The Principal Act is amended in Chapter 3 of Part 5 by inserting the following section after section 118A -

"118B.

(1) In this section -

' approved transport provider ' has the same meaning as in section 118(5A);

' exempt employee benefit ' means a benefit specifically approved by the Revenue Commissioners which is referred to in subsection (2) (a) (i) and (ii);

' salary sacrifice agreement ' means any arrangement under which an employee forgoes the right to receive any part of his or her remuneration due under his or her terms or contract of employment, and in return his or her employer agrees to provide him or her with a benefit;

' approved profit sharing scheme ' shall be construed in accordance with section 510.

(2)

(a) The amount of the remuneration forgone under any salary sacrifice arrangement specifically approved by the Revenue Commissioners in relation to -

(i) travel passes issued by an approved transport provider under section 118(5A), and

(ii) shares appropriated to employees and directors under an approved profit sharing scheme within the meaning of Chapter 1 of Part 17, which are exempt from a charge to tax by virtue of section 510(4),

shall be exempt from tax.