Revenue Precedents

Aluminum: The process of anodising aluminium qualifies. 319.20(7)

Animal Feed: Animal feed that is manufactured in a feed mill and supplied, including delivery, by pumping directly into farmers' silos for which delivery no seperate charge is made qualifies. 319.7

Assembly: Assembly of component parts ordered from suppliers in different countries and from different sources and used in a process to produce agricultural machinery qualified for manufacturing relief. The degree of processing resulted in machines which were more than an aggregation of individual components. Irish Agricultural Machinery Limited.--High Court-Unreported-6 February 1987. Supreme Court – Irish Tax Report [Volume III] Page 611-16 March 1989. 1031/80

Assembly: The assembly of components – from the one source – into motorbikes did not qualify as a manufacturing process. —There was not a sufficient degree of change--may be appealed. 6313/94

Blending: The blending of tea qualifies for manufacturing relief where the process involves sophisticated blending by which precise quantities of tea leaves are blended by machine to produce specific blends. A new product results from the process. 8163/84

Bromides: Design and processing of bromides of advertising material to newspaper and magazine publishers where design cost is greater than the processing cost: amount of the relief? Relief confined to the nominal value of the bromide: essentially a design rather than a printing process. 319.11

Bulls: Production of straws containing diluted bulls' semen for use in A.I. does not qualify. 319.20(10)

Carbonated water: The three types of product, still water, unflavoured water and flavoured water qualifies for manufacturing relief. The process involves ozonation, granular activated carbon filtration, chilling, bottling and carbonation. Accepted. 1742/91

Chilled meals: Producing ready-cooked, chilled, vacuum packed meals for the travel industry qualifies. 319.21(5)

Co development: Where software development qualifies under subsection 10 and some of the developoment is the subject of a co-development agreement with another company, whether that operates to deprive the company of relief by virtue of subsection 6)b)? No, provided co-development does not exceed 15% of the total. 319.1996

Commercial photographer: Commercial photographer is not producing “goods” for the purposes of the relief. Income arises from the photographer's skill rather than from “goods”. 319.11(3)

Compilation of information: Sale of industrial information compiled and placed on magnetic tape or as a printed report does not qualify, sale of information essentially. 319.3(5)

Computer software: (1) Localisation of Master programme; encoding revised software on to physical medium and sale either outright or by perpetual licence; (2) Conversion, training and maintenance related to the software? (1) All qualify. (2) Not qualifying. 319.3(2)

Computer software: Would the sale of software on a term basis qualify for manufacturing relief. Life of software not expected to extend beyond three years. Value at end of three years of little significance? Allowed. Software considered to be in a different category to other manufactured products, where leasing arrangements do not qualify. 622/92

Computer software: Graphic design sold in diskette format or in the form of a hard copy such as slides would not qualify for manufacturing relief. The income earned would result from the graphic design and not from the sale of the diskette or slides. 1823/92

Computer software: If two companies manufacture a product in partnership, both companies can avail of manufacturing relief. Format of partnership is important. 26/93

Computer software: 1. Whether the sale of software ( manufactured by the company) by perpetual licence would qualify for manufacturing relief. 2.Whether the sale of software (manufactured by the company) on disc accompanied by a licence allowing multiple use would qualify? 1 & 2. Allowed.Both 1& 2 in the circumstances of the computer industry accepted as an outright sale. 2260/92

Computer software: 1.Would the duplication of computer discs qualify for the 10% rate. 2. Would the subcontracting of some of the duplication, to meet production requirements qualify for 10%? 1. Allowed. 2. The 10% was allowerd where the quantum of discs for which the duplication element of the manufacturing process would be subcontracted out would not exceed 5% in any one year. 1711/93

Computer software: Manufacturing relief applies to income generated by a software developer, charging a monthly fee for the use of the software. In the particular circumstances of the computer industry. 6274/97

Computer software: Localisation, where some of the process is subcontracted out, qualifies for manufacturing relief. The Irish company engages in a process whereby a computer program is broken down into various codes, and those requiring amendment are identified. Part of the localisation is done by the company and the localisation of other codes is sub-contracted out under instructions. The Irish company then re-engineers the program. In this instance the job was controlled by the company seeking relief and there was significant amount of software development done by the company itself. 6162/97

Computer software: Would software developed by companies which are not in receipt of employment grants qualify for manufacturing relief? The company manufactures specific software applications for banks and financial institutions which are sold to the client in disk format? Allowed provided there is a sale of a tangible product such as a disk. 6100/97

Computer software: Writing and installing software does not qualify where the company is not in receipt of IDA employment grant. 319.3(1)

Computer hardware: Does the customisation of systems – not always made in Ireland, but where intergration takes place in Ireland, qualify for the 10% rate. Does a 90% subsidiary selling the goods of a resident manufacturing company have to be resident in the state to qualify for manufacturing relief? Allowed – only a small element of turnover arose from non Irish systems. No. 821/92

Computer hardware: Manufacturing relief applies to the verification of integrated circuits where the process results in a Classification which is encoded onto each component . The equipment used in the process resembles an automated assembly line. 1810/92

Computer hardware: Do the following qualify for manufacturing relief:1. Assembly of P.C,s from bought in components. 2. Bought in peripherals i.e. printers and monitors?

1.Yes. 2. Allow provided (a) they are built in to the manufactured product, or (b) sold as part of an integrated package and tested by the 10% company. 1595/93

Computer hardware: Manufacturing relief applies to the sale of software developed by a software developer and sold embedded in bought in hardware. In the particular case the provision of the hardware is ancillary to the sale of the software package and by far the greater portion of the income derives from the software. 6448/94

Computer programmes development and repair: (1) Development and production of computer programmes in the form of magnetic disks or tapes qualifies. (2) The repair of computer programmes does not qualify under subsection 15(1). This applies to repair of physical hardware rather than software. 319.3(7)

Computer assembly and upgrade: (1) Computer assembly and upgrade qualify. (2) The replacement component which has the same capabilities as the item replaced will not qualify. This is repair only. 319.3

Construction: The manufacture, on site of a new pipe inside an old one, does not qualify for manufacturing relief as the work was carried out on site it was considered to be construction. 6381/96

Cutting and printing: Production of data labels by cutting acrylic rolls to size and laser printing data including bar codes onto the labels qualifies. 319.21

Day old chicks: The production of day-old chicks in a controlled environment qualified for manufacturing relief. Claim accepted by the High Court. Irish Tax Report [Volume IV] Page 526. Decision called into question by comments by Supreme Court in Leeside Nurseries case. 1821/87

Data processing: Whether a service provided for a parent or unconnected company would be regarded as data processing where the operations are grant aided by the IDA, or other appropriate agencies, as a computer service. Types of activities include 1. Telephone calls for hotel reservations or airplane tickets are taken, data processed and that data passed on to another company(no sale of hotel rooms or airline tickets takes place.) 2. Technical support for computer services is provided over the phone. 3 Invoices, accounts and other data are processed for third parties. 1,2,3 Allowed. 1223/91

Data processing: The operation of a VAT refund scheme by means of computer processing does not qualify due to retail basis of service and the nature of the service which is not a data processing service; notwithstanding receipt by the company of an IDA employment grant. 319.5

Design and programming diskettes: (1) Whether qualifies; (2) Whether installation of and tuition in respect of software qualifies? (1) Yes, provided subsection 10 satisfied re grant; (2) No. 319.5(2)

Disk controller: Production of disc controller for computer systems qualifies. 319.3(6)

Dental prostheses: The making of bridges, crowns and dental prostheses by dental technicians qualifies. 319.20(3)

Design: Construction of designs and layouts for packaging, brochures etc. and the design sold on computer disk do not qualify. Design service. 319.20(6)

Disc controller: Production of a journal/magazine using desktop publishing software does not qualify? 319.12

Drying seeds: The drying of grass seeds and the drying and spraying of cereal is excluded from relief by subsection 6. 319.7(1)

Duplication: The duplication of sound recording master tapes qualifies for manufacturing relief. Sound recordings also qualify. 6306/95

Duplication: The duplication of video cassettes qualifies for manufacturing relief. 6587/95

Dwarfing of Chrysanthemums: Whether a process whereby plants are held in a controlled environment subject to specified amounts of light, heat and water, and the addition of chemicals qualify for manufacturing? Claim rejected by the Supreme Court. Leeside Nurseries case [Not yet reported]. A key issue was whether the end product is capable of being manufactured. 6938/88

Electricity: A monthly fee for the supply of electricity generated by a company was allowed as income from the sale of goods. The fee consisting of two elements, representing a charge for the facility being on stand by on the grid (i.e. a payment of account of electricity produced) and a charge to cover the fuel and variable production costs for the electricity supplied to the grid. 6513/97

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Electricity: Whether the production of electricity by means of wind power would qualify for manufacturing relief? Accepted. See Dtx/6419/95 production of electricity using both gas and distillate oil. Ir 10441/1970/92 (Hydro electric power),Dtx/6513/97 turf burning power stations and 319.6 from landfill gas. In all these cases the relief was granted. 6338/96

Embroidery of clothing: Manufacturing relief did not apply to a process whereby a logo or design is embroidered on a garment which is bought in by the company. 6436/94

Embryos: Whether the following processes qualify for manufacturing relief? Embryo transfer with some level of processing . Laboratory production of embryos. Freezing of embryos? Disallowed. 6428/94

Engine remanufacture: Re-processing and re-manufacture of whole engines or parts thereof for which a warranty is then given is excluded by subsection 6(v) 319.14

Extent of European Community: The Isle of Man is outside the EC for subsection 9(a). 319.00-2(2)

Ferry company showing films aboard ship: The trade of showing films on a ferry qualifies as a shipping activity for the purposes of manufacturing relief. 1824/93

Film post production: Whether the process of post production of a film would qualify for manufacturing relief. In this case the process was more advanced than usual and included the addition of sound,colour and special effects which resulted in the production of a product which was significantly different to the one worked on? Allowed. Where post production involves only subtitling, editing or adaption of a film, the process would not qualify for the relief, see Dtx/6210/97. 6111/95

Films sets: Whether a film set consisting of backgrounds, windows and doors, painted and decorated would qualify. The set is made in a factory? Allowed. The assembly of the sets on site would not qualify. 6465/95

Fish farming: What is the definition of fish farming for the purposes of manufacturing relief. Does the production of ornamental fish qualify? Allowed. The E.U. has adopted the F.A.O. definition. Farming implies some form of intervention in the rearing process to enhance production such as regular stocking, feeding and protection from predators. Advice of Bord Iascaigh Mhara sought in each case. 6060/95

Fish processing: Whether the processing of prawns in the following manner would qualify for manufacturing relief--addition of chemicals, freezing and glazing? Refused by Revenue, granted by Appeal Commissioner and not appealed further by Revenue. Revenue may further consider if other cases emerge and the issue becomes financially significant. 812/91

Fish processing: (1) Whether subsection 6 applies to subsection 4 generally; (2) whether blast freezing fish is a process of manufacture? (1) No, only as to the extent specified in subsection 4(b); (2) Yes. 319.21(1)

Fish processing: Fish which is subject to a process of manufacture qualifies for the reduced rate of corporation tax. 6063/98

Fowl processing: The rearing of young fowl to marketable age, their killing, bleeding, scalding, plucking, evisceration, grading, bagging, freezing and boxing qualifies. 319.10(3)

Fruit processing: Bulk fruit broken down, cleaned and edible oils added:- (1) whether qualifies. (2) whether excluded by subsection 6? (1) No. (2) Yes. 319.7(5)

Gas: The processing which includes variations of moisture, blending to specific specifications and the addition of stenching agent to various gases, qualifies for manufacturing relief. 6394/90

Grain: (1) Grain drying:- whether excluded by subsection 6; (2) whether excluded when grain milled into meal by third party and sold on; (3) when grain dried, milled and sold in bulk meal form by one company? (1) Yes. (2) Yes. (3) No. 319.7(3)

Graphic design: Company providing “design for print” is a non-qualifying service rather than a manufacturing process irrespective of the medium in which the design is sold. 319.10

Interest: Interest earned on short term deposits, income from the sale of goods Is disallowed. See file number 1223/91. 9997/99

Interest: (1) Interest relating to the late payment of sales proceeds qualifies even where it is inter-group companies; (2) Whether interest on inter-company balances arising from the transfer of sale proceeds from one company to another for financing qualifies? (1) Yes. (2) No. 319.1996(1)

Laser print cartridges remanufacture: Does the remanufacture of laser printer cartridges qualify for manufacturing relief. In the particular case key parts were manufactured in house and added so that effectively a new product was produced? Allowed. We are distinguising this case from cartridges that are remanufactured by assembling used parts only, with the addition of some minor upgrading. See Dtx/2849/93. 6347/95

Licence fees received by software developer: Company produces a master diskette, the duplication of which is sub-contracted; its income is a licence fee which is a percentage of the end price of the software. Whether qualifies for the relief? Yes. 319.5(1)

Life rafts: (1) Whether the assembly of life rafts is manufacturing; (2) whether the repair of life rafts is “ship” repairs for the purposes of subsection 8? (1) No. (2) No. 319.20(8)

Lobsters: Lobsters kept in an artificially induced state of suspended animation for sale live during the off-season does not qualify. 319.21(3)

Meat processing: Whether activities carried out in an EU approved plant qualifies for manufacturing relief. Livestock purchased and slaughtered, waste offal removed, meat deboned, treated with preservatives, carved and stored in refridgerated unit? Allowed. The slaughter of animals and their further processing, in an EU approved establishment in accordance with European Union (Fresh Meat) regulations 1987 is allowed for the purposes of the 10% schem. Outside of these establishments the process will qualify only if it meets the general test for manufacturing. Qualifying categories of processing would include the manufacture of sausages, puddings, cooked meats, rashers, pork etc. Processes where cutting only is involved would not qualify. The slaughter of animals and processing into cuts of meat would qualify. 6078/94

Milk: Production of low-fat milk with vitamins added; fortified skim milk; buttermilk and flavoured school milk: (1) whether manufacture; (2) whether excluded by subsection 6? (1) Yes; (2) no; greater degree of change to end products. 319.7(6)

Motor repair: Whether rewinding of motor engines falls within subsection 6(v)? Yes. 319.14(1)

Music tapes: Whether the duplication of sound recording master tapes qualifies for manufacturing relief? Allowed. Sound recordings also qualify. 6306/95

Music master tape: Whether the exploitation by a record company of sound recordings by way of licence arrangements would qualify for manufacturing relief? Allowed for usual form of licencing by independent record production companies. Payment based on each record sold. Does not relate to the copyright in the material featured. Arises from the copyright in the recording. 6421/95

Mussel farming: A mussel farm is a “fish farm” for subsection. 319.21(2

Newspapers: Would a paper dealing with greyhound racing, coursing and greyhounds generally, be regarded as coming within the definition of a newspaper as outlined in Section 443(19)(a)(i)TCA 1997 for the purposes of manufacturing relief? Disallowed. 6156/96

Newspapers: Would a freesheet newspaper with a circulation of 35,000 copies qualify for manufacturing relief? Disallowed. Section 443(19)(a)(iii)TCA 1997) requires that a newspaper is intended to be sold to the public. 9088/96

Newspaper printing: Whether the production of a newspaper which does not come within Section 443 would qualify if a company leases a printing facility, and undertakes the printing itself? Allowed. Provided the company has control of the printing and bears the employees costs. The company must print itself to qualify outside Section 443(19). 6183/96

Nut processing: Nut processing to remove skin and shell followed by roasting qualifies. 319.20(5)

Offals: Offals produced by meat factories are “goods”. 319.10(1)

Office stationery and support: (1) Whether printing letters and brochures etc. qualifies; (2) whether office support i.e. copying, design and communication qualifies? (1) Yes, provided sold wholesale; (2) No. 319.11(4)

Peat products: Whether the following qualify for manufacturing relief: 1.Machine processing of peat and the addition of fertiliser, lime and sand to produce horticultural products.2.Processing and blending to affect moisture content and screening to remove debris to produce a consistant product? 1. Allowed. 2. Disallowed. Not sufficient change in character of the product. 1501/91

Pharmaceutical validation: Does validation of pharmaceutical products qualify for manufacturing relief. Pharmaceutical products are subjected to a process by qualified chemists who ensure that the stringent requirements of the Drugs and Medicines regulatory authorities are met. A company involved in the validation process would take full legal responsibility for the finished produc? Allowed. 6223/97

Pharmaceutical phase in: Would manufacturing relief apply to the packaging and bottling of tablets in the 12 month period, while full manufacturing was being set up. The delay was outside the company's control? Allowed. 10441/7/92

Pharmaceutical subcontracting: Does the subcontracting out of the granulation process, disqualify a process from manufacturing relief?. The remaining process involves the sampling, testing and mixing of specified quantities of ingredients to produce a homogeneous mixture. The mixture is a new product distinguisable from the individual ingredients. (Contrast with the mixing of fruit where the character of the individual ingredients remain)? Allowed. The remaining activities constitute manufacture in their own right. 6492/95

Phase-in: Would the sale of goods not manufactured by a company qualify in the period prior to full manufacture? Yes; provided full manufacture was not possible due to circumstances outsides the company's control. File not available – long standing practice. 9999/99

Photo processing: Commercial photo developing carried on in a processing laboratory qualifies. 319.11(2)

Printing: Whether the production of a newspaper which does not come within Section 443 would qualify if a company leases a printing facility, and undertakes the printing itself? Allowed. Provided the company has control of the printing and bears the employees costs. The company must print itself to qualify outside Section 443(19). 6183/96

Printing plates: Would the process whereby information is transferred to a printing plate or film positive qualify for the 10% rate? Allowed. See 10441/2163/92. 6313/96

Printing textbooks: (1) Whether printing and re-printing textbooks qualifies; (2) whether sales to schools are “retail sales"? (1) Yes. (2) No 319.12(1)

Printing, copying: Subsidiary of consulting engineering firm trading only with the parent: printing and binding reports and developing photos of maps etc.: whether qualifying? No, ancillary to engineering practice. 319.11(1)

Printing general: 1.Does printing which includes, design of layout and typeset, preparation of plates and printing qualify for manufacturing relief. 2. Will manufacturing relief apply to the production of a magazine or newspaper which does not conform to the definition in Section 443(19) TCA 1997, where the actual printing is subcontracted out? 1.Allowed. 2.Disallowed. To qualify outside of 443(19) a company would have to print the newspaper itself. 6497/95

Processing marble and slate: Whether cutting, levelling and polishing bought-in marble and slate slabs into fireplace hearths and risers qualifies? Yes. 319.9

Production of software package: (1) Whether the design and construction on magnetic media of computer software qualifies when sold on a physical medium; (2) Whether feasibility studies related to the appropriate hardware for the resultant software qualifies? (1) Yes. (2) No. 319.3(3)

Programming: Programming of bought in programmable calculators and sale as one unit: whether qualifying? No. 319.5(4)

Recycled paper: Whether the processing of waste paper to remove contaminents, metal extracts etc, and to compress the paper into bales would be a manufacturing process. The end product is referred to as substitute wood pulp fibre? Disallowed. Appeal Commissioners ruled in favour of the company. Revenue is appealing to the High Court. 6211/95

Recycled waste: Whether a process to convert wastewater sludge to a granular fertiliser would constitute a manufacturing process. The process involves the addition of lime and cement kiln dust and the subjecting of it to various temperature and drying procedures. The sludge is bought from local authorities, processed and sold to the horticultural/agricultural industry? Allowed. 6468/96

Recycling of waste water/oil: Whether a service company which subjects waste to various treatments to make it safe for disposal or re-use, would qualify for manufacturing relief? Disallowed. 6454/94

Remanufacture of cartridges: Does the remanufacture of laser printer cartridges qualify for manufacturing relief. In the particular case key parts were manufactured in house and added so that effectively a new product was produced? Allowed. We are distinguising this case from cartridges that are remanufactured by assembling used parts only, with the addition of some minor upgrading. See Dtx/2849/93. 6347/95

Remanufacturing: Can a company remanufacturing computer equipment not originally manufactured by it qualify for manufacturing relief? In the case of this process the products are upgraded by the addition of software upgrades? Allowed. Exceptional case-the degree of upgrade is sufficient to have the product come within the general understanding of manufacture. 6151/94

Retail sales: Whether goods sold to social organisations and residents organisations would be regarded as goods sold by retail for the purposes of Section 443 subsection (5) (a)? No. CTF208

Sale of goods: Whether the following items are to be treated as income form the sale of “goods” for the purposes of the section : i) foreign exchange gains/losses arising on trading balances; ii) balancing charges on the disposal of trading assets? Yes. CTF 197

Sand: Where a company is engaged in crushing stone; and grading and washing sand as a whole process:- all qualifies. 319.9(1)

Seeds, minerals and silage additives: The production of these is excluded by subsection 6. 319.7(2)

Sheepskins and wools;(1) Whether the production of pickled skin pelts from sheepskins qualifies; (2) Whether the production of unscoured graded skin wool qualifies? (1) Yes. (2) No. 319.13

Sound recordings: The production of sound recordings to the stage of a master tape qualify for manufacturing relief. 9998/99

Sterilisation: Would a company who subjects materials(gowns,drapes, etc.) belonging to another company to a process of resterilisation, qualify for manufacturing relief. The same goods are subjected to the same process a number of times? Disallowed. There is no sale of goods, more akin to a laundry service. 6055/96

Sub-Contracting: Manufacture of mail bags in which some of the finishing was contracted-out; whether qualifying? Yes, provided sub-contracting does not exceed 3% of total. 319.20(2)

Sub-Contracting: Production of large refrigeration systems using contracted-in labour qualifies. 319.20

Sub-Contracting: Designing and planning the installation of food processing/pasteurisation systems the installation of which was carried out by other companies, the first company is not carrying out a manufacturing process. 319.20(1)

Television Programmes: The production of television programmes, given the use of sub-contractors to do some of the production work, qualify. 319.10(4)

Testing: Whether the testing of dairy, meat and feed products and accreditation for export is a manufacturing process? No, testing is not a manufacturing process. 319.16

Timber: Whether manufacturing relief would apply to: 1.Rough timber bought in, sawn into different lengths, planed and moulded, grooved into various products, door frames etc. 2.Rough timber bought in and put through treatment mill where it is treated with preservative? 1. Allowed. 2. Disallowed. Note : Cutting into different sizes without producing a product or moulding the timber would not qualify. 44/92

Timber: Whether the manufacture of Garden Sheds, Gates, Pallets etc., from boards which are converted from trees growing in a forest would qualify for manufacturing relief? Allowed. See also reference 44/92. 2438/93

Turkey eggs: The production of standard quality eggs from turkeys in a controlled environment was refused by Revenue. 6347/97

Vegetable processing: (1) Potatoes cleaned, peeled, dipped in preservatives and packed: whether qualifying; (2) Vegetables peeled, sliced or diced and packed: whether qualifying? (1) No. (2) No. 319.7(4)

Vehicle Repair: Whether company making bumpers, side barriers, grilles etc. and using them to replace damaged parts of customers' vehicles qualifies? No, subsection 6(v) applies. 319.14(2)

Vodka: Production of premium vodka from uncut spirit: qualifies. 319.20(9)

Waste: Using waste plastic to make virgin quality PVC granules is a manufacturing process. 319.20(4)