Oireachtas Joint and Select Committees

Wednesday, 8 November 2017

Select Committee on Finance, Public Expenditure and Reform, and Taoiseach

Finance Bill 2017: Committee Stage (Resumed)

10:00 am

Photo of Paschal DonohoePaschal Donohoe (Dublin Central, Fine Gael) | Oireachtas source

I move amendment No. 36:

In page 32, to delete lines 37 to 42, to delete page 33, and in page 34, to delete lines 1 to 31 and

substitute the following:“(5) (a) In this subsection—
(i) ‘material error’, ‘fundamental error’, ‘retrospective’ and ‘opening reserves’ shall be construed in accordance with generally accepted accounting practice;

(ii) ‘relevant amount’ means the amount representing the correction of an error which is taxable or deductible, as the case may be, by virtue of paragraphs (c) or (d) as adjusted to satisfy the

requirements of paragraphs (e) and (f);

(iii) ‘relevant period’ means the accounting period beginning on the first day of the period of account in which the error, referred to in paragraph (b), is corrected for the first time.
(b) This subsection shall apply where a company’s accounts include the correction of an error.

(c) Subject to the Tax Acts, an amount representing the retrospective effect of correcting either a material error or a fundamental error which is recognised in opening reserves (howsoever designated) for a period of account in accordance with generally accepted accounting practice shall be taxable or deductible, as the case may be, in computing the profits or gains of a company for the purposes of Case I or II of Schedule D.

(d) Subject to the Tax Acts, an amount representing the effect of correcting an error which is neither a material error nor a fundamental error and which is included in the profits of a company for a period of account as computed in accordance with generally accepted accounting practice shall be taxable or deductible, as the case may be, in computing the profits or gains of that company for the purposes of Case I or II of Schedule D.

(e) An amount shall not be regarded by virtue of paragraphs (c) and (d) as deductible in computing the profits or gains of a company for an accounting period for the purposes of Case I or II of Schedule D to the extent that—
(i) a deduction has been made in respect of that amount in computing such profits or gains for a previous accounting period, or

(ii) the company has benefited from a tax relief under any provision in respect of that amount for a previous accounting period.
(f) An amount shall not be regarded by virtue of paragraphs (c) and (d) as taxable in computing the profits or gains of a company for an accounting period for the purposes of Case I or II of Schedule D to the extent that the amount was treated as taxable in computing such profits or gains for a previous accounting period.

(g) References to profits or gains in paragraphs (c), (d), (e) and (f) include references to losses.

(h) Subject to the Tax Acts, the relevant amount shall neither be taxable nor deductible, as the case may be, for the relevant period but instead—
(i) where any part of the relevant amount relates to the relevant period, then that part of the relevant amount shall be taxable or deductible, as the case may be, for the relevant period,

(ii) where any part of the relevant amount relates to an accounting period which commenced on or after 1 January 2013, then the return and self assessment for that accounting period shall be amended in accordance with section 959V to correct that part of the relevant amount, and

(iii) where any part of the relevant amount relates to an accounting period which commenced before 1 January 2013, then the return for that accounting period shall be amended to correct that part of the relevant amount and for this purpose section 959V shall apply to such an amendment as if—
(I) subsections (2) and (4) of that section shall not apply,

(II) references in that section to ‘return and self assessment’, ‘return and a self assessment’, ‘return and the self assessment’ and ‘return or self assessment’ were references to ‘return’, and

(III) the reference in that section to section 959Z was a reference to section 956.”.”.

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