On 2 February 2006, the Minister of Finance presented the Finance Bill 2006 to Parliament. The Bill includes several measures that were not included in the Budget announcements issued on 7 December 2005 (see TNS:2005-12-09:IE-1). All figures are in Euros. Unless otherwise stated, the proposals are expected to take effect from 1 January 2006. The new measures are summarized below.

Business taxation

The proposals include:

-		implementing the amendments to the Merger Directive 90/434/EEC
-		amending the calculation of the surcharge on undistributed income of close companies to prevent the under-calculation of trading income;
-		with effect for accounting periods ending after 1 February 2006, allowing claims for research and development (R∧D) tax credits on expenditure on plant and machinery used wholly and exclusively for R∧D purposes, and empowering the Revenue Commissioners to seek expert scientific advice to enable claims for R∧D tax credits to be properly assessed;
-		extending by 4 years to the end of 2010 the termination date for the ring-fencing of losses in a shipping trade;
-		countering abuse of the patent income exemption with effect from 2 February 2006 by preventing the re-categorization of franchise licence fees as patent income and limiting the amount of exempt patent royalty distributions that may be made by a company to the aggregate of the company's (or the group's) R&D expenditure over a 3 year period;

Financial sector

The proposals include:

-		extending the existing exemption from withholding tax on interest paid to non-resident holders of quoted Eurobonds held in bearer form to quoted Eurobonds that are registered;
-		exempting Irish funds within the definition of an investment undertaking from withholding tax on interest;
-		exempting Irish funds within the definition of an investment undertaking from withholding tax on interest;

The general anti-avoidance provisions in Sec. 811 of the Taxes Consolidation Act 1997 would be amended to provide that, where the Revenue Commissioners give a final opinion that a transaction is a tax avoidance transaction, the tax liabilities will be backdated to the date when they would have arisen but for the failed avoidance for the purpose of charging interest and the liabilities will also be subject to a 10% surcharge, unless the taxpayer notifies the Commissioners within 90 days