Dáil Éireann debate -
Thursday, 12 May 1938

Vol. 71 No. 7

Financial Resolutions. - Financial Resolution No. 2—Income-Tax.

Mr. MacEntee

I move:—

(1) That for all the purposes of income-tax chargeable under Schedule C of the Income Tax Act, 1918, or under Case III of Schedule D of that Act, the expression "public revenue" wherever it occurs in the said Schedule C (including the Rules applicable to that Schedule) or in Rule 1 of the Rules applicable to the said Case III shall (except where the context otherwise requires) be construed and have effect as including the public revenue of any Government whatsoever and the revenue of any public authority or institution in any country outside Ireland.

(2) That where a banker or any other person in Ireland, by means of coupons received from another person or otherwise on his behalf, obtains payment of any foreign dividends elsewhere than in Ireland, the tax under Schedule C of the Income Tax Act, 1918, shall extend to those dividends, and the person obtaining payment of the said dividends shall be treated for the purposes of the paying agents rule as if he were intrusted with the payment thereof.

(3) That where a banker in Ireland sells or otherwise realises coupons for any foreign dividends and pays over the proceeds of such realisation to or carries such proceeds to the account of any person, the tax under Schedule C of the Income Tax Act, 1918, shall extend to such proceeds and the paying agents rules shall apply to such proceeds as if they were dividends and to the said banker as if he were a person intrusted with the payment thereof.

(4) That where a dealer in coupons in Ireland purchases coupons for any foreign dividends otherwise than from a banker or another dealer in coupons, the tax under Schedule C of the Income Tax Act, 1918, shall extend to the price paid on such purchase as if it were a dividend and to the said dealer as if he were a person intrusted with the payment thereof.

(5) That all the foregoing provisions (except paragraph (1)) of this Resolution shall apply and have effect for the purposes of Rule 7 of the Miscellaneous Rules applicable to Schedule D of the Income Tax Act, 1918, with the necessary modifications.

(6) That in this Resolution—

the word "Ireland" does not include any area which is, for the time being, not within the area and extent of application of the laws enacted by the Oireachtas,

the expression "paying agents rules" means that set of Rules applicable to Schedule C of the Income Tax Act, 1918, the heading of which begins with the words "Rules as to interest, etc. with the payment of which persons",

the word "banker" includes a person acting as a banker,

the words and expression "dividends", "coupons" and "coupons for any dividends" have the same meanings as they respectively have in the paying agents rules.

the expression "foreign dividends" means dividends payable elsewhere than in Ireland, whether they are or are not also payable in Ireland.

(7) That Schedule C and Schedule D of the Income Tax Act, 1918, shall have and shall be deemed always to have had effect subject to the provisions of this Resolution.

(8) It is hereby declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1927 (No. 7 of 1927).

This is a Resolution which provides for the continuance of the practice that has been in force for many years relating to the deduction of incometax from foreign dividends, interest, etc., by bankers and other persons concerned. It is the Resolution to which I referred in my speech.

Mr. Cosgrave

I do not know whether the Minister expected that he was going to get all these Resolutions without at least some discussion. If the Minister will look up the records of the last six or seven years, he will find that the receipts from surtax and supertax have diminished very considerably. They have gone down from £789,000 in year 1931-32 to £500,000 this year. During the 1932 Budget the Ministry generally were very severe on what they called the rich. I want to know whether it is in any way due to that policy, or to this sort of policy, that that reduction has taken place. That was easy money. It cost nothing to collect. It would cost us, I suppose, about 3d. in the pound on tea to get in as much as we have lost on that. If the Revenue Commissioners think that the individuals who used to pay this tax, surtax and supertax, have lost money during the period and have not now got the incomes that they had then, I have nothing to say. If, on the other hand, it is by reason of these pin-pricks that people have changed their domicile, have left the country, and so on, and that we are simply getting 6d. and losing £1, I put it to the Minister whether or not it is a wise policy to adopt.

Mr. MacEntee

I am afraid that what the Deputy has been suggesting has nothing to do with this Resolution, which is produced owing to the fact that a recent Court of Appeal decision in Great Britain indicated that the statute which was intended to lay down a certain practice had been so loosely drawn that possibly a court here might find that what has been customary over the past 40 years was not justified by the exact text of the section. This Resolution is merely produced to prevent people from thinking that this decision in the Court of Appeal in Great Britain offered them a prospect of success if they challenged the existing practice here. It is merely, as I say, to make quite clear that what has been done here has been done in accordance with the law as we have understood it.

Question put and agreed to.