S.I. No. 231/1961:

INCOME TAX (EMPLOYMENTS) (SUR-TAX) REGULATIONS, 1961.

INCOME TAX (EMPLOYMENTS) (SUR-TAX) REGULATIONS, 1961.

The Revenue Commissioners, in exercise of the powers conferred upon them by section 11 of the Finance Act, 1961 (No. 23 of 1961), hereby make the following regulations:

1. These Regulations may be cited as the Income Tax (Employments) (Sur-tax) Regulations, 1961.

2. In these Regulations--

"the Act of 1959" means the Finance (No. 2) Act, 1959 (No. 42 of 1959);

" emoluments" means anything assessable to income tax under Schedule E;

"employee" means any person in receipt of emoluments:

"employer" means any person paying emoluments;

"Inspector" means, in relation to a case in which the employee's emoluments are wholly or mainly emoluments to which Part II of the Act of 1959 applies, the Inspector of Taxes by whom the amount of the tax-free allowances appropriate to the employee falls to be determined for the purposes of the Regulations of 1960 and, in any other case, the Inspector of Taxes for Public Departments;

"preceding year" means, in relation to a year of assessment, the year of assessment immediately preceding that year;

"the principal section" means section 11 of the Finance Act, 1961 (No. 23 of 1961);

"the Regulations of 1960" means the Income Tax (Employments) Regulations, 1960 ( S.I. No. 28 of 1960 );

"tax-free allowances", in relation to an employee, means the appropriate reliefs from income tax for which he qualifies, increased by any earned income relief relative thereto;

other expressions have the same meaning as in the Income Tax Acts.

3.--(1) An election by an employee, under subsection (2) of the principal section, for recovery of sur-tax by deduction from emoluments paid to him in a year of assessment shall be made by notice given to the Inspector not later than three months before the beginning of that year.

(2) An employee who has made an election shall furnish the Inspector with such additional information and particulars as the Inspector may reasonably require for the purpose of estimating the amount of sur-tax payable by the employee for the preceding year and of determining whether it is practicable to give effect to the election.

4. A notice under subsection (4) of the principal section that it is not practicable to give effect to an election for the recovery of sur-tax by deduction from emoluments paid in a year of assessment shall be given by the Inspector not later than one month before the beginning of that year.

5.--(1) Where effect is to be given to an election under subsection (2) of the principal section, the amount of sur-tax which, in consequence of the election, is to be recovered by deduction from emoluments paid to the employee in the year of assessment shall, subject to the subsequent provisions of these Regulations, be the amount of sur-tax estimated by the Inspector to be payable by the employee for the preceding year.

(2) Where it is expected that, in the year of assessment, the employee will receive both emoluments to which Part II of the Act of 1959 applies and other emoluments, the Inspector shall determine how much (if any) of the amount of sur-tax estimated by him to be payable by the employee is to be recovered by deduction from emoluments of a particular class.

(3) The Inspector shall give notice to the employee of any estimate or determination made by him under this Regulation.

6. An amount of sur-tax for any year of assessment which, in accordance with Regulation 5, is to be recovered by deduction from emoluments to which Part II of the Act of 1959 applies shall be treated, for the purposes of paragraph (1) of Regulation 10 of the Regulations of 1960, as if it were an amount of income tax remaining unpaid for that year of assessment; and the other provisions of Parts III, IV and V of the Regulations of 1960 shall have effect accordingly, subject to the modification that the provisions of the said Part III relating to the amendment of a determination of the amount of the tax-free allowances appropriate to an employee shall be extended so as to empower the Inspector, and, in the case of an appeal, the Special Commissioners, to amend the amount of sur-tax to be recovered by deduction as aforesaid.

7. Where, in accordance with Regulation 5, an amount of sur-tax is to be recovered by deduction from emoluments, other than emoluments to which Part II of the Act of 1959 applies, paid to an employee in any year of assessment, the following provisions shall have effect:

(a) the Inspector may, at any time before the end of the year of assessment, amend, by agreement with the employee, the said amount;

(b) if the exact amount of sur-tax payable by the employee for the preceding year is ascertained as a result of--

(i) an agreement in writing in that regard having been come to between the Inspector and the employee or

(ii) an assessment to sur-tax made on the employee for the preceding year having become final and conclusive,

the said exact amount, if different from the amount estimated by the Inspector to be payable, shall be substituted therefor and, in a case in which paragraph (2) of Regulation 5 applies, the Inspector may amend his determination under that paragraph.

8.--(1) Where, in a determination under Part III of the Regulations of 1960 of the amount of the tax-free allowances appropriate to an employee for any year of assessment, an amount of sur-tax for the preceding year has been taken into account by virtue of Regulation 6--

(a) in ascertaining whether any (and if so what) amount of income tax has been underpaid or overpaid, the total net tax deducted from the employee's emoluments during the year of assessment pursuant to the determination shall be reduced (including reduced to nil) by the amount referable to sur-tax, and

(b) so much of the total net tax deducted as aforesaid as does not exceed the amount referable to sur-tax shall be treated as having been deducted in respect of sur-tax.

(2) For the purposes of paragraph (1) of this Regulation, the amount referable to sur-tax shall be taken to be--

(a) in a case in which the exact amount of sur-tax payable by the employee for the preceding year has been ascertained in either of the ways mentioned in paragraph (b) of Regulation 7, that exact amount,

(b) in any other case, the amount of sur-tax for the preceding year which was taken into account in the determination, which was in force (for the purposes of the Regulations of 1960) immediately before the end of the year of assessment, of the amount of tax-free allowances appropriate to the employee for that year.

Provided that if, in the year of assessment, the employee received emoluments, other than emoluments to which Part II of the Act of 1959 applies, the amount which would otherwise be taken under subparagraph (a) of this paragraph as the amount referable to sur-tax shall be reduced by the total amount of the deductions, if any, in respect of sur-tax for the preceding year made from such emoluments.

GIVEN this 19th day of October, 1961.

J. C. DUIGNAN,

Revenue Commissioner.

EXPLANATORY NOTE.

These Regulations prescribe the procedure to be followed under Section 11 of the Finance Act, 1961 , which provides that, where, under Pay As You Earn or otherwise, Income Tax is deductible from the emoluments paid to an employee (or office-holder) in a year of assessment, the employee may elect that the Sur-tax estimated to be payable by him for the preceding year be similarly deducted.

The Regulations require that an election under Section 11 is to be made to the appropriate Inspector of Taxes not later than three months before the beginning of the year of assessment during which deductions on account of Sur-tax are to be made and that, where it is impracticable to give effect to an election, notice is to be given by the Inspector accordingly not later than one month before the beginning of the year of assessment. Where effect is to be given to an election the necessary estimate of Sur-tax liability is to be made by the Inspector who may revise the estimate in agreement with the employee. The estimate may also be revised by the Special Commissioners on appeal.

Deduction of Sur-tax from emoluments within Pay As You Earn is to be effected by reduction of the tax-free allowances to which the employee would otherwise be entitled. The total net tax deducted is to be applied primarily in satisfaction of liability to Sur-tax.

Provision is made for the case in which the employee is in receipt of emoluments within the scope of Pay As You Earn and of other emoluments. In such a case the Inspector is empowered to determine how much of the estimated Sur-tax is to be deducted from emoluments of each class.