Michael McGrath (Cork South Central, Fianna Fail) | Oireachtas source

In 2022, the Minister for Agriculture, Food and the Marine brought forward a voluntary permanent cessation scheme for the decommissioning of fishing vessels, which is funded from the Brexit adjustment reserve, BAR. To support this scheme, section 15 of the Finance (Covid-19 and Miscellaneous Provisions) Act 2022 introduced Chapter 5 of Part 23 of the Taxes Consolidation Act 1997. Chapter 5 provided for specific tax treatment for some of the income tax and corporation tax liabilities that would normally arise on receipt of payments under the scheme.

The scheme was originally to be administered in full in 2022. However, in December 2022 the EU Commission provided for an extension to 2023. The extended timeframe for the administration of the scheme means that the decommissioning scheme payments may be made in 2023, and not 2022, as had been originally provided for. Section 669O is now being amended to ensure that elements of the tax relief provided for under the section operate as intended within this extended timeframe. To clarify, it provides that the profits or gains chargeable in the period concerned should be reduced by 50% of the catch sum, which may include sums received in previous years under the temporary tie-up scheme. That is what we are extending.

Regarding the catch sum, this element of the compensation payment is a compensation for loss of income and is liable to income tax in respect of sole traders or corporation tax in respect of companies. Section 669O provides that profits or gains chargeable in the period concerned should be reduced by 50% of the catch sum.