Double Taxation Relief (Taxes on Income and Capital Gains) (United States of America) Order, 1997

• Date: 02 December 1997
• Statutory Instrument No.: 477/1997

S.I. No. 477 of 1997.

DOUBLE TAXATION RELIEF (TAXES ON INCOME AND CAPITAL GAINS) (UNITED STATES OF AMERICA) ORDER, 1997

WHEREAS it is enacted by section 361 (1) of the Income Tax Act, 1967 (No. 6 of 1967), as amended by section 86 of the Finance Act, 1974 (No. 27 of 1974), section 38 (1) of the Capital Gains Tax Act, 1975 (No. 20 of 1975), section 166 of the Corporation Tax Act, 1976 (No. 7 of 1976), and section 47 (4) of the Finance Act, 1983 (No. 15 of 1983), that if the Government by order declare that arrangements specified in the order have been made with the government of any territory outside the State in relation to affording relief from double taxation in respect of income tax, corporation tax or capital gains tax and any taxes of a similar character, imposed by the laws of the State or by the laws of that territory, and that it is expedient that those arrangements should have the force of law, the arrangements shall, notwithstanding anything in any enactment other than section 47 of the Finance Act, 1983 , as amended, have the force of law:

AND WHEREAS it is further enacted by section 361 (6) of the first-mentioned Act that where such an order is proposed to be made, a draft thereof shall be laid before Dáil Éireann and the order shall not be made until a resolution approving of the draft has been passed by Dáil Éireann:

AND WHEREAS a draft of the following Order has been laid before Dáil Éireann and a resolution approving of the draft has been passed by Dáil Éireann:

NOW, the Government, in exercise of the powers conferred on them by section 361 (1) of the Income Tax Act, 1967 (No. 6 of 1967), as amended by section 86 of the Finance Act, 1974 (No. 27 of 1974), section 38 (1) of the Capital Gains Tax Act, (No. 20 of 1975), section 166 of the Corporation Tax Act, (No. 7 of 1976) and section 47 (4) of the Finance Act, 1983 (No. 15 of 1983), hereby order as follows: 1. This Order may be cited as the Double Taxation Relief (Taxes on Income and Capital Gains) (United States of America) Order, 1997. 2. It is hereby declared—

( a ) that the arrangements specified in the Convention, the Protocol thereto and the notes exchanged on behalf of the Government and the Government of the United States of America the texts of which are set out in the Schedule to this Order have been made with the Government of the United States of America in relation to affording relief from double taxation in respect of income tax, corporation tax or capital gains tax and any taxes of a similar character, imposed by the laws of the State or by the laws of the United States of America, and

( b ) that it is expedient that those arrangements should have the force of law.

SCHEDULE

CONVENTION BETWEEN THE GOVERNMENT OF IRELAND AND THE GOVERNMENT OF THE UNITED STATES OF AMERICA FOR THE AVOIDANCE OF DOUBLE TAXATION AND THE PREVENTION OF FISCAL EVASION WITH RESPECT TO TAXES ON INCOME AND CAPITAL GAINS

The Government of Ireland and the Government of the United States of America, desiring to conclude a convention for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income and capital gains, have agreed as follows:

ARTICLE 1

General Scope

1. This Convention shall apply only to persons who are residents of one or both of the Contracting States, except as otherwise provided in the Convention.

2. This Convention shall not restrict in any manner any benefit now or hereafter accorded:

( a ) by the laws of either Contracting State; or

( b ) by any other agreement between the Contracting States.

3. (a) Notwithstanding the provisions of subparagraph 2 (b):

(i) the provisions of Article 26 (Mutual Agreement Procedure) of this Convention exclusively shall apply to any dispute concerning whether a measure is within the scope of this Convention, and the procedures under this Convention exclusively shall apply to that dispute, notwithstanding any other agreement to which both Contracting States may be parties; and

(ii) unless the competent authorities determine that a taxation measure is not within the scope of this Convention, the non-discrimination obligations of this Convention exclusively shall apply with respect to that measure, except for such national treatment or most favoured-nation obligations as may apply to trade in goods under the General Agreement on Tariffs and Trade. No national treatment or most-favoured-nation obligation under any other agreement shall apply with respect to that measure.

( b ) For the purpose of this paragraph, a "measure" is a law, regulation, rule, procedure, decision, administrative action, or any similar provision or action.

4. Notwithstanding any provision of the Convention, a Contracting State may tax its residents (as determined under Article 4 (Residence)), and by reason of citizenship may tax its citizens, as if the Convention had not come into effect. For this purpose, the term "citizen" shall include a former citizen whose loss of citizenship had as one of its principal purposes the avoidance of tax, but only for a period of 10 years following such loss.

5. The provisions of paragraph 4 shall not affect:

( a ) the benefits conferred by a Contracting State under paragraph 2 of Article 9 (Associated Enterprises), paragraph 2 of Article 16 (Directors' Fees), paragraphs 1(b) and 4 of Article 18 (Pensions, Social Security, Annuities, Alimony and Child Support), and Articles 24 (Relief From Double Taxation), 25 (Non-Discrimination), and 26 (Mutual Agreement Procedure); and

( b ) the benefits conferred by a Contracting State under paragraph 5 of Article 18 (Pensions, Social Security, Annuities, Alimony and Child Support), Articles 19 (Government Service), 20 (Students and Trainees) and 28 (Diplomatic Agents and Consular Officers), upon individuals who are neither citizens of, nor have been admitted for permanent residence in, that State.

ARTICLE 2

Taxes Covered

1. The existing taxes to which this Convention shall apply are:

( a ) in the United States: the Federal income taxes imposed by the Internal Revenue Code of 1986 (but excluding the accumulated earnings tax, the personal holding company tax and social security taxes), and the Federal excise taxes imposed on insurance premiums paid to foreign insurers and with respect to private foundations (hereinafter referred to as "United States tax"). The Convention shall, however, apply to the Federal excise taxes imposed on insurance premiums paid to foreign insurers only to the extent that the risks covered by such premiums are not reinsured with a person not entitled to the benefits of this or any other convention which provides exemption from these taxes; and

( b ) in Ireland: the income tax, the corporation tax and the capital gains tax (hereinafter referred to as "Irish tax").

2. This Convention shall apply also to any identical or substantially similar taxes that are imposed after the date of signature of the Convention in addition to, or in place of, the existing taxes. The competent authorities of the Contracting States shall notify each other of any significant changes that have been made in their respective taxation laws and of any official published material concerning the application of the Convention, including explanations, regulations, rulings, or judicial decisions.

ARTICLE 3

General Definitions

1. For the purposes of this Convention, unless the context otherwise requires:

( a ) the term "person" includes an individual, an estate, a trust, a partnership, a company, and any other body of persons;

( b ) the term "company" means any body corporate or any entity which is treated as a body corporate for tax purposes;

( c ) the terms "enterprise of a Contracting State" and "enterprise of the other Contracting State" mean respectively an enterprise carried on by a resident of a Contracting State and an enterprise carried on by a resident of the other Contracting State;

( d ) the term "international traffic" means any transport by a ship or aircraft, except when such transport is solely between places in a Contracting State;

( e ) the term "competent authority" means:

(i) in the United States: the Secretary of the Treasury or his delegate; and

(ii) in Ireland: the Revenue Commissioners or their authorised representative;

( f ) the term "United States" means the United States of America, and includes the states thereof and the District of Columbia; such term also includes any area outside the territorial waters of the United States which, in accordance with international law, has been or may hereafter be designated under the laws of the United States concerning the Continental Shelf as an area within which the rights of the United States with respect to the sea bed and subsoil and their natural resources may be exercised; the term, however, does not include Puerto Rico, the Virgin Islands, Guam or any other United States possession or territory;

( g ) the term "Ireland" includes any area outside the territorial waters of Ireland which, in accordance with international law, has been or may hereafter be designated under the laws of Ireland concerning the Continental Shelf as an area within which the rights of Ireland with respect to the sea bed and subsoil and their natural resources may be exercised;

( h ) the terms "the Contracting State", "one of the Contracting States" and "the other Contracting State" mean Ireland or the United States, as the context requires; and the term "Contracting States" means Ireland and the United States;

( i ) the term "national" in relation to a Contracting State, means any citizen of that State and any legal person, association, or other entity deriving its status as such from the laws in force in that State;

( j ) the term "qualified governmental entity" means:

(i) any person that constitutes the Government or a Department of Government of a Contracting State, or a political...