(1) Part 8 of the Principal Act is amended by inserting the following Chapter after Chapter 6:

"Chapter 7 Certain interest from sources within the European Communities

267M. Tax rate applicable to certain deposit interest received by individuals.

(1) In this section -

'specified interest' means interest arising in a Member State of the European Communities other than the State which would be interest payable in respect of a relevant deposit within the meaning of section 256(1) if -

(a) in the definition of 'relevant deposit' in section 256(1) -

(i) the following were substituted for paragraphs (c) and (d):

'(c) which, in the case of a relevant deposit taker which, by virtue of the law of a Member State of the European Communities other than the State, is resident for the purposes of tax in such a Member State, is held at a branch of the relevant deposit taker situated in a territory which is not a Member State,

(d) which, in the case of a relevant deposit taker not so resident in a Member State of the European Communities for the purposes of tax, is held otherwise than at a branch of the relevant deposit taker situated in a Member State,',

and

(ii) paragraph (g) were deleted,

and