Finance Act 1973

Section 42.

SCHEDULE 17 Double Taxation Agreement with Republic of Ireland

AGREEMENT BETWEEN THE GOVERNMENT OF THE UNITED KINGDOM OF GREAT BRITAIN AND NORTHERN IRELAND AND THE GOVERNMENT OF THE REPUBLIC OF IRELAND WITH RESPECT TO CERTAIN EXEMPTIONS FROM TAX

The Government of the United Kingdom of Great Britain and Northern Ireland and the Government of the Republic of Ireland ;

With a view to making such alterations in the Agreement made the 14th April 1926, between the British Government and the Government of the Irish Free State in respect of Double Income Tax as may be necessary in consequence of the alterations in the British Income Tax Acts effected by the British Finance Acts 1971 and 1972 ;

Have agreed as follows:

Article 1

(1) In Article 1(a) of the said Agreement the words " British income tax" shall as respects the year 1973-74 and any subsequent year be construed as meaning the basic rate of income tax and the reference to British surtax shall be construed as meaning the excess of liability to British income tax over what it would be if all British income tax were charged at the basic rate only.

(2) Article 1(a) of the said Agreement shall be further amended by the addition of:

“Where the income is a dividend derived from a company which is resident in the United Kingdom, such a person shall be entitled to payment of the tax credit in respect thereof to which an individual resident in the United Kingdom would have been entitled had he received that dividend:

Provided that there shall be no such entitlement to the tax credit where the recipient of the dividend is a company which either alone or together with one or more associated companies controls directly or indirectly not less than 10 per cent, of the voting power in the company paying the dividend. For the purpose of this paragraph two companies shall be deemed to be associated if one is controlled directly or indirectly by the other, or both are controlled directly or indirectly by a third company.

The term ' dividend ' includes any item which under the law of the United Kingdom is treated as a distribution of a company.”

Article 2

Article 1(b) of the said Agreement shall be amended by the addition of:

“Where the income is a dividend paid by a company which is resident in the Republic of Ireland to a company which is resident in the United Kingdom and which controls directly or indirectly not less than 10 per cent, of the voting power in the former company, the exemption shall apply only to income tax in excess of 5 per cent, of the dividend.

The term ' dividend' includes any payment or other transaction which under the law of the Republic of Ireland is deemed to be a dividend.”

Article 3

In Article 2 of the said Agreement, as amended by Article 2 of the Agreement of 25th April 1928, any reference to the standard rate of British income tax shall be construed as meaning the basic rate of British income tax and any reference to British surtax shall be construed as meaning the excess of liability to British income tax over what it would be if all British income tax were charged at the basic rate only.

Article 4

This Agreement shall enter into force on the exchange of Notes confirming that the necessary steps have been taken to give it the force of law in the United Kingdom and the Republic of Ireland, and shall thereupon have effect:

(a) as respects dividends paid on or after 6th April 1973 and not later than 5th April 1975 ; and

(b) in other respects for any year of assessment beginning on or after 6th April 1973.

In witness whereof the undersigned, duly authorised thereto by their respective Governments, have signed this Agreement.

Done in two originals at London this 2nd day of May, 1973.

For the Government of the United Kingdom of Great Britain and Northern Ireland:	For the Government of the Republic of Ireland:
Anthony Kershaw	Donal O'Sullivan.