Double Taxation Relief (Taxes on Income and Capital Gains) (Republic of Chile) Order 2005

• Date: 13 December 2005
• Statutory Instrument No.: 815/2005

STATUTORY INSTRUMENTS

S.I. No. 815 of 2005

Double Taxation Relief (Taxes on Income and Capital Gains) (Republic of Chile) Order 2005

WHEREAS it is enacted by sections 826(1) and 828 of the Taxes Consolidation Act 1997 (No. 39 of 1997) 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 in respect of income and chargeable gains 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, then subject to section 826 of that Act, the arrangements shall notwithstanding anything in any enactment, have the force of law:

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 sections 826(1) and 828 of the Taxes Consolidation Act 1997 (No. 39 of 1997) hereby order as follows: 1. This Order may be cited as the Double Taxation Relief (Taxes on Income and Capital Gains) (Republic of Chile) Order 2005. 2. It is declared -

(a) that the arrangements specified in the Convention the text of which is set out in the Schedule to this Order have been made with the Government of the Republic of Chile 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 Republic of Chile, and

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

SCHEDULE CONVENTION BETWEEN IRELAND AND THE REPUBLIC OF CHILE 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 Republic of Chile, 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:

CHAPTER I SCOPE OF THE CONVENTION

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 and capital gains imposed on behalf of a Contracting State, irrespective of the manner in which they are levied. 2. There shall be regarded as taxes on income and capital gains 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:

a) in Chile, the taxes imposed under the Income Tax Act, “Ley sobre Impuesto a la Renta” (hereinafter referred to as “Chilean tax”); and

b) in Ireland,

(i) the income tax;

(ii) the corporation tax; and

(iii) 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, at the end of each year, notify each other of any significant changes which have been made in their respective taxation laws.

CHAPTER II DEFINITIONS

Article 3 GENERAL DEFINITIONS 1. For the purposes of this Convention, unless the context otherwise requires:

a) the term “Ireland” means Ireland, including any area outside the territorial waters of Ireland designated under the laws of Ireland and in accordance with international law as an area within which Ireland may exercise sovereign rights with regard to the seabed and subsoil and their natural resources;

b) the term “Chile” means the Republic of Chile, including any area outside the territorial waters of the Republic of Chile designated under the laws of the Republic of Chile and in accordance with international law as an area within which the Republic of Chile may exercise sovereign rights with regard to the seabed and subsoil and their natural resources;

c) the terms “a Contracting State” and “the other Contracting State” mean, as the context requires, the Republic of Chile or Ireland, hereinafter “Chile” or “Ireland”, respectively;

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

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

f) 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;

g) the term “international traffic” means any transport by a ship or aircraft operated by an enterprise of a Contracting State, except when such transport is solely between places in the other Contracting State;

h) the term “competent authority” means:

(i) in the case of the Republic of Chile, the Minister of Finance or his authorised representative, and

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

j) the term “national” in relation to a Contracting State means:

(i) any individual possessing the nationality or citizenship of that Contracting State;

(ii) any legal person or association deriving its status as such from the laws in force in that Contracting State; *

* It will be translated as “(ii) cualquier persona jurídica o asociación constituida conforme a la legislación vigente de un Estado Contratante.” 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, place of incorporation or any other criterion of a similar nature, and also includes that State and any political subdivision 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:

a) 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);

b) 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;

c) 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;

d) 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 of which it is a national. If the person is a national of both Contracting States or of neither of them the Contracting States shall endeavour to settle the question by mutual agreement. In the absence of a mutual agreement by the competent authorities of the Contracting States, the person shall not be entitled to any relief or exemption from tax provided by the Convention.

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:

a) a place of management;

b) a branch;

c) an office;

d) a factory;

e) a workshop; and

f) a mine, an oil or gas well, a quarry or any other place relating to the exploration for or the exploitation of natural resources. 3. The term “permanent establishment” shall also include:

a) a building site or construction or installation project and the supervisory activities in connection therewith, but only if such building site, construction or installation project or activities last more than six months;

b) the performance of professional services and of other activities of an independent character in a Contracting State if such activities are carried on within that Contracting State for a period or periods exceeding in the aggregate 183 days within any twelve month period; and

c) the performance of professional services and of other activities of an independent character in a Contracting State by an individual, if...