Finance Act, 1990

Tax treatment of profits, losses and capital gains arising from activities of a grouping (EEIG).

29.—(1) In this section “grouping” means a European Economic Interest Grouping formed upon the terms, in the manner and with the effects laid down in—

(a) Council Regulation (EEC) No. 2137/85 of 25 July 1985** on the European Economic Interest Groupings (EEIG), and

(b) the European Communities (European Economic Interest Groupings) Regulations, 1989 ( S.I. No. 191 of 1989 ),

and references to members of a grouping shall be construed accordingly.

(2) Notwithstanding anything in the Tax Acts or in the Capital Gains Tax Acts, a grouping shall be neither—

(a) charged to income tax, corporation tax or capital gains tax, as the case may be, in respect of profits or gains or chargeable gains arising to it, nor

(b) entitled to relief for a loss sustained by it,

and any assessment required to be made on such profits or gains or chargeable gains, and any relief for a loss, shall, as appropriate, be made on and allowed to the members of a grouping in accordance with the provisions of this section.

(3) Section 2 (1) of the Capital Gains Tax Act, 1975 , is hereby amended by the substitution of the following definition for the definition of “company”—

“‘company’ means any body corporate but does not include a grouping within the meaning of section 29 of the Finance Act, 1990;”.

(4) Section 1 (5) of the Corporation Tax Act, 1976 , is hereby amended by the insertion in the definition of “company” of the following subparagraph after subparagraph (i)—

“(iA) a grouping within the meaning of section 29 of the Finance Act, 1990,”.

(5) The provisions of—

(a) Chapter III of Part IV of the Income Tax Act, 1967 , other than section 72 (8) of that Act, and

(b) section 4 (5) of, and paragraph 3 (5) of Schedule 4 to, the Capital Gains Tax Act, 1975 ,

shall apply, with any necessary modifications, to the activities of a grouping in the same manner as they apply to a trade or profession which is carried on by two or more persons in partnership.

(6) In particular, but without prejudice to the generality of subsection (5), the provisions mentioned therein shall, in their application for the purposes of this section, have effect as if—

(a) references to a partnership agreement were references to the contract forming or providing for the formation of a grouping,

(b) references to a partner were references to a member of a grouping, and

(c) anything done or required to be done by the precedent acting partner was done or required to be done by the grouping.

(7) This section shall be deemed to have come into effect on the 1st day of July, 1989.

O.J. No. L 199 of 31.7.1985.