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Great Britain and Northern Ireland) Order, 1998 S.I. No. 494/1998 - Double Taxation Relief (Taxes on Income and Capital Gains) (United Kingdom
Great Britain and Northern Ireland) Order, 1998 AmendmentsLeasuithe S.I. No. 494
1998. DOUBLE TAXATION RELIEF (TAXES ON INCOME AND CAPITAL GAINS) (UNITED KINGDOM
GREAT BRITAIN AND NORTHERN IRELAND) ORDER, 1998 WHEREAS it is enacted by sections 826
the Taxes Consolidation Act, 1997 (No. 39
1997), that if the Government by order declare that arrangements specified in the order have been made with the government
any territory outside the State in relation to affording relief from double taxation respect
income tax, corporation tax or capital gains tax and any taxes
a similar character, imposed by the laws
the State or by the laws
that territory, and that it is expedient that those arrangements should have the force
law, the arrangements shall, notwithstanding anything in any enactment other than section 168
the Taxes Consolidation Act, 1997 , have the force
law: AND WHEREAS it is further enacted by section 826
the Taxes Consolidation Act, 1997 , that where such an order is proposed to be made, a draft
the order shall be laid before Dáil Eireann and the order shall not be made until a resolution approving
the draft has been passed by Dáil Eireann: AND WHEREAS a draft
the following Order has been laid before Dáil Eireann and a resolution approving
the draft has been passed by Dáil Eireann: NOW, the Government, in exercise
the powers conferred on them by sections 826
the Taxes Consolidation Act, 1997 (No. 39
1997), hereby order as follows: 1. This Order may be cited as the Double Taxation Relief (Taxes on Income and Capital Gains) (United Kingdom
Great Britain and Northern Ireland) Order,
which is set out in the Schedule to this Order have been made with the Government
the United Kingdom
Great Britain and Northern Ireland in relation to affording relief from double taxation in respect
income tax, corporation tax or capital gains tax and any taxes
a similar character, imposed by the laws
the State or by the laws
the United Kingdom
Great Britain and Northern Ireland, and (b) that it is expedient that those arrangements should have the force
law. SCHEDULE PROTOCOL BETWEEN THE GOVERNMENT
IRELAND AND THE GOVERNMENT
THE UNITED KINGDOM
GREAT BRITAIN AND NORTHERN IRELAND AMENDING THE CONVENTION FOR THE AVOIDANCE
DOUBLE TAXATION AND THE PREVENTION
FISCAL EVASION WITH RESPECT TO TAXES ON INCOME AND CAPITAL GAINS SIGNED AT DUBLIN ON 2ND JUNE 1976, AS AMENDED BY THE PROTOCOLS SIGNED AT DUBLIN ON 28TH OCTOBER 1976 AND AT LONDON ON 7TH NOVEMBER 1994 The Government
Ireland and the Government
the United Kingdom
Great Britain and Northern Ireland; Desiring to conclude a Protocol to amend the Convention between the Contracting Parties for the Avoidance
Double Taxation and the Prevention
Fiscal Evasion with respect to Taxes on Income and Capital Gains, signed at Dublin on 2nd June 1976, as amended by the Protocols signed at Dublin on 28th October 1976 and at London on 7th November 1994 (hereinafter referred to as "the Convention"); Have agreed as follows: ARTICLE I Article 5
the Convention shall be amended as follows: (a) sub-paragraph (g)
paragraph
natural resources; (
fshore in a Contracting State in connection with the exploration or exploitation
the sea bed and sub-soil and their natural resources situated in that Contracting State shall be deemed to be carrying on a business through a permanent establishment in that Contracting State." ARTICLE II Article 11
the Convention shall be deleted and replaced by the following: "ARTICLE 11 DIVIDENDS
a Contracting State by a resident
the other Contracting State may be taxed in that other Contracting State. Such dividends may also be taxed in the Contracting State
which the company paying the dividends is a resident, and according to the laws
that State, but provided the beneficial owner
the dividends is a resident
the other Contracting State the tax so charged shall not exceed: (a) 5 per cent.
the gross amount
the dividends if the beneficial owner is a company which controls directly or indirectly 10 per cent. or more
the voting power in the company paying the dividends; (b) in all other cases 15 per cent.
the gross amount
the dividends.
paragraph
this Article shall not apply to dividends derived from a company which is a resident
a Contracting State by a resident
the other Contracting State if the competent authority
that other Contracting State certifies that such dividends are not subject to tax in that other Contracting State by reason
provisions in the laws
that other Contracting State which afford relief from taxation to charities and superannuation schemes, as such, or to insurance companies in respect
their pension business, being provisions which were in force at the date
signature
this Convention or which, if they have been modified since that date, have been modified only in minor respects so as not to affect their general character. Such dividends shall be exempt from any tax in the first-mentioned Contracting State which is chargeable on dividends. (b) In this paragraph the term "superannuation scheme" means: (i) in the case
Ireland, a sponsored superannuation scheme within the meaning
section 783
the Taxes Consolidation Act, 1997 or a trust scheme or part
a trust scheme approved under section 784 or section 785
that Act; (ii) in the case
the United Kingdom, a retirement annuity contract approved under section 620 or section 621
the Income and Corporation Taxes Act, 1988, a personal pension scheme approved under section 631
that Act or a relevant superannuation scheme within the meaning
section 645
that Act.
the United Kingdom is treated as a distribution and for Irish tax purposes includes any item which under the law
Ireland is treated as a distribution.
paragraphs
this Article shall not apply where the beneficial owner
the dividends, being a resident
one
the Contracting States, has in the other Contracting State a permanent establishment and the holding by virtue
which the dividends are paid is effectively connected with a business carried on through that permanent establishment. In such case the provisions
a Contracting State derives profits or income from the other Contracting State, that other State may not impose any tax on the dividends paid by the company, except insofar as such dividends are paid to a resident
that other State or insofar as the holding in respect
which the dividends are paid is effectively connected with a permanent establishment situated in that other State, nor subject the company's undistributed profits to a tax on the company's undistributed profits, even if the dividends paid or the undistributed profits consist wholly or partly
profits or income arising in such other State." ARTICLE III Paragraph
the Convention shall be deleted and replaced by the following: "
this Article shall not apply if it was the main purpose or one
the main purposes
any person concerned with the creation or assignment
the debt-claim in respect
which the interest is paid to take advantage
this Article by means
that creation or assignment." ARTICLE IV Article 14
the Convention shall be deleted and replaced by the following: "ARTICLE 14 CAPITAL GAINS
a Contracting State from the alienation
immovable property situated in the other Contracting State may be taxed in that other State.
a Contracting State from the alienation
: (a) shares, other than shares in which there is substantial and regular trading on a Stock Exchange, deriving their value or the greater part
their value directly or indirectly from immovable property situated in the other Contracting State, or (b) an interest in a partnership or trust the assets
which consist principally
immovable property situated in the other Contracting State, or
shares referred to in sub-paragraph (a)
this paragraph, may be taxed in that other State.
movable property forming part
the business property
a permanent establishment which an enterprise
a Contracting State has in the other Contracting State, including such gains from the alienation
such a permanent establishment (alone or with the whole enterprise), may be taxed in that other State.
this Article and notwithstanding the provisions
paragraph
this Article, gains derived by a resident
a Contracting State from the alienation
ships or aircraft operated in international traffic, or movable property pertaining to the operation
such ships or aircraft, shall be taxable only in that Contracting State.
any property other than that referred to in paragraphs
this Article shall be taxable only in the Contracting State
which the alienator is a resident. Provided that where under the law
that Contracting State an individual, in respect
such gains, is subject to tax thereon by reference only to the amount thereof which is received in that Contracting State, the foregoing provisions
this paragraph shall not operate in relation to so much
such gains as is not received in that Contracting State.
paragraph
this Article shall not affect the right
a Contracting State to levy according to its law a tax on gains from the alienation
any property derived by an individual who is a resident
the other Contracting State and has been a resident
the first-mentioned Contracting State at any time during the three years immediately preceding the alienation
the property.
this Article the term "immovable property" means immovable property as defined in paragraph
this Convention." ARTICLE V Article 18
the Convention shall be deleted and replaced by the following: "ARTICLE 18 GOVERNMENT SERVICE
services rendered to that State or subdivision or authority, in the discharge
functions
a governmental nature, shall be taxable only in that State. (b) However, such salaries, wages and other similar remuneration shall be taxable only in the other Contracting State if the services are rendered in that State and the individual is a resident
that State who: (i) is a national
that State; or (ii) did not become a resident
that State solely for the purpose
rendering the services.
funds created by, a Contracting State or a political subdivision or a local authority thereof to an individual in respect
services rendered to that State or subdivision or authority, in the discharge
functions
a governmental nature, shall be taxable only in that State. (b) However, such pension shall be taxable only in the other Contracting State if the individual is a resident
, and a national
, that State.
this Article shall respectively apply to salaries, wages and other similar remuneration
an individual employed in an educational institution and to any pension in respect
such employment
an individual formerly so employed, paid directly by, or wholly or mainly from funds provided by, a Contracting State or a political subdivision or a local authority thereof in the same way that they respectively apply to salaries, wages and other similar remuneration and to any pension, paid to an individual in respect
services rendered to that State or subdivision or authority, in the discharge
functions
a governmental nature.
Articles 15, 16 and 17 shall apply to salaries, wages and other similar remuneration, and to pensions, in respect
services rendered in connection with a business carried on by a Contracting State or a political subdivision or a local authority thereof." ARTICLE VI Article 20
the Convention shall be deleted and replaced by the following: "ARTICLE 20 INCOME NOT EXPRESSLY MENTIONED
income
a resident
a Contracting State, wherever arising, being income
a class or from sources not expressly mentioned in the foregoing Articles
this Convention, other than income paid out
trusts or the estates
deceased persons in the course
administration, shall be taxable only in that State.
paragraph
this Article shall not apply to income, other than income from immovable property as defined in paragraph
, if the recipient
such income, being a resident
a Contracting State, carries on business in the other Contracting State through a permanent establishment situated therein and the right or property in respect
which the income is paid is effectively connected with such permanent establishment. In such case the provisions
this Article shall not apply if it was the main purpose or one
the main purposes
any person concerned with the creation or assignment
the rights in respect
which the income is paid to take advantage
this Article by means
that creation or assignment." ARTICLE VII
the Contracting States shall notify to the other the completion
the procedures required by its law for the bringing into force
this Protocol.
the receipt
the later
these notifications and shall thereupon have effect: (a) in Ireland: (i) in respect
income tax and capital gains tax, for any year
assessment beginning on or after 6th April in the calendar year next following that in which the Protocol enters into force; (ii) in respect
corporation tax, for any financial year beginning on or after 1st January in the calendar year next following that in which the Protocol enters into force; (b) in the United Kingdom: (i) in respect
income tax and capital gains tax, for any year
assessment beginning on or after 6th April in the calendar year next following that in which the Protocol enters into force; (ii) in respect
corporation tax, for any financial year beginning on or after 1st April in the calendar year next following that in which the Protocol enters into force. IN WITNESS WHEREOF, the undersigned, duly authorised thereto by their respective Governments, have signed this Protocol. DONE in two originals at London, this 4th day
November, 1998. For the Government
Ireland: For the Government
the United Kingdom
Great Britain and Northern Ireland: EDWARD BARRINGTON JOYCE QUINN GIVEN under the
ficial Seal
the Government, this 21st day
December, 1998. BERTIE AHERN, Taoiseach. Either state is prohibited from taxing dividends paid by, or the undistributed profits
, a company which is a resident
the other state solely on account
the company having derived profits or income from that first-mentioned state. Article III replaces the anti-abuse provision in Article 12
the existing Convention which deals with the taxation
interest. The provisions
the Article will not apply where the main purpose
the transaction is to take advantage
the Article. Article IV replaces Article 14
the existing Convention which deals with the taxation
capital gains. There are two principal changes in the new text. Gains from the alienation
an interest in a partnership or trust, the assets
which consist principally
immovable property, may be taxed in the state where the property is situated. There is also a new provision which allows either Contracting State to tax the gains
individuals for three years after they take up residence in the other Contracting State. Article V replaces Article 18
the existing Convention which deals with the taxation
the salaries and pensions
workers in Government service. The new text is based on current OECD Model Tax Convention provisions. In addition, the Article also expressly includes the remuneration and pensions
individuals employed in educational institutions within its ambit if the remuneration or pensions were paid directly by, or wholly or mainly from funds provided by, a Contracting State or local authority. Article VI replaces Article 20
the existing Convention which deals with miscellaneous items
income not covered by other Articles in the Convention. There are two principal changes in the new text. In line with the provisions in the current OECD Model Tax Convention, each state may tax such miscellaneous items
income if they are connected with a business activity carried on in it through a permanent establishment. Furthermore, the new text introduces an anti-abuse provision into the Article, similar to that introduced into the interest Article
the Convention by Article III
the Protocol. Article VII deals with the entry into force
the Protocol. It will enter into force when each country has completed its constitutional requirements for ratification and has notified the other state accordingly. It will thereupon have effect for tax periods in the following year. EXPLANATORY NOTE This Order gives the force
law to the Protocol with the United Kingdom
Great Britain and Northern Ireland which is set out in the Schedule. The Protocol amends the Convention between Ireland and the United Kingdom for the avoidance
double taxation with respect to taxes on income and capital gains which was signed at Dublin on 2 June, 1976 (as previously amended by Protocols dated 28 October, 1976 and 7 November, 1994). Article 1
the Protocol amends Article 5
the existing Convention by providing a minimum period
6 months for a building site to exist before it will be deemed a permanent establishment for the purposes
the Convention. It also amends the provision dealing with
fshore exploration and exploitation activities by replacing the term "trade" with the term "business", which has a broader meaning in a taxation context. It also requires that the activities be carried on
fshore in the other state before a permanent establishment will be deemed to exist in that state. Article II replaces Article 11
the existing Convention which deals with the taxation
dividends. Where a dividend is paid by a company resident in one Contracting State and the beneficial owner
the dividend is a company resident in the other Contracting State that controls 10% or more
the voting power
the company paying the dividends, the amount
tax which can be levied in the first Contracting State is limited to 5%
the gross amount
the dividends. In all other cases the amount
tax which can be levied by the first-mentioned state is limited to 15%
the gross amount
the dividends. An exemption from the withholding taxes is provided where the dividends are paid to charities or pension funds in the other state. At the date
signature
the Protocol, neither Ireland nor the UK apply withholding taxes on dividends. The term "dividends" is defined by reference to the domestic laws
each country. Where dividends are paid in respect
shares which are effectively connected with a business carried on through a permanent establishment in a state by the owner
the dividends, that state is allowed to tax the dividends without limitation. Privacy Statement Accessibility European Legislation Identifier (PDF) Open Data License Ráiteas Príobháideachais Inrochtaineacht Aitheantóir Eorpach Reachtaíochta (ELI) Ceadúnas Sonraí Oscailte Liosta Fianán © Government
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