697T. Average taxable profits for purposes of temporary solidarity contribution

(1) Subject to subsections (2) and (3), the average taxable profits in respect of the reference years, in relation to relevant activities carried on by an energy company, means—

(a) where the energy company commenced the relevant activities on or before 31 December 2018, the average annual taxable profits in respect of the years commencing on 1 January 2018 and ending on 31 December 2021,

(b) where the energy company commenced the relevant activities on or after 1 January 2019 but before 1 January 2020, the average annual taxable profits in respect of the years commencing on 1 January 2019 and ending on 31 December 2021,

(c) where the energy company commenced the relevant activities on or after 1 January 2020 but before 1 January 2021, the average annual taxable profits in respect of the years commencing on 1 January 2020 and ending on 31 December 2021, or

(d) where the energy company commenced the relevant activities on or after 1 January 2021 but before 1 January 2022, the taxable profits in respect of the year commencing on 1 January 2021 and ending on 31 December 2021,

and where the average taxable profits in respect of the reference years in accordance with paragraph (a), (b), (c) or (d), as the case may be, is less than zero, the average taxable profits in respect of the reference years shall be deemed to be zero.

(2) For the purposes of subsection (1), where in a year commencing on or after 1 January 2018 but before 1 January 2022, an energy company carried on relevant activities for part of a year only, the taxable profits in respect of that year shall be determined by the following formula—

A/B x 12

where—

A is the taxable profits in the year, and

B is the number of months in that year during which the relevant activities were carried on by the energy company.

(3) (a) Where a company ceases to carry on relevant activities (in this subsection referred to as the ‘predecessor’) in the year commencing on 1 January 2022 or the year commencing on 1 January 2023, as the case may be, and another company begins to carry on those relevant activities (in this subsection referred to as the ‘successor’), for the purpose of determining the temporary solidarity contribution chargeable on the predecessor in the year in which the predecessor ceases to carry on the relevant activities, the average taxable profits in respect of the reference years for the predecessor shall be determined by the following formula—

where—

A is the average taxable profits in respect of the reference years of the predecessor in relation to those relevant activities,

B is the length of the period from the beginning of the year in which the predecessor ceases to carry on those relevant activities to the date the predecessor ceases to carry on those relevant activities, and

C is the length of the year.

(b) Subject to paragraph (c), where the predecessor ceases to carry on relevant activities in the year commencing on 1 January 2022 or the year commencing on 1 January 2023, as the case may be, and the successor begins to carry on those relevant activities, for the purpose of determining the temporary solidarity contribution chargeable on the successor in respect of the year in which the successor commences to carry on the relevant activities, the average taxable profits in respect of the reference years for the successor shall be determined by the following formula—

where—

A is the average taxable profits in respect of the reference years of the predecessor in relation to those relevant activities,

B is the length of the period from the date the successor begins to carry on those relevant activities to the end of the year in which the successor begins to carry on those relevant activities, and

C is the length of the year.

(c) Where the predecessor ceases to carry on relevant activities in the year commencing on 1 January 2022 and the successor begins to carry on those relevant activities in that year, for the purpose of determining the temporary solidarity contribution chargeable on the successor for the year 2023, the average taxable profits in respect of the reference years shall be the average taxable profits in respect of the reference years of the predecessor in relation to those relevant activities determined in accordance with this section and no apportionment shall be required under paragraph (b).