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Dáil Éireann debate -
Wednesday, 5 May 1943

Vol. 89 No. 18

Financial Resolutions. - Financial Resolution No. 5—Corporation Profits Tax.

I move:

That paragraph (a) of sub-section (1) of Section 47 of the Finance Act, 1932 (No. 20 of 1932), shall, in repect of every accounting period, whether ending before or after the passing of the Act enacting as law the provisions of this Resolution, be construed and have effect as if the words "which by its constitution is precluded from distributing any profits amongst its members" now contained in the said paragraph were deleted therefrom and the words "which was immediately before the 5th day of May, 1943, precluded by its constitution from distributing any profits amongst its members and remains continuously so precluded from that date" were inserted in the said paragraph in lieu of the said words deleted therefrom.

I think the Minister said he was giving a substituted standard for new companies established since 1934, and only for those companies, of 10½ per cent., and that he was raising the substituted standard for all companies from 7½ per cent. to 9 per cent. He also said something about a 25 per cent. remission of the Corporation Profits Tax after the war.

If the Deputy, when he gets time, will take a look at the statement, he will find that the points have been fairly fully explained there, and in any case he can raise them again on the Finance Bill. As a matter of fact, they do not arise on this particular Resolution at all, but if, having read the Budget Statement, the Deputy wishes to have the matter further clarified, I shall do anything I can for him.

Will the Minister say what the purpose of this Resolution is?

The Resolution is designed to prevent a company from evading payment of Corporation Profits Tax by inserting in its articles of association a provision precluding it from distributing profits. A private company might resort to this device to evade the tax while excess corporation tax is in force, and then, when this tax has come to an end, remove the provision so as to enable it to distribute its accumulated profits. It is not suggested that any public company would, but there are, perhaps, some private companies which might resort to a device of the kind.

Question put and agreed to.
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