486B Relief for investment in renewable energy generation.
(1) In this section—
“authorised officer” means an officer of the Revenue Commissioners authorised by them in writing for the purposes of this section;
“commencement date” means the day on which section 62 of the Finance Act, 1998, comes into operation;
“the Minister” means the Minister for
“new ordinary shares” means new ordinary shares forming part of the ordinary share capital of a qualifying company which, throughout the period of five years commencing on the date such shares are issued, carry no present or future preferential right to dividends, or to a company’s assets on its winding up, and no present or future preferential right to be redeemed;
“qualifying company” means a company which—
(a) is incorporated in the State,
(b) is resident in the State and not resident elsewhere, and
(c) exists solely for the purposes of undertaking a qualifying energy project;
“qualifying energy project” means a renewable energy project in respect of which the Minister has given a certificate under subsection (2) which has not been revoked under that subsection;
“qualifying period” means the period commencing on the commencement date and ending on the day before the third anniversary of that date;
“relevant cost” in relation to a qualifying energy project means the amount of the capital expenditure incurred or to be incurred by the qualifying company for the purposes of undertaking the qualifying energy project reduced by an amount equal to such part of that expenditure as—
(a) is attributable to the acquisition of, or of rights in or over, land, and
(b) has been or is to be met directly or indirectly by the State or by any person other than the qualifying company;
“relevant deduction” means, subject to subsections (4) and (5), a deduction of an amount equal to a relevant investment;
“relevant investment” means a sum of money which is—
(a) paid in the qualifying period by a company on its own behalf to a qualifying company in respect of new ordinary shares in the qualifying company and is paid by the company directly to the qualifying company,
(b) paid by the company for the purposes of enabling the qualifying company to undertake a qualifying energy project, and
(c) used by the qualifying company within 2 years of the receipt of that sum for those purposes,
but does not include a sum of money paid to the qualifying company on terms which provide that it will be repaid, and a reference to the making of a relevant investment shall be construed as a reference to the payment of such a sum to a qualifying company;
“renewable energy project” means a renewable energy project (including a project successful in the Third Alternative Energy Requirement Competition (AER III — 1997) initiated by the Minister) in one or more of the following categories of technology—
(a) solar power,
(c) hydropower, and
(2) (a) (i) The Minister, on the making of an application by a qualifying company, may give a certificate to the qualifying company stating, in relation to a renewable energy project to be undertaken by the company, that the renewable energy project is a qualifying energy project for the purposes of this section.
(ii) An application under this section shall be in such form, and shall contain such information, as the Minister may direct.
(b) A certificate given by the Minister under paragraph (a) shall be subject to such conditions as the Minister may consider proper and specifies in the certificate.
(c) The Minister may amend or revoke any condition (including a condition amended by virtue of this paragraph) specified in such a certificate; the Minister shall give notice in writing to the qualifying company concerned of the amendment or revocation and, on such notice being given, this section shall apply as if—
(i) a condition so amended and the amendment of which is specified in the notice was specified in the certificate, and
(ii) a condition so revoked and the revocation of which is specified in the notice was not specified in the certificate.
(d) A reference in paragraph (c) to the amendment of a condition specified in a certificate includes a reference to the addition of any matter, by way of a further condition, to the terms of the certificate.
(e) Where a company fails to comply with any of the conditions specified in a certificate issued to it under paragraph (a)—
(i) that failure shall constitute the failure of an event to happen by reason of which relief is to be withdrawn under subsection (6), and
(ii) the Minister may, by notice in writing served by registered post on the company, revoke the certificate.
(3) Subject to this section, where in an accounting period a company makes a relevant investment, it shall, on making a claim in that behalf, be given a relevant deduction from its total profits for the accounting period; but, where the amount of the relevant deduction to which the company is entitled under this section in an accounting period exceeds its profits for that accounting period, an amount equal to that excess shall be carried forward to the succeeding accounting period and the amount so carried forward shall be treated for the purposes of this section as if it were a relevant investment made in that succeeding accounting period.
(4) Where in any period of 12 months ending on the day before an anniversary of the commencement date, the amount or the aggregate amount of the relevant investments made, or treated as made, by a company, or by the company and all companies which at any time in that period would be regarded as connected with the company, exceeds
(a) no relief shall be given under this section in respect of the amount of the excess, and
(b) where there is more than one relevant investment,
>the inspector or, on appeal, the Appeal Commissioners shall make such apportionment of the relief available as shall be just and reasonable< to allocate to each relevant investment a due proportion of the relief available and, where necessary, to grant to each company concerned an amount of relief proportionate to the amount of the relevant investment or the aggregate amount of the relevant investments made by it in the period.
(5) Relief under this section shall not be given in respect of a relevant investment which is made at any time in a qualifying company if, at that time, the aggregate of the amounts of that relevant investment and all other relevant investments made in the qualifying company at or before that time exceeds an amount equal to—
(a) 50 per cent of the relevant cost of the project, or
whichever is the lesser.
(6) (a) A claim to relief under this section may be allowed at any time after the time specified in paragraph (c) in respect of the payment of a sum to a qualifying company if—
(i) that payment, if it is used, within 2 years of its being paid, by the qualifying company for the purposes of a qualifying energy project, will be a relevant investment, and
(ii) all the conditions specified in this section for the giving of the relief are or will be satisfied,
but the relief shall be withdrawn if, by reason of the happening of any subsequent event including the revocation by the Minister of a certificate under subsection (2) or the failure of an event to happen which at the time the relief was given was expected to happen, the company making the claim was not entitled to the relief allowed.
(b) Where a company has made a relevant investment by means of a subscription for new ordinary shares of a qualifying company and any of those shares are disposed of at any time within 5 years after the time specified in paragraph (c), a claim to relief under this section shall not be allowed in respect of the amount subscribed for those shares, and if any such relief has been given, it shall be withdrawn.
(c) The time referred to in paragraph (a) and paragraph (b) is the time when the payment in respect of which relief is claimed has been made.
(7) A claim for relief in respect of a relevant investment in a company shall not be allowed unless it is accompanied by a certificate issued by the company in such form as the Revenue Commissioners may direct and certifying that the conditions for the relief, in so far as they apply to the company and the qualifying energy project, are or will be satisfied in relation to that relevant investment.
(8) Before issuing a certificate for the purposes of subsection (7), a qualifying company shall furnish the authorised officer with—
(a) a statement to the effect that it satisfies or will satisfy the conditions for the relief in so far as they apply in relation to the company and the qualifying energy project,
(b) a copy of the certificate, including a copy of any notice given by the Minister specifying the amendment or revocation of a condition specified in that certificate, under subsection (2) in respect of the qualifying energy project, and
(c) such other information as the Revenue Commissioners may reasonably require.
(9) A certificate to which subsection (7) relates shall not be issued—
(a) without the authority of the authorised officer, or
(b) in relation to a relevant investment in respect of which relief may not be given by virtue of subsection (5).
(10) Any statement under subsection (8) shall—
(a) contain such information as the Revenue Commissioners may reasonably require,
(b) be in such form as the Revenue Commissioners may direct, and
(c) contain a declaration that it is correct to the best of the company’s knowledge and belief.
(11) Where a qualifying company has issued a certificate for the purposes of subsection (7) or furnished a statement under subsection (8) and either—
(a) the certificate or statement is false or misleading in a material respect and is so false or misleading due to fraud or neglect, or
(b) the certificate was issued in contravention of subsection (9),
(i) the company shall be liable to a penalty not exceeding
>£500< or, in the case of fraud, not exceeding >£1,000<, and such penalty may, without prejudice to any other method of recovery, be proceeded for and recovered summarily in the like manner as in summary proceedings for the recovery of any fine or penalty under any Act relating to the excise, and
(ii) no relief shall be given under this section in respect of the matter to which the certificate or statement relates and, if any such relief has been given, it shall be withdrawn.
(12) A company shall not be entitled to relief in respect of a relevant investment unless the relevant investment—
(a) has been made for bona fide commercial reasons and not as part of a scheme or arrangement the main purpose or one of the main purposes of which is the avoidance of tax,
(b) has been or will be used for the purposes of undertaking a qualifying energy project, and
(c) is made at the risk of the company and neither the company nor any person who would be regarded as connected with the company is entitled to receive any payment in money or money’s worth or other benefit directly or indirectly borne by or attributable to the qualifying company, other than a payment made on an arm’s length basis for goods or services supplied or a payment out of the proceeds of exploiting the qualifying energy project to which the company is entitled under the terms subject to which the relevant investment is made.
(13) Where any relief has been given under this section which is subsequently found not to have been due or is to be withdrawn by virtue of subsection (6) or (11), that relief shall be withdrawn by making an assessment to corporation tax, under Case IV of Schedule D, for the accounting period or accounting periods in which relief was given and, notwithstanding anything in the Tax Acts, such an assessment may be made at any time.
(14) (a) Subject to paragraph (b), where a company is entitled to relief under this section in respect of any sum or any part of a sum, or would be so entitled on duly making a claim in that behalf, as a relevant deduction from its total profits for any accounting period, it shall not be entitled to any relief for that sum or that part of a sum, in computing its income or profits, or as a deduction from its income or profits, for any accounting period under any other provision of the Tax Acts or the Capital Gains Tax Acts.
(b) Where a company has made a relevant investment by means of a subscription for new ordinary shares of a qualifying company and none of those shares is disposed of by the company within five years of their acquisition by that company, then, the sums allowable as deductions from the consideration (“the consideration concerned”) in the computation for the purpose of capital gains tax of the gain or loss accruing to the company on the disposal of those shares shall be determined without regard to any relief under this section which the company has obtained, or would be entitled, on duly making a claim in that behalf, to obtain, except that, where those sums exceed the consideration concerned, they shall be reduced by an amount equal to the lesser of—
(i) the amount of the relevant deduction allowed to the company under this section in respect of the subscription for those shares, and
(ii) the amount of the excess.