act is amended in section 531AAB— ( a ) in paragraph ( q ) by deleting “and” where it last occurs, ( b ) in paragraph ( r ) by substituting “appeal;” for “appeal.”, and ( c ) by inserting the following after paragraph ( r ): “( s ) with respect to the deduction, collection and recovery of amounts to be accounted for in respect of notional payments, and ( t ) for the making available by the Revenue Commissioners of an electronic system or systems to allow employers and employees to fulfil their obligations under this Chapter and regulations made under this Chapter and to allow for electronic communications between the Revenue Commissioners, officers of the Revenue Commissioners, employers, employees and other persons pursuant to obligations under those provisions and for the provision of enhancements or other changes to that system or those systems, as the case may be, and for any replacement for such system or systems.”. (11) The Principal Act is amended by inserting the following after section 531AAE (inserted by section 3 ): “Delegation of functions and discharge of functions by electronic means. 531AAF.— Any act to be performed or function to be discharged by the Revenue Commissioners that is authorised or required by this Part or by regulations made under this Part may be performed or discharged by any one or more of their officers acting under their authority or may, if appropriate, be performed or discharged through such electronic systems as the Revenue Commissioners may put in place for the time being for any such purpose.”. (12) Paragraphs (a) , (c) and (h)(ii) of subsection (1) , (a) , (b) and (d) of subsection (3) and subsections (7) , (8) and (9) shall be deemed to have had effect as on and from 1 January 2011. (13) Subsection (2) has effect as respects the liability of an individual to universal social charge for the year of assessment 2012 and each subsequent year. Universal social charge: surcharge on use of property incentives. 3 .— (1) Part 18D of the Principal Act is amended by inserting the following after section 531AAD: “Property relief surcharge. 531AAE.— (1) In this section— ‘aggregate of the specified property reliefs’, in relation to a tax year and an individual, means the aggregate of the amounts of specified property reliefs used by the individual in respect of the tax year; ‘amount of specified property relief’, in relation to a specified relief used by an individual in respect of a tax year, means the amount of the specified property relief used by the individual in respect of the tax year, determined by reference to the entry in column (3) of Schedule 25B opposite the reference to the specified relief concerned in column (2) of that Schedule; ‘area-based capital allowance’, in relation to a tax year and an individual, means any allowance, or part of such allowance, made under Chapter 1 of Part 9 as that Chapter is applied— ( a ) by section 323, 331, 332, 341, 342, 343, 344, 352, 353, 372C, 372D, 372M, 372N, 372V, 372W, 372AC or 372AD, or ( b ) by virtue of paragraph 11 of Schedule 32, for the tax year, including any such allowance, or part of any such allowance, made for a previous tax year and carried forward from that previous tax year in accordance with Part 9; ‘balancing allowance’ means any allowance made under section 274; ‘specified capital allowance’, in relation to a tax year and an individual, means any specified relief that is— ( a ) a writing down allowance or a balancing allowance made for the tax year, or ( b ) an allowance, or part of such allowance, made under Chapter 1 of Part 9 as that Chapter is applied by section 372AX, 372AY, 843 or 843A for the tax year, including any such allowance or part of such allowance made for a previous tax year and carried forward from that tax year in accordance with Part 9; ‘specified individual’, in relation to a tax year, means an individual whose aggregate income for the tax year is €100,000 or more; ‘specified property relief’, in relation to a tax year and an individual, means— ( a ) any allowance, or part of any allowance, specified in the definition of ‘area-based capital allowance’ or ‘specified capital allowance’, as the case may be, or ( b ) any eligible expenditure within the meaning of Chapter 11 of Part 10, to which section 372AP applies, which is to be taken into account in computing under section 97(1) a deficiency in respect of any rent from a qualifying premises or a special qualifying premises, within the meaning of section 372AK; ‘specified relief’, in relation to a tax year and an individual, means any relief arising under, or by virtue of, any of the provisions set out in column (2) of Schedule 25B; ‘writing down allowance’ means any allowance made under section 272 and includes any such allowance as increased under section 273. (2) Any reference in this section to any specified property relief being used in respect of any tax year shall be a reference to that part of that specified property relief to which full effect has been given for that tax year. (3) The amount of universal social charge which is to be charged on the aggregate income for the tax year concerned of a specified individual under this Part shall be increased by an amount equal to 5 per cent of that part of that aggregate income in relation to which an amount of specified property relief or, as the case may be, the aggregate of the specified property reliefs, has been used by the specified individual in that tax year. (4) For the purposes of this section— ( a ) section 485C(3) and Schedule 25C (as if the references to the tax years 2006 and 2007 in that Schedule were references to the tax years 2011 and 2012, respectively) shall apply in determining the amount of any specified property relief to be carried forward from any tax year to each subsequent tax year, and ( b ) any specified relief, which is a specified property relief, shall be treated as used in any tax year in priority to a specified relief which is not a specified property relief. (5) Where universal social charge is payable for the tax year 2012 in respect of a specified individual’s aggregate income for a tax year, being an individual who is a chargeable person (within the meaning of Part 41), section 958 shall apply and have effect as if, in accordance with this section, universal social charge had been payable for the tax year 2011.”. (2) Subsection (1) applies for the year of assessment 2012 and each subsequent year of assessment. PART 1 Income Levy, Universal Social Charge, Income Tax, Corporation Tax and Capital Gains Tax – Chapter 3 Income Levy and Income Tax Share-based remuneration. 4 .— (1) The Principal Act is amended— ( a ) in section 128A(4A)( d )(i)(II) by substituting “half of the aggregate” for “the aggregate”, ( b ) in section 128E(6)( a ) by substituting “for the purposes of income tax, income levy and universal social charge” for “income tax purposes”, and ( c ) in section 985A by inserting the following after subsection (4A): “(4B) Where— ( a ) an employer pays emoluments to an employee in the form of shares (including stock), ( b ) subsection (4) applies, and ( c ) the employee has not made good to the employer the amount of the income tax required to be deducted under this Part and regulations made under this Part in respect of those shares, then— (i) the employer shall be entitled to withhold and to realise sufficient shares to meet that income tax liability, (ii) the employee shall allow such withholding as is referred to in paragraph (i), and (iii) the employer shall be acquitted and discharged of such withholding as if the amount of income tax required to be deducted had been paid to the employee.”. (2) Paragraph (b) of subsection (1) shall be deemed to have effect as on and from— ( a ) 1 January 2009 in the case of income levy, ( b ) 1 January 2011 in the case of universal social charge, and ( c ) 1 January 2012 in the case of income tax. Amendment of Schedule 23A (specified occupations and professions) to Principal Act. 5 .— (1) Schedule 23A to the Principal Act is amended by inserting “Cricketer” after “Boxer”. (2) This section applies for the year of assessment 2012 and subsequent years of assessment. Amendment of section 470B (age-related relief for health insurance premiums) of Principal Act, etc. 6 .— (1) Section 470B of the Principal Act is amended in subsection (4)— ( a ) in subparagraph (i) by substituting “1 January 2013” for “1 January 2012”, ( b ) in clause (II) by inserting “but before 1 January 2011” after “2010”, ( c ) in clause (III) by inserting “but before 1 January 2012” after “2011”, ( d ) in clause (III) by substituting “such total annual premium,” for “such total annual premium, and”, ( e ) by inserting the following after clause (III): “(III a ) as respects a relevant contract renewed or entered into on or after 1 January 2012, the amount specified in column (5) of the Table to this subsection corresponding to the class of insured person mentioned in column (1) of that Table or, where the payment made to the authorised insurer is a monthly or other instalment towards the payment of the total annual premium due under the relevant contract, an amount equal to the amount so specified divided by the total number of instalments to be made to pay such total annual premium, and”, and ( f ) by substituting the following for the Table to that subsection: “TABLE Class of insured person Amount of age-related tax credit Amount of age-related tax credit Amount of age-related tax credit Amount of age-related tax credit (1) (2) (3) (4) (5) Aged 50 years and over but less than 55 years on the date the relevant contract is renewed or entered into, as the case may be. €200.00 €200.00 Nil Nil Aged 55 years and over but less than 60 years on the date the relevant contract is renewed or entered into, as the case may be. €200.00 €200.00 Nil Nil Aged 60 years and over but less than 65 years on the date the relevant contract is renewed or entered into, as the case may be. €500.00 €525.00 €625.00 €600.00 Aged 65 years and over but less than 70 years on the date the relevant contract is renewed or entered into, as the case may be. €500.00 €525.00 €625.00 €975.00 Aged 70 years and over but less than 75 years on the date the relevant contract is renewed or entered into, as the case may be. €950.00 €975.00 €1,275.00 €1,400.00 Aged 75 years and over but less than 80 years on the date the relevant contract is renewed or entered into, as the case may be. €950.00 €975.00 €1,275.00 €2,025.00 Aged 80 years and over but less than 85 years on the date the relevant contract is renewed or entered into, as the case may be. €1,175.00 €1,250.00 €1,725.00 €2,400.00 Aged 85 years and over on the date the relevant contract is renewed or entered into, as the case may be. €1,175.00 €1,250.00 €1,725.00 €2,700.00 ”. (2) The amendment to section 470B by section 5 ( c ) of the Health Insurance (Miscellaneous Provisions) Act 2011 shall be deemed never to have been enacted. Amendment of section 126 (tax treatment of certain benefits payable under Social Welfare Acts) of Principal Act. 7 .— Section 126 of the Principal Act is amended for the year of assessment 2012 and each subsequent year of assessment by deleting subsection (5). Relief for key employees engaged in research and development activities. 8 .— The Principal Act is amended in Chapter 1 of Part 15 by inserting the following after section 472C: “472D.— (1) In this section— ‘associated company’, in relation to a relevant employer, means a company which is that employer’s associated company within the meaning of section 432; ‘control’ has the same meaning as in section 432; ‘emoluments’ has the same meaning as in Chapter 4 of Part 42; ‘key employee’ means an individual— ( a ) who— (i) is not, and has not been, a director of his or her employer or an associated company and is not connected to such a director, (ii) does not, and did not, have a material interest in his or her employer or an associated company and is not connected to a person who has such a material interest, and (iii) in the accounting period for which his or her employer was entitled to claim relief under section 766(2), performed 75 per cent or more of the duties of his or her employment in the conception or creation of new knowledge, products, processes, methods or systems, and ( b ) 75 per cent or more of the cost of the emoluments that arise from his or her employment with that relevant employer qualify as expenditure on research and development under section 766(1)( a ) in the accounting period referred to in paragraph ( a )(iii); ‘material interest’, in relation to a company, means the beneficial ownership of or ability to control, directly or through the medium of a connected company or connected companies or by any other indirect means, more than 5 percent of the ordinary share capital of the company; ‘ordinary share capital’, in relation to a company, means all the issued share capital (by whatever name called) of the company; ‘relevant emoluments’ means emoluments paid by a relevant employer to a key employee; ‘relevant employer’ means a company that is entitled to relief under section 766(2) and that employs a key employee; ‘tax year’ means a year of assessment for income tax purposes. (2) ( a ) Where under section 766(2A) a relevant employer surrenders an amount for the benefit of a key employee, then subject to subsection (3), on the making of a claim, that employee shall be entitled for a tax year to have the income tax charged on his or her relevant emoluments for that tax year reduced by the amount surrendered. ( b ) The tax year referred to in paragraph ( a ) is the tax year following the tax year during which the accounting period of the relevant employer ends in respect of which the amount surrendered under section 766(2A) relates. ( c ) Notwithstanding that, for the tax year for which a claim is made under this section, an employee is no longer a key employee of the company that surrendered an amount referred to in paragraph ( a ) but is an employee of that company, then he or she shall be entitled to have the income tax charged on emoluments from that company for that tax year reduced by the amount so referred to, or the balance of that amount, as appropriate. (3) ( a ) Notwithstanding subsection (2), the amount surrendered under section 766(2A) shall not for any tax year reduce the amount of income tax payable on the total income of a key employee including, where section 1017 or 1019 apply, on the total income of his or her spouse or his or her civil partner to not less than the income tax that would be charged if such total income were charged to income tax at a rate of 23 per cent. ( b ) Paragraph ( a ) also applies where subsection (2) and paragraph ( a ) or ( b ) of subsection (4) applies for the same tax year. (4) ( a ) Where, by virtue of subsection (3), part of the amount surrendered under section 766(2A) by a relevant employer to a key employee cannot be used by that employee to reduce the income tax charged on his or her relevant emoluments for the tax year referred to in subsection (2)( b ), that employee shall be entitled to have the income tax charged on his or her relevant emoluments for the next tax year reduced by that part. ( b ) If and so far as any part of the amount surrendered by a relevant employer under section 766(2A) to a key employee carried forward under paragraph ( a ) to the next tax year cannot be used in that next tax year, then it may be used in the next following tax year and so on for each succeeding tax year until the full amount of that part has been used or until the key employee referred to in paragraph ( a ) ceases to be an employee of the relevant employer that surrendered the amount under section 766(2A). (5) The amount that a relevant employer is entitled to surrender, and so surrenders, under section 766(2A) to a key employee is exempt from income tax and shall not be reckoned in computing income for the purposes of the Income Tax Acts. (6) No reduction shall be given under this section unless all tax deducted from emoluments paid by the relevant employer to the key employee for the tax year to which the claim relates has been remitted by the relevant employer to the Collector-General in accordance with regulations made under Chapter 4 of Part 42. (7) Notwithstanding anything contained in this section, where for any tax year that the income tax charged on the emoluments of an individual is reduced by any part of an amount surrendered by his or her employer under section 766(2A) and it is found subsequently that that individual is not for any reason (including that the initial amount, within the meaning of section 766(2C), is not authorised by section 766) entitled to that reduction, or part of that reduction, then that individual shall pay to the Revenue Commissioners an amount of tax equal to that reduction, or equal to part of that reduction, as appropriate, of income tax granted under this section for that tax year. (8) Notwithstanding the obligation on a company under section 766(2C) to notify a key employee of a relevant authorised amount (within the meaning of that section), where such notification is not received by the key employee, subsection (6) shall apply as if such notification had been received. (9) Where for a tax year, an individual makes a claim for relief under this section, the individual shall, notwithstanding anything to the contrary in section 950 or 1084, be deemed for that tax year to be a chargeable person for the purposes of Part 41.”. Amendment of section 244 (relief for interest paid on certain home loans) of Principal Act. 9 .— As respects the year of assessment 2012 and subsequent years of assessment, section 244 of the Principal Act is amended— ( a ) in subsection (1)( a ), in the definition of “relievable interest”, by substituting “31 December 2012” for “31 December 2011”, ( b ) in subsection (1A) by substituting the following for paragraph ( b ): “( b ) Notwithstanding paragraph ( a ), this section shall continue to apply for the year of assessment 2010 and subsequent years of assessment up to and including the year of assessment 2017 in respect of qualifying interest paid in respect of a qualifying loan taken out on or after 1 January 2004 and on or before 31 December 2012.”, ( c ) in subsection (1A)( c )(i) by substituting “paragraph ( b )” for “paragraph ( b )(i) or (ii)”, ( d ) in subsection (2)( a )(i) by substituting “subsection (1A)( b )” for “subsection (1A)( b )(i)”, and ( e ) in subsection (2)( a ) by substituting the following for sub-paragraph (ii): “(ii) notwithstanding subparagraph (i), 30 per cent for the year of assessment 2012 and subsequent years of assessment up to and including the year of assessment 2017 as respects qualifying interest paid on a qualifying loan taken out on or after 1 January 2004 and on or before 31 December 2008 to purchase an individual’s— (I) first qualifying residence, or (II) second or subsequent qualifying residence but only where the first qualifying residence was purchased on or after 1 January 2004.”. Amendment of section 472A (relief for the long term unemployed) of Principal Act. 10 .— As respects the year of assessment 2012 and each subsequent year of assessment, section 472A(1)( a ) of the Principal Act is amended in the definition of “qualifying individual”, in paragraph (i)(I), by substituting “and, in respect of that period of unemployment, is entitled to credited contributions in accordance with section 33 of the Act of 2005 and regulations made under that section or has been in receipt of” for “and has, in respect of that period of unemployment, been in receipt of”. Amendment of section 473A (relief for fees paid for third level education, etc.) of Principal Act. 11 .— Section 473A of the Principal Act is amended for the year of assessment 2012 and each subsequent year of assessment in subsection (4A)— ( a ) in paragraph ( a ) by substituting “€2,250” for “€2,000”, and ( b ) in paragraph ( b ) by substituting “€1,125” for “€1,000”. Deduction for income earned in certain foreign states. 12 .— (1) The Principal Act is amended— ( a ) in Part 34 by inserting the following after section 823: “823A.— (1) In this section— ‘qualifying day’, in relation to an office or employment of an individual, means a day on or after 1 January 2012 which is one of at least 4 consecutive days throughout the whole of which the individual is present in a relevant state for the purposes of the performance of the duties of the office or employment and which (taken as a whole) are substantially devoted to the performance of such duties, but no day shall be counted more than once as a qualifying day; ‘relevant office or employment’ means an office or employment part of the duties of which are performed in a relevant state on a qualifying day; ‘relevant period’, in relation to a year of assessment, means a continuous period of 12 months part only of which is comprised in the year of assessment; ‘relevant state’ means the Federative Republic of Brazil, the Russian Federation, the Republic of India, the Peoples Republic of China or the Republic of South Africa; ‘the specified amount’, in relation to a year of assessment and an individual, means an amount determined by the formula— D × E F where— D is the number of qualifying days in the year of assessment in relation to the individual, E is all the income, profits or gains that arise in the year of assessment from a relevant office or employment, whether chargeable under Schedule D or E, and includes so much of any gain to which section 128 applies on which tax is payable in the State where such gain is realised by the exercise, assignment or release of a right obtained by the individual as an office holder or employee in the relevant office or employment, after deducting any contribution or qualifying premium in respect of which there is provision for a deduction under section 774(7), 787, 787E or 787N but excluding— ( a ) any expense to which section 118 applies, ( b ) any amount treated as emoluments of an employment under section 121(2)( b )(ii) by virtue of a car being made available by reason of the employment, ( c ) any sum treated for the purposes of section 112 as a perquisite of an office or employment by virtue of section 122, ( d ) any payment to which section 123 applies, or ( e ) any sum deemed to be profits or gains arising or accruing from an office or employment by virtue of section 127(2), and F is the aggregate number of days in the year of assessment that the individual held a relevant office or employment. (2) ( a ) Subject to paragraph ( b ), this section shall apply to— (i) an office of director of a company which is within the charge to corporation tax, or would be within the charge to corporation tax if it were resident in the State, and which carries on a trade or profession, (ii) an employment other than— (I) an employment the emoluments of which are paid out of the revenue of the State, or (II) an employment with any board, authority or other similar body established by or under statute. ( b ) This section does not apply to income from an office or employment that— (i) is chargeable to tax in accordance with section 71(3), or (ii) is income to which section 472D, 822, 825A or 825C applies. (3) Where for any year of assessment an individual resident in the State makes a claim in that behalf to and satisfies an authorised officer that either— ( a ) the number of days in that year which are qualifying days in relation to an office or employment of the individual (together with any days which are qualifying days in relation to any other such office or employment of the individual), or ( b ) the number of such days referred to in paragraph ( a ) in a relevant period in relation to that year and no part of which period is comprised in any other relevant period, amounts to at least 60 days, there shall be deducted from the income, profits or gains of the individual from all offices or employments assessable under Schedule D or E, as may be appropriate, an amount equal to the specified amount in relation to that office or employment or those offices or employments but that amount, or the aggregate of those amounts where there is more than one such office or employment, shall not exceed €35,000. (4) Notwithstanding anything in the Tax Acts, the income, profits or gains from an office or employment shall for the purposes of this section be deemed not to include any amounts paid in respect of expenses in respect of which a deduction would be due under section 114. (5) Where for a year of assessment an individual is entitled to relief under Part 35 for tax paid under the laws of a relevant state on the amount of income, profits or gains from a relevant office or employment attributable to the performance of the duties of the relevant office or employment on qualifying days in that relevant state, the specified amount shall be reduced by the amount of such income, profits or gains.”, and ( b ) in Schedule 25B by inserting the following after the matter set out opposite reference number 48: “ 48A. Section 823A (deduction for income earned in certain foreign states). An amount equal to the total amount deducted from the individual ’s total income for the tax year under section 823A. ”. (2) This section shall apply as respects the years of assessment 2012, 2013 and 2014. Amendment of section 825B (repayment of tax where earnings not remitted) of Principal Act. 13 .— Part 34 of the Principal Act is amended in section 825B— ( a ) by inserting the following after subsection (1A): “(1B) This section shall not apply for the tax year 2012 or any subsequent tax year. (1C) Notwithstanding subsection (1B), this section shall continue to apply— ( a ) for the tax years 2012 and 2013 but only as respects relevant employees who had an entitlement to relief under this section for the first time in the tax year 2009, ( b ) for the tax years 2012, 2013 and 2014 but only as respects relevant employees who had an entitlement to relief under this section for the first time in the tax year 2010, and ( c ) for the tax years 2012, 2013, 2014 and 2015 but only as respects relevant employees who had an entitlement to relief under this section for the first time in the tax year 2011. (1D) Where for a tax year a relevant employee makes a claim under this section, relief shall not be given under section 823A, 825C or 472D for that tax year.”, and ( b ) in subsection (5)( b ) by substituting “a reference to the end of the tax year in which the emoluments were remitted for the reference to the end of the tax year to which the assessment relates” for “a reference to the end of the tax year in which the emoluments were received for the reference to the end of the tax year in which the emoluments were remitted”. Special assignee relief programme. 14 .— The Principal Act is amended in Part 34 by inserting the following after section 825B: “825C.— (1) In this section— ‘associated company’, in relation to a relevant employer, means a company which is the relevant employer’s associated company within the meaning of section 432; ‘relevant employer’ means a company that is incorporated, and tax resident, in a country or jurisdiction with the government of which arrangements are for the time being in force by virtue of subsection (1) or (1B) of section 826; ‘relevant employment’, in relation to a relevant employee, means an employment held by the relevant employee with a relevant employer; ‘relevant income’, in relation to a relevant employee and a tax year, means the relevant employee’s income, profits or gains for a tax year from an employment with a relevant employer or with an associated company, including any specified amount for which a deduction is claimed under subsection (3) but excluding the following: ( a ) any expense to which section 118 applies; ( b ) any amount treated as emoluments of an employment under section 121(2)( b )(ii); ( c ) any sum treated for the purposes of section 112 as a perquisite of an employment by virtue of section 122; ( d ) any payment to which section 123 applies; ( e ) any sum deemed to be profits or gains arising or accruing from an employment by virtue of section 127(2); ( f ) any bonus payment, whether contractual or otherwise; ( g ) any gain to which section 128 applies; ( h ) any shares or share based remuneration provided by or on behalf of the relevant employer or associated company of the relevant employer; ‘Revenue officer’ means an officer of the Revenue Commissioners; ‘specified amount’, in relation to a relevant employee and a tax year, means an amount determined by the formula— (A-B) × 30 per cent where— A is the amount of the relevant employee’s income, profits or gains from his or her employment with a relevant employer or associated company for the tax year, excluding any amount that is not assessed to tax in the State, and after deducting any contribution or qualifying premium in respect of which there is provision for a deduction under section 774(7), 787, 787E or 787N, but where this amount exceeds €500,000, A shall be €500,000 (in this section referred to as the ‘upper threshold’), and B is €75,000 (in this section referred to as the ‘lower threshold’); ‘tax year’ means a year of assessment for income tax purposes. (2) ( a ) In this section ‘relevant employee’ means an individual who— (i) for the whole of the 12 months immediately before his or her arrival in the State was a full time employee of a relevant employer and exercised the duties of his or her employment for that relevant employer outside the State, (ii) arrives in the State in any of the tax years 2012, 2013 or 2014, at the request of his or her relevant employer to— (I) perform in the State the duties of his or her employment for that employer, or (II) to take up employment in the State with an associated company, (iii) performs the duties of his or her employment in the State for that relevant employer or for that associated company, as appropriate, for a minimum period of 12 consecutive months from the date he or she takes up residence in the State, and (iv) was not resident in the State for the 5 tax years immediately preceding the tax year in which he or she first arrives in the State for the purposes of performing the duties referred to in subparagraph (iii). ( b ) In determining whether the duties of an employment are performed in the State, any duties performed outside the State, the performance of which is merely incidental to the performance of those duties in the State, shall be treated as having been performed in the State. (3) ( a ) Where, for a tax year, a relevant employee— (i) is resident in the State for tax purposes and is not resident elsewhere, (ii) performs in the State the duties of his or her employment with a relevant employer or the duties of an employment with an associated company, and (iii) has relevant income from his or her relevant employer or from the associated company which is not less than €75,000, and makes a claim in that behalf, then that relevant employee shall be entitled, in respect of each of the 5 consecutive tax years commencing with the tax year for which he or she is first entitled to relief under this section, to have an amount of income, profits or gains from his or her employment with a relevant employer or from his or her employment with an associated company equal to the specified amount deducted from the income, profits or gains to be assessed on that relevant employee. ( b ) A claim made under this section shall be accompanied by a certificate from a relevant employer or associated company, as the case may be, confirming that the conditions set out in subparagraphs (i), (ii) and (iii) of subsection (2)( a ) are satisfied. (4) A relevant employee shall be first entitled to claim relief under this section only for— ( a ) the first tax year in which he or she arrives in the State for the purposes set out in subsection (2)( a )(ii) provided that for that tax year he or she is resident in the State for tax purposes and not resident elsewhere, ( b ) if not resident in the State for tax purposes for that first tax year, the tax year following that first year provided that for that following tax year he or she is resident in the State and not resident elsewhere, or ( c ) where in that first tax year, he or she is resident in the State for tax purposes and is also resident elsewhere, the tax year following that first tax year provided that for that following tax year he or she is resident in the State for tax purposes and not resident elsewhere. (5) Where a relevant employee performs in the State the duties of a relevant employment or the duties of an employment with an associated company for less than an entire tax year in respect of which a claim under this section is made, the upper and lower thresholds and the amount of relevant income shall be reduced proportionately. (6) In any tax year in which a relevant employee is entitled to make a claim for relief under subsection (3), the payment or reimbursement by the relevant employer or by an associated company of— ( a ) the reasonable costs associated with one return trip from the State for the relevant employee, his or her spouse or civil partner, and a child of the relevant employee or of the relevant employee’s spouse or civil partner to— (i) the country of residence of the relevant employee before his or her arrival in the State, (ii) the country of residence of the relevant employee at the time of first employment by the relevant employer, or (iii) the country of which the relevant employee or his or her spouse or civil partner is a national, and ( b ) the cost of fees, not exceeding €5,000 per annum in respect of each child of the relevant employee or each child of his or her spouse or civil partner, paid to a school established in the State and which has been approved by the Minister for Education and Skills for the purposes of providing primary or post-primary education to students, shall not be chargeable to tax. (7) Where for a tax year a relevant employee makes a claim for relief under this section— ( a ) relief shall not be given under section 823A, 825A or 472D for that tax year, and ( b ) section 71(3) shall not apply to any of the income, profits or gains from an employment with a relevant employer or with an associated company. (8) Where for a tax year a relevant employee makes a claim for relief under this section, the relevant employee shall, notwithstanding anything to the contrary in section 950 or 1084, be deemed for that tax year to be a chargeable person for the purposes of Part 41. (9) Notwithstanding the requirement on a relevant employer or associated company, as the case may be, to deduct tax under Chapter 4 of Part 42 on the specified amount, no such tax deduction need be made where, following an application by the relevant employer or associated company, as appropriate, a Revenue officer confirms in writing that no such deduction need be made. (10) Where for a tax year a relevant employer or associated company, as the case may be, certifies that an employee meets the conditions as set out in subparagraphs (i), (ii) and (iii) of subsection (2)( a ), the relevant employer or associated company shall be required to deliver to the Revenue Commissioners an annual return setting out— ( a ) in respect of each such employee— (i) the name and PPS Number, and (ii) the amount of income, profits or gains in respect of which tax was not deducted in accordance with subsection (9), and ( b ) details of the increase in the number of employees employed, or details of the number of employees retained, by the relevant employer or associated company as a result of the assignment to the State of employees who benefit under this section. (11) Where for a tax year a relevant employee is entitled to relief under Part 35 for tax paid, under the laws of a territory other than the State, on the income, profits or gains from an employment with the relevant employer or with an associated company, the amount of such income, profits or gains shall be excluded from the construction of ‘A’ in the formula in the definition of ‘specified amount’ in subsection (1). (12) Notwithstanding anything in the Tax Acts, the income, profits or gains from an employment with a relevant employer or with an associated company shall, for the purposes of this section, be deemed not to include any amounts paid in respect of expenses for which deductions would be due under section 114.”. Provisions relating to PAYE. 15 .— Chapter 4 of Part 42 of the Principal Act is amended— ( a ) in section 986(1)( m ) by substituting “appropriate,” for “appropriate.”, ( b ) in section 986(1) by inserting the following after paragraph ( m ): “( n ) for the making available by the Revenue Commissioners of an electronic system or systems to allow employers and employees to fulfil their obligations under this Chapter and regulations made under this Chapter and to allow further for electronic communications between the Revenue Commissioners, officers of the Revenue Commissioners, employers and employees and other persons pursuant to obligations under those provisions and for the provision of enhancements or other changes to that system or those systems, as the case may be, and for any replacement for any such system or systems, ( o ) for requiring every employer who makes a payment to which this Chapter applies to an employee to notify the Revenue Commissioners within the period specified in the regulations of the employee particulars specified in the regulations, ( p ) for requiring every employer who pays emoluments to which this Chapter applies exceeding the limit specified in subsection (5) to register with the Revenue Commissioners within the time limit specified in the regulations.”, ( c ) in section 987(1) by inserting the following after paragraph ( c ): “( d ) to register with the Revenue Commissioners in accordance with Regulation 7 of the Income Tax (Employment) (Consolidated) Regulations 2001 ( S.I. No. 559 of 2001 ), or ( e ) to keep and maintain a register of employees in accordance with Regulation 8 of the Income Tax (Employment) (Consolidated) Regulations 2001 ( S.I. No. 559 of 2001 ),”, ( d ) in section 990(1A)( a ) by substituting “may” for “shall” in each place, ( e ) in section 990(2) by substituting “under this section” for “under subsection (1)”, ( f ) in section 990(3) by substituting “under this section” for “under subsection (1)”, ( g ) in section 997A(4) by substituting “paid by the company in a year of assessment, the tax remitted for that year of assessment” for “paid by the company, the tax remitted”, and ( h ) in section 997A by inserting the following after subsection (6): “(7) Notwithstanding section 960G and for the purposes of the application of this section, where a company has an obligation to remit any amount by virtue of the provisions of— ( a ) the Social Welfare Consolidation Act 2005 and regulations made under that Act, as respects employment contributions, ( b ) Part 18D and regulations made under that Part, as respects universal social charge, and ( c ) this Chapter and regulations made under this Chapter, as respects income tax, any amount remitted by the company for a year of assessment shall be set— (i) firstly against employment contributions, (ii) secondly against universal social charge, and (iii) lastly against income tax. (8) Where any person is aggrieved by a decision of the Revenue Commissioners on a claim for credit for tax deducted from emoluments, in so far as that decision is made by reference to any provision of this section, the provisions of section 949 shall apply to such decision as if it were a determination on a matter referred to in section 864.”. Changes relating to tax relief for lessors, carried forward losses and balancing charges. 16 .— (1) Section 372AP of the Principal Act is amended— ( a ) in subsection (1) by deleting the definition of “relevant day”, ( b ) in subsection (1), in paragraph ( b )(ii) of the definition of “relevant period”, by substituting “after the date of such completion;” for “after the date of such completion,”, ( c ) in subsection (1), in the definition of “relevant period”, by deleting all of the words from “but in relation to a premises” to the end of the definition, ( d ) in subsection (2) by substituting “Subject to subsections (3), (4) and (5),” for “Subject to subsections (3), (4), (5), (8A), (8B) and (8C),”, ( e ) in subsection (3) by deleting paragraph ( c ), ( f ) in subsection (7) by substituting the following for “an amount as rent from that premises equal to the amount of that deduction or, as the case may be, the aggregate amount of those deductions.”: “an amount as rent from that premises equal to the amount determined by the formula— A - B where— A is the amount of the deduction or, as the case may be, the aggregate amount of the deductions under subsection (2) in respect of eligible expenditure incurred on or in relation to the premises, and B is that part of the amount of any excess (within the meaning of section 384) that is attributable to the deduction or, as the case may be, the aggregate amount of the deductions under subsection (2) in respect of eligible expenditure incurred on or in relation to the premises and which has been carried forward under section 384 to the year of assessment in which either of the events, referred to in paragraphs ( a ) and ( b ), occurs.”, ( g ) in subsection (8) by deleting paragraph ( c ), and ( h ) by deleting paragraphs (8A), (8B), (8C) and (8D). (2) Section 384 of the Principal Act is amended by inserting the following after subsection (2): “(2A) Where section 372AP(7) applies, the amount of the excess, which by virtue of subsection (2) has been carried forward to a year of assessment in which either of the events referred to in section 372AP(7) occurs, shall be reduced by the amount represented by B in the formula in that section and this section shall not apply in that year of assessment or in any subsequent year of assessment to the amount of that reduction.”. (3) Section 485C of the Principal Act is amended— ( a ) in subsection (1), in the definition of “amount of specified relief”, by inserting “but subject to subsection (1A),” after “tax year,”, and ( b ) by inserting the following after subsection (1): “(1A) Where a balancing charge is made under section 274, in relation to a building or structure, on an individual for a tax year, then— ( a ) to the extent that any unused capital allowances attributable to capital expenditure incurred on the construction or refurbishment of that building or structure, have been carried forward in accordance with section 304 or 305 to the tax year, and are used in that tax year to reduce the amount of the balancing charge, those allowances so used shall not be treated as an amount of specified relief under this Chapter, and ( b ) any amount by which the balancing charge has been reduced in the manner referred to in paragraph ( a ), shall not be taken into account for the purposes of determining the adjusted income of the individual for the tax year.”. (4) ( a ) Subsections (1)(f) and (2) apply to an event referred to in paragraph ( a ) or ( b ) of section 372AP(7) of the Principal Act that occurs on or after 1 January 2012. ( b ) Subsection (3) applies to a balancing charge (within the meaning of section 274 of the Principal Act) that is made on or after 1 January 2012. Provisions in relation to property incentives and capital allowances. 17 .— Part 12 of the Principal Act is amended by substituting the following for Chapter 4A (inserted by section 23 of the Finance Act 2011 ): “Chapter 4A Termination of carry forward of certain losses Interpretation and general (Chapter 4A). 409F.— (1) This Chapter applies notwithstanding any other provision of the Tax Acts. (2) In this Chapter— ‘active partner’ has the same meaning as in section 409A; ‘active trader’ has the same meaning as in section 409D; ‘area-based capital allowance’ means any allowance, or part of such allowance, made under Chapter 1 of Part 9 as that Chapter is applied— ( a ) by section 323, 331, 332, 341, 342, 343, 344, 352, 353, 372C, 372D, 372M, 372N, 372V, 372W, 372AC or 372AD for a chargeable period, or ( b ) by virtue of paragraph 11 of Schedule 32 for a chargeable period, including any such allowance, or part of any such allowance, made for a previous chargeable period and carried forward from that previous chargeable period in accordance with Part 9; ‘balancing allowance’ and ‘balancing charge’ mean any allowance or charge, as the case may be, made under section 274; ‘capital allowance’ means any allowance, or part of such allowance, specified in the definition of ‘area-based capital allowance’ or ‘specified capital allowance’; ‘chargeable period’ has the same meaning as in section 321 and a reference to a chargeable period or its basis period shall be construed in accordance with subsection (2) of that section; ‘relevant accounting period’ means the later of— ( a ) the accounting period which begins immediately after the accounting period in which the tax life of the building or structure has ended, or ( b ) the accounting period, or the first accounting period if there are more than one, ending in 2015; ‘relevant chargeable period’ means the later of— ( a ) the chargeable period which begins immediately after the chargeable period in which the tax life of the building or structure has ended, or ( b ) the chargeable period, or the first chargeable period if there are more than one, ending in 2015; ‘relevant tax year’ means the later of— ( a ) the tax year which begins immediately after the tax year in which the tax life of the building or structure has ended, or ( b ) the tax year 2015; ‘specified capital allowance’ means any specified relief that is— ( a ) a writing down allowance or a balancing allowance made for a chargeable period, or ( b ) an allowance, or part of such allowance, made under Chapter 1 of Part 9 as that Chapter is applied by section 372AX, 372AY, 843 or 843A for a chargeable period, including any such allowance or part of such allowance made for a previous chargeable period and carried forward from that previous chargeable period in accordance with Part 9; ‘specified relief’ has the same meaning as in section 485C; ‘tax life’, in relation to a building or structure, means the appropriate period referred to in section 272(4) in respect of that building or structure, after the end of which period no capital allowance may be made following the disposal of the relevant interest (within the meaning of section 269) in that building or structure; ‘tax year’ means a year of assessment; ‘writing down allowance’ means any allowance made under section 272 and includes any such allowance as increased under section 273. Termination of capital allowances. 409G.— (1) As respects any tax year, the amount of any specified capital allowance, in relation to a building or structure, that is available to be carried forward, in accordance with section 304 or 305, to a relevant tax year or to any subsequent tax year, shall, subject to subsections (5) and (6), be zero for all the purposes of the Tax Acts. (2) As respects any accounting period, the amount of any specified capital allowance, in relation to a building or structure, that— ( a ) is available to be carried forward to a relevant accounting period, or to any subsequent accounting period, in accordance with section 308(3), or ( b ) may be set, in accordance with section 308(4), against the profits of an accounting period preceding the relevant accounting period to which paragraph ( a ) applies, shall, subject to subsection (6), be zero for all the purposes of the Tax Acts. (3) As respects any tax year, the amount of any area-based capital allowance, in relation to a building or structure, that is available to be carried forward to a relevant tax year or to any subsequent tax year, in accordance with section 304 or 305, as those provisions are applied or modified by any other provision of the Tax Acts shall, subject to subsections (5) and (6), be zero for all the purposes of those Acts. (4) As respects any accounting period, the amount of any area-based capital allowance, in relation to a building or structure, that— ( a ) is available to be carried forward to a relevant accounting period or to any subsequent accounting period, in accordance with section 308(3), or ( b ) may be set, in accordance with section 308(4), against the profits of an accounting period preceding the relevant accounting period to which paragraph ( a ) applies, shall, subject to subsection (6), be zero for all the purposes of the Tax Acts. (5) Subsections (1) and (3) shall not apply to an individual where any capital allowance is made in taxing a trade in relation to which trade the individual is an active partner or an active trader. (6) Notwithstanding subsections (1) to (4), where in a relevant chargeable period or a subsequent chargeable period a balancing charge falls due to be made on a person in relation to any building or structure, any capital allowance in relation to that building or structure which would, but for those subsections, have been carried forward to that chargeable period may be set against that balancing charge and against no other income, profits or gains in that or any subsequent or preceding chargeable period.”. Retirement benefits. 18 .— (1) Chapter 1 of Part 30 of the Principal Act is amended in section 772— ( a ) in subsection (3A) by substituting the following for the construction of “A” in the formula in paragraph ( a ): “A is— (I) the amount equal to the value of the relevant individual’s accrued rights under the scheme (including accrued rights which relate to additional voluntary contributions under the scheme) exclusive of any lump sum paid in accordance with subsection (3)( f ), or (II) the amount equal to the value of the relevant individual’s accrued rights under the scheme which relate to additional voluntary contributions paid by that individual exclusive of any part of that amount paid by way of lump sum in accordance with subsection (3)( f ) in conjunction with the scheme rules, and”, ( b ) in subsection (3A)( aa ) by substituting the following for subparagraph (ii): “(ii) clause (I) of the construction of ‘A’ in the formula in paragraph ( a ) had never been enacted.”, ( c ) in subsection (3B)( b ) by substituting “other than in the case of an individual referred to in clause (II) of the construction of ‘A’ in the formula in subsection (3A)( a ) and an individual referred to in subsection (3A)( aa )” for “other than in the case of an individual referred to in subsection (3A)( aa )”, and ( d ) by inserting the following after subsection (3G): “(3H) A retirement benefits scheme shall neither cease to be an approved scheme nor shall the Revenue Commissioners be prevented from approving a retirement benefits scheme for the purposes of this Chapter because of any provision in the rules of the scheme allowing a member who comes within the provisions of section 787TA to exercise an option in accordance with that section requiring an amount representing the value of, or part of the value of, the member’s accrued rights under the scheme at the date of the exercise of the option to be transferred by the trustees of the scheme to the member.”. (2) Chapter 2 of Part 30 of the Principal Act is amended in section 784 by inserting the following after subsection (2D): “(2E) Notwithstanding any other provision of this Chapter, a retirement annuity contract shall not cease to be an annuity contract for the time being approved by the Revenue Commissioners, nor shall the Revenue Commissioners be prevented from approving such a contract, notwithstanding that the contract provides for the annuity secured by the contract for an individual to be commuted, where the individual comes within the provisions of s