Revenue Note for Guidance

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Revenue Note for Guidance

PART 24B Council Regulation (EU) 2022/1854 of 6 October 2022 as regards Temporary Solidarity Contribution

Overview

Council Regulation (EU) 2022/1854 of 6 October 2022 on an emergency intervention to address high energy prices provided for the introduction of a temporary solidarity contribution by member states. This was implemented in Ireland in the Energy (Windfall Gains in the Energy Sector)(Temporary Solidarity Contribution) Act 2023 (“the Act of 2023”). The Act provides for a “temporary solidarity contribution” on the taxable profits of an energy company, defined in the Act as a company that generates at least 75 per cent of its turnover in a chargeable period from relevant activities, where chargeable period is defined as the 12 month period commencing on 1 January in each of the years 2022 and 2023 and relevant activities are defined in that Act as economic activities, carried on in the State or in a designated area (within the meaning of the Maritime Jurisdiction Act 2021), in the field of the extraction, mining or refining of natural gas, coal, petroleum or manufacture of coke oven products as referred to in Regulation (EC) No 1893/2006 of the European Parliament and of the Council. The Act provides for the amount of temporary solidarity contribution to be 75% of the taxable profits in 2022 and 2023 that are above 120% of average taxable profits in respect of reference years. This Part provides for the relevant definitions of “taxable profits”, and associated provisions required to ensure the operability of the measures included in the Act of 2023. This Part should be read in conjunction with the Act of 2023. The temporary solidarity contribution is a levy placed under the care and management of the Revenue Commissioners.

Interpretation

697R Interpretation

Summary

This section is the interpretation section for the Part. Some of the definitions are defined in the Act of 2023 and are reproduced below for ease of the interpretation of this Part.

Details

Definitions

(1) “accounting period” means an accounting period determined in accordance with section 27;

“Act of 2023” means the Energy (Windfall Gains in the Energy Sector)(Temporary Solidarity Contribution) Act 2023;

“average taxable profits in respect of the reference years” shall be construed in accordance with section 697T(1);

“chargeable period” has the meaning assigned to it in the Act of 2023. For the purpose of this Part, a chargeable period is the 12-month period commencing on 1 January in each of the years 2022 and 2023;

“Council Regulation” means Council Regulation (EU) 2022/1854 of 6 October 2022 on an emergency intervention to address high energy prices;

“energy company” has the same meaning as it has in the Act of 2023. For the purpose of this Part, an energy company means a company that generates at least 75 per cent of its turnover in a chargeable period from relevant activities. A company is defined in the Act of 2023 as a body corporate;

“relevant activities” has the same meaning as it has in the Act of 2023. For the purpose of this Part, relevant activities means economic activities carried on in the State or in a designated area (within the meaning of the Maritime Jurisdiction Act 2021) in the field of the extraction, mining or refining of natural gas, coal, petroleum or manufacture of coke oven products as referred to in Regulation (EC) No. 1893/2006 of the European Parliament and of the Council of 20 December 2006;

“taxable profits” shall be construed in accordance with section 697S(1);

“temporary solidarity contribution” has the meaning assigned to it in the Act of 2023. For the purpose of this Part, temporary solidarity contribution means a levy charged on the amount of the taxable profits in respect of a chargeable period which is above a 20% increase of average taxable profits in respect of the reference years, multiplied by a rate of 75 per cent.

(2) Provides that any words or expressions used in this Part, which are also used in Council Regulation (EU) 2022/1854, will have the same meaning unless the context otherwise requires.

Relevant Date: Finance Act 2024