Double Taxation Relief (Taxes on Income) (Montenegro) Order 2011.

• Published date: 21 January 2011
• Statutory Instrument No.: 18/2011

Notice of the making of this Statutory Instrument was published in

“Iris Oifigiúil” of 21st January, 2011.

WHEREAS it is enacted by section 826 (1) (as substituted by section 35 of the Finance Act 2007 (No. 11 of 2007)) of the Taxes Consolidation Act 1997 (No. 39 of 1997) that where 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 in respect of income and chargeable gains, capital gains tax or any taxes of a similar character imposed by the laws of the State or by the laws of that territory and, in the case of taxes of any kind or description imposed by the laws of the State or the laws of that territory, in relation to exchanging information for the purposes of the prevention and detection of tax evasion or granting relief from taxation under the laws of that territory to persons who are resident in the State for the purposes of tax, and that it is expedient that those arrangements should have the force of law, and that the order so made is referred to in Part 1 of Schedule 24A of the Taxes Consolidation Act 1997 , then, subject to section 826 of that Act, the arrangements shall, notwithstanding anything in any enactment, have the force of law as if such order were an Act of the Oireachtas on and from the date of the insertion of a reference to the order into Part 1 of Schedule 24A:

AND WHEREAS it is further enacted by section 826 (6) of the Taxes Consolidation Act 1997 that where such an order is proposed to be made, a draft of the order 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 826 (1) (as substituted by section 35 of the Finance Act 2007 ) of the Taxes Consolidation Act 1997 , hereby order as follows:

1. This Order may be cited as the Double Taxation Relief (Taxes on Income) (Montenegro) Order 2011.

2. It is declared that—

(a) the arrangements specified in the Convention, the text of which is set out in the Schedule, have been made with the Government of Montenegro in relation to—

(i) affording relief from double taxation in respect of income tax, corporation tax in respect of income and chargeable gains, capital gains tax and any taxes of a similar character, imposed by the laws of the State or by the laws of Montenegro, and

(ii) in the case of taxes of any kind or description imposed by the laws of the State or the laws of Montenegro, exchanging information for the purposes of the prevention and detection of tax evasion and granting relief from taxation under the laws of Montenegro to persons who are resident in the State for the purposes of tax,

and

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

SCHEDULE

CONVENTION BETWEEN

IRELAND

AND

MONTENEGRO

FOR THE AVOIDANCE OF DOUBLE TAXATION AND THE PREVENTION OF FISCAL EVASION WITH RESPECT TO TAXES ON INCOME

THE GOVERNMENT OF IRELAND

AND

THE GOVERNMENT OF MONTENEGRO

desiring to conclude a Convention for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income, have agreed as follows:

Article 1

Persons Covered

This Convention shall apply to persons who are residents of one or both of the Contracting States.

Article 2

Taxes Covered

1. This Convention shall apply to taxes on income imposed on behalf of a Contracting State or local authorities, irrespective of the manner in which they are levied.

2. There shall be regarded as taxes on income all taxes imposed on total income, or on elements of income, including taxes on gains from the alienation of movable or immovable property.

3. The existing taxes to which the Convention shall apply are in particular:

1) in Montenegro:

(1) the corporate profit tax; and

(2) the personal income tax;

(hereinafter referred to as “Montenegrin tax”);

2) in Ireland:

(1) the income tax;

(2) the income levy;

(3) the corporation tax; and

(4) the capital gains tax;

(hereinafter referred to as “Irish tax”).

4. The 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 taxation laws.

Article 3

General Definitions

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

1) the terms “a Contracting State” and “the other Contracting State” mean Montenegro or Ireland, as the context requires;

2) the term “Montenegro” means the State of Montenegro and, when used in a geographical sense, it means the land territory of Montenegro, its internal sea waters and the belt of the territorial sea, the air space thereover, as well as the seabed and subsoil of the part of the high sea outside the outer limit of the territorial sea over which Montenegro exercises its sovereign rights for the purpose of exploration and exploitation of their natural resources in accordance with its internal legislation and international law;

3) the term “Ireland” includes any area outside the territorial waters of Ireland which has been or may hereafter be designated under the laws of Ireland concerning the Exclusive Economic Zone and the Continental Shelf, as an area within which Ireland may exercise such sovereign rights and jurisdiction as are in conformity with international law;

4) the term “national” means:

(1) any individual possessing the nationality or citizenship of a Contracting State;

(2) any legal person, partnership or association deriving its status as such from the laws in force in a Contracting State;

5) the term “person” includes an individual, a company and any other body of persons;

6) the term “company” means any body corporate or any entity that is treated as a body corporate for tax purposes;

7) 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;

8) the term “international traffic” means any transport by a ship or aircraft operated by an enterprise which has its place of effective management in a Contracting State, except when the ship or aircraft is operated solely between places in the other Contracting State;

9) the term “competent authority” means:

(1) in Montenegro, the Ministry of Finance or its authorised representative;

(2) in Ireland, the Revenue Commissioners or their authorised representative.

2. As regards the application of the Convention at any time by a Contracting State, any term not defined therein shall, unless the context otherwise requires, have the meaning that it has at that time under the law of that State for the purposes of the taxes to which the Convention applies, any meaning under the applicable tax laws of that State prevailing over a meaning given to the term under other laws of that State.

Article 4

Resident

1. For the purposes of this Convention, the term “resident of a Contracting State” means any person who, under the laws of that State, is liable to tax therein by reason of his domicile, residence, place of management or any other criterion of a similar nature, and also includes that State or local authority thereof. This term, however, does not include any person who is liable to tax in that State in respect only of income from sources in that State.

2. Where by reason of the provisions of paragraph 1 an individual is a resident of both Contracting States, then his status shall be determined as follows:

1) he shall be deemed to be a resident only of the State in which he has a permanent home available to him; if he has a permanent home available to him in both States, he shall be deemed to be a resident only of the State with which his personal and economic relations are closer (centre of vital interests);

2) if the State in which he has his centre of vital interests cannot be determined, or if he has not a permanent home available to him in either State, he shall be deemed to be a resident only of the State in which he has an habitual abode;

3) if he has an habitual abode in both States or in neither of them, he shall be deemed to be a resident only of the State of which he is a national;

4) if he is a national of both States or of neither of them, the competent authorities of the Contracting States shall settle the question by mutual agreement.

3. Where by reason of the provisions of paragraph 1 a person other than an individual is a resident of both Contracting States, then it shall be deemed to be a resident only of the State in which its place of effective management is situated.

Article 5

Permanent Establishment

1. For the purposes of this Convention, the term “permanent establishment” means a fixed place of business through which the business of an enterprise is wholly or partly carried on.

2. The term “permanent establishment” includes especially:

1) a place of management;

2) a branch;

3) an office;

4) a factory;

5) a workshop; and

6) a mine, an oil or gas well, a quarry or any other place of extraction of natural resources.

3. A building site or construction or installation project constitutes a permanent establishment only if it lasts more than twelve months.

4. The carrying on of activities on the Continental Shelf of a Contracting State in connection with the exploration or exploitation of the...