The Double Taxation Relief (Taxes on Income) (Republic of Ireland) Order 1976

EXPLANATORY NOTE

The Convention with the Republic of Ireland scheduled to this Order replaces Agreements made in 1926 and 1949, and amending agreements. Under it shipping and air transport profits, certain trading profits not arising through a permanent establishment, interest, royalties, pensions (other than Government pensions) and the earnings of temporary business visitors are (subject to certain conditions) to be taxed only in the country of the taxpayer's residence. Government salaries and pensions are normally to be taxed by the paying Government only. Certain payments made to visiting students are (subject to certain conditions) to be exempt in the country visited.

Where income continues to be taxable in both countries, relief from double taxation is to be given by the country of the taxpayer's residence for the tax payable in the country of origin of the income.

The Convention provides that where a company which is a resident of one of the countries pays a dividend to a resident of the other country (other than a company which controls 10 per cent or more of the voting power in the paying company) the recipient is, subject to certain conditions, to receive the tax credit to which an individual resident in the country of which the paying company is a resident would be entitled had he received that dividend. Income tax at a rate not exceeding 15 per cent on the aggregate of the dividend and the tax credit may be charged in the country of source of the dividend, unless the recipient is a charity or superannuation scheme exempt from tax in the other country. Where the recipient is such a charity or scheme, the source country may not impose any income tax on the dividend and tax credit.

There is provision for the taxation of capital gains on immovable property, and on certain shares linked to immovable property, by the country in which the property is situated. Capital gains arising from the disposal of other property are normally to be taxed only in the country of the taxpayer's residence unless they arise from the disposal of assets of a permanent establishment or fixed base which the taxpayer has in the other country.

There are also provisions safeguarding nationals and enterprises of one country against discriminatory taxation in the other country and for the exchange of information and consultation between the taxation authorities of the two countries.

The Convention is in general to take effect in the United Kingdom as respects income tax and capital gains tax for the tax year 1976-77 and subsequent years, as respects corporation tax for the financial year commencing on 1 April 1976 and subsequent years, and as respects petroleum revenue tax for any chargeable period beginning on or after 1 January 1976. There are transitional provisions relating to income tax on remuneration from employments and Government pensions and to capital gains tax.