Double Taxation Relief (Taxes on Income) (Cyprus) Order, 1970.

• Statutory Instrument No.: 79/1970
• Date: 03 March 1970

S.I. No. 79 of 1970.

DOUBLE TAXATION RELIEF (TAXES ON INCOME) (CYPRUS) ORDER, 1970.

WHEREAS it is enacted by section 361 (1) of the Income Tax Act, 1967 (No. 6 of 1967), 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, sur-tax or corporation profits 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, have the force of law:

AND WHEREAS it is further enacted by section 361 (6) of that 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 this 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 of the Income Tax Act, 1967 (No. 6 of 1967), hereby order as follows: 1. This Order may be cited as the Double Taxation Relief (Taxes on Income) (Cyprus) Order, 1970. 2. It is hereby declared—

(a) that the arrangements specified in the Convention set out in the Schedule to this Order have been made with the Government of Cyprus in relation to affording relief from double taxation in respect of income tax, sur-tax or corporation profits tax and any taxes of a similar character, imposed by the laws of the State or by the laws of Cyprus, and

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

SCHEDULE.

CONVENTION.

between Ireland and Cyprus 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 Cyprus, 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.

PERSONAL SCOPE.

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

ARTICLE 2.

TAXES COVERED.

1. The taxes which are the subject of this Convention are:

(a) in Ireland:

the income tax (including sur-tax) and the corporation profits tax (hereinafter referred to as "Irish tax");

(b) in Cyprus:

the income tax (hereinafter referred to as "Cyprus tax").

2. The Convention shall also apply to any identical or substantially similar taxes which are subsequently imposed in addition to, or in place of, the existing taxes. At the end of each year, the competent authorities of the Contracting States shall notify to each other any important changes which have been made in their respective taxation laws.

ARTICLE 3.

GENERAL DEFINITIONS.

1. In this Convention, unless the context otherwise requires:

(a) the terms "a Contracting State" and "the other Contracting State" mean Ireland or Cyprus, as the context requires;

(b) the term "person" comprises an individual, a company and any other body of persons;

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

(d) the term "tax" means Irish tax or Cyprus tax, as the context requires;

(e) the term "resident of Ireland" means:

(i) any company whose business is managed and controlled in Ireland. Provided that nothing in this paragraph shall affect any provisions of the law of Ireland regarding the imposition of corporation profits tax in the case of a company incorporated in Ireland;

(ii) any other person who is resident in Ireland for the purposes of Irish tax and not resident in Cyprus for the purposes of Cyprus tax.

(f) the term "resident of Cyprus" means:

(i) any company whose business is managed and controlled in Cyprus:

(ii) any other person who is resident in Cyprus for the purposes of Cyprus tax and not resident in Ireland for the purposes of Irish tax.

(g) the terms "resident of a Contracting State" and "resident of the other Contracting State" mean a person who is a resident of Ireland or a person who is a resident of Cyprus, as the context requires;

(h) 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;

(i) the term "competent authority" means:

(i) in the case of Ireland, the Revenue Commissioners or their authorised representative;

(ii) in the case of Cyprus, the Commissioner of Income Tax or his authorised representative.

2. Where any Article of this Convention provides (with or without conditions) that income derived by a resident of a Contracting State from sources within the other Contracting State shall be taxable only in the first-mentioned State or entitled to a reduced rate of tax in the other State and, under the law in force in that first-mentioned State, the said income is subject to tax by reference to the amount thereof which is remitted to or received in that State and not by reference to the full amount thereof, then the exemption or reduction in rate in the other State resulting from such Article shall apply only to so much of the income as is remitted to or received in the first-mentioned State.

3. As regards the application of the Convention by a Contracting State any term not otherwise defined shall, unless the context otherwise requires, have the meaning which it has under the laws of that Contracting State relating to the taxes which are the subject of the Convention.

ARTICLE 4.

PERMANENT ESTABLISHMENT.

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

2. The term "permanent establishment" shall include especially:

(a) a place of management;

(b) a branch;

(c) an office;

(d) a factory;

(e) a workshop;

(f) a mine, quarry or other place of extraction of natural resources;

(g) a building site or construction or assembly project.

3. The term "permanent establishment" shall not be deemed to include:

(a) the use of facilities solely for the purpose of storage, display or delivery of goods or merchandise belonging to the enterprise;

(b) the maintenance of a stock of goods or merchandise belonging to the enterprise solely for the purpose of storage, display or delivery;

(c) the maintenance of a stock of goods or merchandise belonging to the enterprise solely for the purpose of processing by another enterprise;

(d) the maintenance of a fixed place of business solely for the purpose of purchasing goods or merchandise, or for collecting information, for the enterprise;

(e) the maintenance of a fixed place of business solely for the purpose of advertising, for the supply of information, for scientific research or for similar activities which have a preparatory or auxillary character, for the enterprise.

4. A person acting in a Contracting State on behalf of an enterprise of the other Contracting State—other than an agent of an independent status to whom paragraph 5 applies—shall be deemed to be a permanent establishment in the first-mentioned State if he has, and habitually exercises in that State, an authority to conclude contracts in the name of the enterprise, unless his activities are limited to the purchase of goods or merchandise for the enterprise.

5. An enterprise of a Contracting State shall not be deemed to have a permanent establishment in the other Contracting State merely because it carries on business in that other State through a broker, general commission agent or any other agent of an independent status, where such person is acting in the ordinary course of his business.

6. The fact that a company which is a resident of a Contracting State controls or is controlled by a company which is a resident of the other Contracting State, or which carries on business in that other State (whether through a permanent establishment or otherwise) shall not of itself constitute either company a permanent establishment of the other.

7. Where an enterprise of one of the Contracting States sells in the other State goods manufactured, assembled, processed, packed or distributed in the other State by an enterprise for, or at, or to the order of, that first-mentioned enterprise and—

(a) either enterprise participates directly or indirectly in the management, control or capital of the other enterprise; or

(b) the same persons participate directly or indirectly in the management, control or capital of both enterprises,

then for the purposes of this Convention that first-mentioned enterprise shall be deemed to have a permanent establishment in the other State and to be engaged in trade or business in the other State through that permanent establishment.

ARTICLE 5.

INCOME FROM IMMOVABLE PROPERTY.

1. Income from immovable property may be taxed in the Contracting State in which such property is situated.

2. The term "immovable property" shall be defined in accordance with the law of the Contracting State in which the property in question is situated. The term shall in any case include property accessory to immovable property, livestock and equipment used in agriculture and forestry, rights to which the provisions of general law respecting landed property apply, usufruct of immovable property and rights to variable or fixed payments as consideration for the working of, or the right to work, mineral deposits, sources and other natural resources; ships, boats and aircraft shall not be regarded as immovable property.

3. The...