S.I. No. 286/1993 - Double Taxation Relief (Taxes on Income) (Kingdom of Denmark) Order, 1993 Skip to content Disclaimer Feedback Helpdesk Gaeilge Léim go dtí an t-ábhar Séanadh Aiseolas Deasc chabhra

this Article, dividends paid by a company which is a resident of Ireland to a company which is a resident of Denmark and owns at least 25 per cent of the share capital of the company paying the dividends shall be exempt from tax in Denmark. c ) Where a resident of Denmark derives income which, in accordance with the provisions of this Convention shall be taxable only in Ireland or may be taxed in Ireland in accordance with Article 15, Denmark may include this income in the tax base, but shall allow as a deduction from the income tax that part of the income tax, which is attributable to the income derived from Ireland. d ) In the case of a dividend paid by a company which is a resident of Ireland to a company which is a resident of Denmark and which owns at least 25 per cent of the share capital of the company paying the dividend, if the dividend is not exempt from Danish tax in accordance with subparagraph b), the credit for the purposes of subparagraph

a)of this paragraph shall take into account the Irish tax payable by the company paying the dividend in respect of the profits out of which such dividend is paid. 2. In the case of Ireland, subject to the provisions of the laws of Ireland regarding the allowance as a credit against Irish tax of tax payable in a territory outside Ireland (which shall not affect the general principle thereof): a ) Danish tax payable under the laws of Denmark and in accordance with the Convention, whether directly or by deduction, on profits, income or gains from sources within Denmark (excluding in the case of a dividend tax payable in respect of the profits out of which the dividend is paid) shall be allowed as a credit against any Irish tax computed by reference to the same profits, income or gains by reference to which Danish tax is computed. b ) In the case of a dividend paid by a company which is a resident of Denmark to a company which is a resident of Ireland and which controls directly or indirectly 25 per cent or more of the share capital in the company paying the dividend, the credit shall take into account (in addition to the Danish tax, if any, creditable under the provisions of subparagraph
a)of this paragraph) Danish tax payable by the company in respect of the profits out of which such dividend is paid. c ) For the purposes of this paragraph, profits, income and capital gains owned by a resident of Ireland which may be taxed in Denmark shall be deemed to be derived from sources in Denmark. d ) Where in accordance with any provision of the Convention income derived by a resident of Ireland is exempt from tax in that State, Ireland may nevertheless, in calculating the amount of tax on the remaining income of such resident, take into account the exempted income. 3. Where in accordance with the laws of a Contracting State a reduction of tax on the profits (hereafter in this Article referred to as "tax relieved profits") of an enterprise is granted for a temporary period for the purposes of encouraging economic development in that State, the reference in subparagraph
a)of paragraph 1 of this Article to "income tax paid" or in subparagraphs
a)or
b)of paragraph 2 of this Article to "tax payable", as the case may be, shall be deemed as respects any year or accounting period in which such a reduction takes place to include any amount of tax which would have been payable on the profits of an enterprise in that year or accounting period but for the reduction. 4. Where shares the capital gain on which has been taxed in accordance with paragraph 8 of Article 13 are subsequently alienated and the gains from such shares are taxed in the State of residence of the alienator in accordance with paragraph 6 of Article 13 that State shall allow as a deduction from the tax on the gain, an amount equal to the income tax which was paid in the other Contracting State. Such deduction shall not, however, exceed that part of the income tax before the deduction is given which is attributable to the gain which was taxed in the other Contracting State in accordance with paragraph 8 of Article 13. 5. Where, under any provision of this Convention, income or gains is or are wholly or partly relieved from tax in a Contracting State and, under the laws in force in the other Contracting State, an individual, in respect of the said income or gains, is subject to tax by reference to the amount thereof which is remitted to or received in that other State, and not by reference to the full amount thereof, then the relief to be allowed under this Convention in the first-mentioned State shall apply only to so much of the income or gains as is remitted to or received in that other State. 6. Notwithstanding the foregoing provisions of this Article: a ) In the case of tax relieved profits, subparagraph
b)of paragraph 1 and paragraph 3 of this Article shall apply only to profits, or to dividends paid out of such profits, being profits from manufacturing or selling goods or merchandise or rendering services, other than financial services, unless the competent authorities, having consulted each other, agree that they shall apply to profits and dividends from certain financial services, and b ) paragraph 3 of this Article and subparagraph
a)of this paragraph shall apply to 1 January 2000 only. However, by exchange of notes given through diplomatic channels, the period of application may be extended to such date and subject to such modifications and amendments as the competent authorities, having consulted each other, may agree. ARTICLE 24 Non-Discrimination 1. Nationals of a Contracting State shall not be subjected in the other Contracting State to any taxation or any requirement connected therewith, which is other or more burdensome than the taxation and connected requirements to which nationals of that other State in the same circumstances are or may be subjected. This provision shall, notwithstanding the provisions of Article 1, also apply to persons who are not residents of one or both of the Contracting States. 2. The taxation on a permanent establishment which an enterprise of a Contracting State has in the other Contracting State shall not be less favourably levied in that other State than the taxation levied on enterprises of that other State carrying on the same activities. This provision shall not be construed as obliging a Contracting State to grant to residents of the other Contracting State any personal allowances, reliefs and reductions for taxation purposes on account of civil status or family responsibilities which it grants to its own residents. 3. Except where the provisions of paragraph 1 of Article 9, paragraph 4 of Article 11, or paragraph 4 of Article 12, apply, interest, royalties and other disbursements paid by an enterprise of a Contracting State to a resident of the other Contracting State shall, for the purpose of determining the taxable profits of such enterprise, be deductible under the same conditions as if they had been paid to a resident of the first-mentioned State. 4. Enterprises of a Contracting State, the capital of which is wholly or partly owned or controlled, directly or indirectly, by one or more residents of the other Contracting State, shall not be subjected in the first-mentioned State to any taxation or any requirement connected therewith which is other or more burdensome than the taxation and connected requirements to which other similar enterprises of the first-mentioned State are or may be subjected. 5. The provisions of this Article shall, notwithstanding the provisions of Article 2, apply to taxes of every kind and description. ARTICLE 25 Mutual Agreement Procedure 1. Where a person considers that the actions of one or both of the Contracting States result or will result for him in taxation not in accordance with the provisions of this Convention, he may, irrespective of the remedies provided by the domestic law of those States, present his case to the competent authority of the Contracting State of which he is a resident or, if his case comes under paragraph 1 of Article 24, to that of the Contracting State of which he is a national. The case must be presented within three years from the first notification of the action resulting in taxation not in accordance with the provisions of the Convention. 2. The competent authority shall endeavour, if the objection appears to it to be justified and if it is not itself able to arrive at a satisfactory solution, to resolve the case by mutual agreement with the competent authority of the other Contracting State, with a view to the avoidance of taxation which is not in accordance with the Convention. Any agreement reached shall be implemented notwithstanding any time limits in the domestic law of the Contracting States. 3. The competent authorities of the Contracting States shall endeavour to resolve by mutual agreement any difficulties or doubts arising as to the interpretation or application of the Convention. They may also consult together for the elimination of double taxation in cases not provided for in the Convention. 4. The competent authorities of the Contracting States may communicate with each other directly for the purpose of reaching an agreement in the sense of the preceding paragraphs. When it seems advisable in order to reach agreement to have an oral exchange of opinions, such exchange may take place through a Commission consisting of representatives of the competent authorities of the Contracting States. ARTICLE 26 Exchange of Information 1. The competent authorities of the Contracting States shall exchange such information as is necessary for carrying out the provisions of this Convention or of the domestic laws of the Contracting States concerning taxes covered by the Convention insofar as the taxation thereunder is not contrary to the Convention. The exchange of information is not restricted by Article 1. Any information received by a Contracting State shall be treated as secret in the same manner as information obtained under the domestic laws of that State and shall be disclosed only to persons or authorities (including courts and administrative bodies) involved in the assessment or collection of, the enforcement or prosecution in respect of, or the determination of appeals in relation to, the taxes covered by the Convention. Such persons or authorities shall use the information only for such purposes. They may disclose the information in public court proceedings or in judicial decisions. 2. In no case shall the provisions of paragraph 1 be construed so as to impose on a Contracting State the obligation: a ) to carry out administrative measures at variance with the laws and administrative practice of that or of the other Contracting State; b ) to supply information which is not obtainable under the laws or in the normal course of the administration of that or of the other Contracting State; c ) to supply information which would disclose any trade, business, industrial, commercial or professional secret or trade process, or information, the disclosure of which would be contrary to public policy (ordre public). ARTICLE 27 Diplomatic Agents and Consular Officers Nothing in this Convention shall affect the fiscal privileges of diplomatic agents or consular officers under the general rules of international law or under the provisions of special agreements. ARTICLE 28 Territorial Extension 1. This Convention may be extended, either in its entirety or with any necessary modifications to any part of the territory of the Contracting States which is specifically excluded from the application of the Convention or to any State or territory for whose international relations Denmark is responsible, and which imposes taxes substantially similar in character to those to which the Convention applies. Any such extension shall take effect from such date and subject to such modifications and conditions, including conditions as to termination, as may be specified and agreed between the Contracting States in notes to be exchanged through diplomatic channels or in any other manner in accordance with their constitutional procedures. 2. Unless otherwise agreed by both Contracting States, the termination of the Convention by one of them under Article 30 shall also terminate, in the manner provided for in that Article, the application of the Convention to any part of the territory of the Contracting States or to any State or territory to which it has been extended under this Article. ARTICLE 29 Entry into Force 1. The Governments of the Contracting States shall notify each other that the constitutional requirements for the entry into force of this Convention have been complied with. 2. The Convention shall enter into force on the date of receipt of the later of these notifications and shall thereupon have effect: a ) in Denmark: in respect of taxes on income relating to the income year beginning on or after the first day of January next following that in which the Convention enters into force and subsequent income years; b ) in Ireland:
i)as respects income tax and capital gains tax, for any year of assessment beginning on or after the sixth day of April next following the date on which this Convention enters into force;
ii)as respects corporation tax, for any financial year beginning on or after the first day of January in the year next following the year in which this Convention enters into force; c ) notwithstanding subparagraphs
a)and b), in both countries: in respect of taxes on dividends paid on or after a day which is thirty days after the date on which the Convention enters into force. 3. The Convention between the Royal Danish Government and the Government of Ireland for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income and capital signed at Copenhagen on 4 February, 1964, (hereinafter referred to as "the 1964 Convention"), shall cease to have effect from the dates on which this Convention becomes effective in accordance with paragraph 2. 4. The Agreement, dated the 18th October, 1954, between the Government of Ireland and the Royal Danish Government for the avoidance of double taxation on income derived from the business of sea and air transport shall not have effect for any period for which this Convention has effect. ARTICLE 30 Termination This Convention shall remain in force indefinitely but either of the Contracting States may on or before 30th June in any calendar year beginning after the expiration of a period of five years from the date of its entry into force, give to the other Contracting State, through diplomatic channels, written notice of termination. In such event, the Convention shall cease to have effect: a ) in Denmark: in respect of taxes on income relating to the income year next following that in which the notice is given and subsequent income years; b ) in Ireland:
i)as respects income tax and capital gains tax, for any year of assessment beginning on or after the sixth day of April next following the date on which the period specified in the said notice of termination expires;
ii)as respects corporation tax, for any financial year beginning on or after the first day of January next following the date on which the period specified in the said notice of termination expires. In witness whereof the undersigned, duly authorised thereto by their respective Governments, have signed this Convention. Done in duplicate at Dublin this 26th day of March, 1993, in the English language. For the Government of Ireland For the Government of the Kingdom of Denmark Protocol At the moment of signing the Convention between the Government of Ireland and the Government of the Kingdom of Denmark for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income, the undersigned have agreed upon the following provisions, which shall form an integral part of the Convention: 1. With reference to paragraph 2 of Article 6, it is understood that the term "immovable property" also includes:
i)any option or similar right in respect of any property which, under the provisions of that paragraph, is immovable property,
ii)rights to explore for or to exploit mineral deposits, sources and other natural resources and rights to amounts computed by reference to the amount or value of production from such resources. 2. Where under the laws of a Contracting State an amount is treated as a dividend or as interest, as the case may be, but that amount would not be so treated under the laws of the other Contracting State, nothing in paragraph 5 of Article 10, paragraph 2 of Article 11 or paragraphs 1 and 2 of Article 23 shall require that other Contracting State to apply the same treatment as in the first-mentioned Contracting State. However the competent authorities shall endeavour by such means, if any, as seems appropriate to them, including the acceptance by both States of the same treatment of the amount in question, to avoid any double taxation. The mutual agreement procedures shall apply for this purpose. 3. With reference to paragraph 2 of Article 13, it is understood, that the word "principally" shall be construed as referring to shares deriving at least 50 per cent of their value directly or indirectly from immovable property situated in a Contracting State. 4. With reference to subparagraph
d)of paragraph 2 of Article 15, employees resident in a Contracting State shall be deemed to be hired out if they are placed at another person's disposal by a person (the employment agent) to carry out work in the business of such other person (the principal), situated in another Contracting State, provided that the principal is resident or has a permanent establishment in that other State, and that the employment agent has no responsibility and does not bear any risk in respect of the result of the work. 5. With reference to subparagraph a)

Article 23

it is understood, that the paragraph may apply to the profits from genuine banking and insurance business including income and dividends from investments held for the purposes of such a business. In witness whereof the undersigned, duly authorised thereto by their respective Governments, have signed this Protocol. Done in duplicate at Dublin this 26th day of March, 1993, in the English language. For the Government of Ireland For the Government of the Kingdom of Denmark 26 March, 1993 H.E. Mr. C. U. Haxthausen, Ambassador Extraordinary and Plenipotentiary of the Kingdom of Denmark. Your Excellency, I have the honour to refer to the Convention signed today between the Government of Ireland and the Government of the Kingdom of Denmark for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income and to inform you on behalf of the Government of Ireland of the following: In the course of the negotiations leading to the conclusion of the Convention signed today, the negotiators developed and agreed upon a memorandum of understanding intended to give guidance to the taxpayers of our two countries in interpreting subparagraph a)

Article 23

(Methods for Elimination of Double Taxation) insofar as it relates to financial services activities. This memorandum of understanding, attached to this Note, represents the views of the Government of Ireland with respect to subparagraph a)

Article 23insofar as it relates to financial services activities.

If your Government shares the above mentioned understanding I propose that this Note and your affirmative answer will indicate that our Governments share a common understanding of the role of the memorandum of understanding relating to subparagraph a)

Article 23

. This agreement shall enter into force on the same date as the entry into force of the said Convention. I avail myself of this opportunity to renew to Your Excellency the assurance of my highest consideration. Dick Spring T.D. Tánaiste and Minister for Foreign Affairs MEMORANDUM OF UNDERSTANDING As respects subparagraph a)

Article 23

, at the time of entering into force of this Convention the competent authorities, having consulted each other, have agreed that — the purpose of the consultation process referred to in that subparagraph in relation to financial services is to prevent financial services based schemes whose sole or chief purpose is the general avoidance of taxation from gaining access to the benefits of subparagraph b) of paragraph 1 and paragraph 3 and both competent authorities avow and affirm that there is no desire or intent to prevent genuine commercially based financial services projects from gaining access to those benefits and it is avowed and affirmed that such projects will gain such access, — they shall devise a set of procedures to ensure that the consultation process shall be carried out without undue delay, so that the acceptance or rejection of a project will be communicated to the promoters as quickly as possible. A resident of either country may seek the assistance of either of the competent authorities if the resident is of the opinion that the other competent authority is causing undue delay in carrying out its part of the consultation process, and — the competent authorities may enter into agreement from time to time that certain clearly defined types of financial services are acceptable to both competent authorities and may agree that such financial services shall be entitled to the aforementioned benefits without the need to go through the consultation process. It is further agreed that the substance of such agreements may be made public by either or both competent authorities. Dublin, 26 March, 1993 Dear Tánaiste, I have the honour to acknowledge receipt of your Note of today's date which reads as follows: "I have the honour to refer to the Convention signed today between the Government of Ireland and the Government of the Kingdom of Denmark for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income and to inform you on behalf of the Government of Ireland of the following: In the course of the negotiations leading to the conclusion of the Convention signed today, the negotiators developed and agreed upon a memorandum of understanding intended to give guidance to the taxpayers of our two countries in interpreting subparagraph a)

Article 23

Article 23insofar as it relates to financial services activities.

Article 23

. This agreement shall enter into force on the same date as the entry into force of the said Convention." I have the honour to inform you that my Government agrees to the above. I avail myself of this opportunity to renew to you, Tánaiste, the assurance of my highest consideration. C. U. Haxthausen Mr. Dick Spring T.D. Tánaiste and Minister for Foreign Affairs Dublin MEMORANDUM OF UNDERSTANDING As respects subparagraph a)

Article 23

b)of paragraph 1 and paragraph 3 and both competent authorities avow and affirm that there is no desire or intent to prevent genuine commercially based financial services projects from gaining access to those benefits and it is avowed and affirmed that such projects will gain such access, — they shall devise a set of procedures to ensure that the consultation process shall be carried out without undue delay, so that the acceptance or rejection of a project will be communicated to the promoters as quickly as possible. A resident of either country may seek the assistance of either of the competent authorities if the resident is of the opinion that the other competent authority is causing undue delay in carrying out its part of the consultation process, and — the competent authorities may enter into agreement from time to time that certain clearly defined types of financial services are acceptable to both competent authorities and may agree that such financial services shall be entitled to the aforementioned benefits without the need to go through the consultation process. It is further agreed that the substance of such agreements may be made public by either or both competent authorities. Dublin, 26 March, 1993 Dear Tánaiste, With reference to the Convention between the Government of Ireland and the Government of the Kingdom of Denmark for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income signed today, I have the honour to state that it is the understanding of the Government of the Kingdom of Denmark that the Convention shall be without prejudice to the question of the overlapping continental shelf claims made by the Government of Ireland and the Government of the Kingdom of Denmark, respectively. If your Government shares the above mentioned understanding I propose that this note and your affirmative answer constitute an agreement between our two countries to that effect. This agreement shall enter into force on the same date as the entry into force of the said Convention. Please accept, Tánaiste, the assurances of my highest consideration. C. U. Haxthausen Mr. Dick Spring T.D. Tánaiste and Minister for Foreign Affairs Dublin 26 March, 1993 H.E. Mr. C. U. Haxthausen, Ambassador Extraordinary and Plenipotentiary of the Kingdom of Denmark. Your Excellency, I have the honour to acknowledge receipt of Your Excellency's Note of today's date which reads as follows: "With reference to the Convention between the Government of Ireland and the Government of the Kingdom of Denmark for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income signed today, I have the honour to state that it is the understanding of the Government of the Kingdom of Denmark that the Convention shall be without prejudice to the question of the overlapping continental shelf area claims made by the Government of Ireland and the Government of the Kingdom of Denmark, respectively. If your Government shares the above mentioned understanding I propose that this note and your affirmative answer constitute an agreement between our two Governments to that effect. This agreement shall enter into force on the same date as the entry into force of the said Convention." In response I have the honour to state that the Government of Ireland accepts the proposal of the Government of the Kingdom of Denmark and agrees that Your Excellency's Note and the present Note constitute an agreement between our two Governments to that effect. I avail myself of this opportunity to renew to Your Excellency the assurance of my highest consideration. Dick Spring T.D. Tánaiste and Minister for Foreign Affairs GIVEN under the Official Seal of the Government, this 21 day of September, 1993. ALBERT REYNOLDS, Taoiseach. EXPLANATORY NOTE This Order gives the force of law in Ireland to the Convention with the Kingdom of Denmark set out in the Schedule to the Order. The Convention provides for the allocation of taxing rights between Ireland and Denmark and for the granting of relief from double taxation with regard to items of income and capital gains which, under the laws of Ireland and the laws of Denmark, may be taxed in both countries. For example, items such as business profits, interest, royalties and gains on movable property not arising through or connected with a permanent establishment in the source country, profits from the operation of ships or aircraft in international traffic and non-government pensions are taxable only in the country of residence of the recipient. On the other hand, remuneration in respect of services rendered to a government of one of the countries is normally taxable only in that country, i.e. the country of source. Where both countries continue to have taxing rights, for example, with regard to business profits arising through a permanent establishment which an enterprise of one country has in the other country, certain dividends received in one country from the other country or payments made under social security legislation, the Convention provides that the country of residence of the recipient will allow a credit against its own tax for the tax imposed on the same income by the country of source. Thus double taxation is relieved. Capital gains arising from the disposal of immovable property and of shares linked with immovable property may be taxed 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 residence of the taxpayer unless they arise from the disposal of assets of a permanent establishment or fixed base which the taxpayer has in the other country. Double taxation is relieved by the granting of a credit in the country of residence for tax paid in the country where the property is located. Special provisions have been included in the Convention which preserve the taxation rights of a State in respect of income and capital gains arising from the exploration or exploitation of the sea bed and subsoil for hydrocarbons in the territory of that State. Drilling rig activities carried on for more than 365 days within any period of 18 months will constitute a permanent establishment. In the case of dividends flowing from Ireland to Denmark, the Convention grants to Danish portfolio investors* a tax credit in respect of Irish dividends. Where appropriate, repayment of the tax credit can be obtained subject to a liability to Irish tax not exceeding 15 per cent of the aggregate of the dividend and the tax credit. No repayment of a tax credit will be made in respect of a dividend, the beneficial owner of which is a direct investor**. However, no withholding taxes are levied on such a dividend. * A share-holder who is an individual or a company, other than a company which controls directly or indirectly 25 per cent or more of the voting power in the company resident in Ireland which pays the dividend ** A company which controls directly or indirectly 25 per cent or more of the voting power in the company paying the dividend. In the case of dividends flowing from Denmark to Ireland, the Convention provides for a reduction of Danish withholding tax from 30 per cent to 15 per cent in the case of Irish portfolio investors. Dividends flowing to an Irish direct investor will be exempt from the Danish withholding tax. Under the terms of Article 23, the benefit of any Irish tax incentive relief is preserved for profits or dividends from manufacturing, the selling of goods or merchandise or the rendering of services, other than financial services, flowing from an Irish branch or subsidiary to a Danish parent company. Dividends paid by an Irish company to a Danish company which controls at least 25 per cent of the share capital of the Irish company will be exempt from Danish tax. In the case of profits derived by a Danish company from the activities of a branch of that company in Ireland, Denmark will allow as a deduction from the Danish tax due on that income an amount equal to the full rate of Irish tax on that income, even if that income has only been subject to Irish tax at the rate of 10 per cent, in accordance with the Irish tax incentive legislation. These exemption and matching credit provisions will only apply to 1 January, 2000, though this period may be extended following consultation between the competent authorities. As far as financial services are concerned, the exemption or matching credit provisions will apply only where the competent authorities agree that they should. A consultation process has been provided for in the Memorandum of Understanding annexed to the Letters exchanged at the signing of the Convention to ensure such an agreement between the competent authorities can be reached without undue delay. A provision of the Protocol to the Convention provides that profits from genuine banking and insurance business may qualify for full reliefs. The two documents annexed to this note set out details of the consultation process and the principles which financial services activities must abide by in order to qualify for the exemption and matching credit provisions. Provision is made for safeguarding nationals and enterprises of one country against discriminatory taxation in the other country, for consultation between the competent authorities of the two countries for the purpose of resolving any difficulties or doubts arising as to the interpretation or application of the Convention and for the exchange of such information between these authorities as is necessary for carrying out the provisions of the Convention or of the domestic law of either State in relation to the taxes covered by the Convention. The Convention will be effective in Ireland as follows in respect of taxes other than taxes on dividends: (
i)as respects income tax and capital gains tax, for any year of assessment beginning on or after the sixth day of April next following the date on which the Convention enters into force; (
ii)as respects corporation tax, for any financial year beginning on or after the first day of January in the year next following the year in which the Convention enters into force. The Convention will be effective in Denmark in respect of taxes on income, other than dividends, relating to the income tax year beginning on or after the first day of January next following that in which the Convention enters into force and subsequent income years. The Convention will have effect in both countries in respect of dividends paid on or after a day which is thirty days after the date on which the Convention enters into force. APPENDICES Subparagraph a )

Article 23

, as expanded by the Memorandum of Understanding provides for a consultation process to ascertain if certain financial services activities qualify for the benefits of the reliefs set out in Article

The competent authorities of both countries have agreed details of such a consultation process together with principles for acceptance that a financial services project is acceptable for the purposes of Article 23 and details are set out at Appendices I and II hereunder. It should be noted that these documents do not form part of the Convention, Protocol or Exchange of Letters. Appendix I CONSULTATION PROCESS FOR THE APPROVAL OF PROJECTS FOR THE PURPOSES OF THE DENMARK/IRELAND TAX TREATY
Proposals for a project may be submitted to either competent authority (hereinafter referred to as the "first mentioned authority").
It will be the responsibility of the promoters of the project to ensure that all aspects of the project are made known to the first mentioned authority. This shall include not only the aspects of the project to be carried on in the Contracting State in which the project will be located but any matters which would be of concern to the Revenue authorities of the other Contracting State with regard to the intended activities of the promoters or their investors. Failure to disclose a material fact or any unapproved alteration of a material fact may result in any acceptance of a project being withdrawn from such date which may be a date retrospective to the date approval was given, or such later date as the competent authorities shall agree.
The first mentioned authority shall examine the project after obtaining such additional information, if any, from the promoters as it deems necessary.
The first mentioned authority having examined the project and made a decision as to its acceptability or otherwise shall pass the papers on the project to the other competent authority indicating its decision in relation to the project and the reasons for the decision. If the other competent authority agrees with the decision of the first mentioned competent authority it shall so communicate that agreement to the first mentioned authority and, accordingly, the project shall be accepted or rejected as the case may be. The promoters shall be so informed by the first mentioned authority. In the case of a rejection the reasons for the rejection shall be communicated to the promoters who may, if they so wish, resubmit the project with the objectionable aspects removed or may make further representations with regard to any of the objectionable points raised by the competent authorities.
If there is not agreement, the other competent authority shall indicate to the first mentioned competent authority the reasons why it so disagrees. The first mentioned competent authority may, if it so deems appropriate, attempt to arrive at a reconciliation between the conflicting views of the competent authorities with such assistance from the promoters as shall be deemed appropriate. Alternatively they may refer the matter back to the promoters for amendment or further representation as at 4 above.
Both competent authorities pledge themselves to ensuring that the aforementioned consultation procedures shall be implemented with the maximum degree of dispatch consistent with the needs of ensuring that a correct decision is made.
On the basis of the information provided by the promoter of the project, the competent authorities, if requested, will give a non-binding advance indication as to whether the project is likely to be approved or rejected, always subject to confirmation following full investigation.
The substance of these consultation procedures may be made public by either or both competent authorities. Appendix II PRINCIPLES FOR THE ACCEPTANCE THAT A FINANCIAL SERVICES PROJECT IS GENUINE WITHIN THE TERMS OF THE CONSULTATION PROCESS These principles are issued for illustrative purposes only. They do not purport to be exclusive or exhaustive or to have any legal standing and are not binding on either competent authority. Depending on the nature of the project the absence of one or more of the guidelines need not necessarily lead to a rejection of the project although some of the guidelines such as 1 and 2, for example, are of greater importance than others and their contravention would lead to the rejection of a project.
The project must not have as one of its objectives the reduction of the tax liability, directly or indirectly, of any individual resident in either Contracting State.
A genuine commercially viable product package must be visible involving real trading in real assets or the carrying out of other genuine commercial financial services related activities by way of real trading or as an integral part of a larger trading operation.
Where the activity involves the raising of a body of funds for a profit making venture or insurance, there must be a clearly-demonstrated positive relationship and proportion between the level of funds raised for the project and the use of such funds for the specific venture or the risk to be covered. There must be a reasonable expectation of a commercial arm's length return on the funds. The venture must be carried on as a trade.
The method of sourcing of funds (i.e. borrowed or surplus) will be taken into account in assessing the acceptability of a project including cases arising under 2 or
The enterprise must either stand alone as a genuine business operation complete with the badges of substance: personnel, offices and appropriate office equipment, marketing, accounts etc. or be carried on in association with another company which possesses those qualities in due measure in relation to the enterprise as would be present if the enterprise were to stand alone. In either case the project must be operating under a specific business plan (see below).
The project should have the capacity to be able to demonstrate through a reasonable business plan which contains specific information on the nature of the proposed activities that it has the ability and specific expansion plan to generate enhanced activity.
A genuine business operation can have periods of passive investment in securities or deposits for genuine or exceptional reasons in the course of an active financial services business.
A project whose main activity is passive investment in securities or deposits will not be approved.
The contents of these principles may be made public by either or both competent authorities. Privacy Statement Accessibility European Legislation Identifier (PDF) Open Data License Ráiteas Príobháideachais Inrochtaineacht Aitheantóir Eorpach Reachtaíochta (ELI) Ceadúnas Sonraí Oscailte Liosta Fianán © Government of Ireland. Oireachtas Copyright Material is reproduced with the permission of the Houses of the Oireachtas © Rialtas na hÉireann. Atáirgtear ábhar faoi Chóipcheart le cead ó Thithe an Oireachtais

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