Double Taxation Relief (Taxes on Income and on Capital) (Swiss Confederation) Order 2019

• Jurisdiction: Ireland
• Citation: IR SI 460/2019
• Year: 2019

Notice of the making of this Statutory Instrument was published in

“Iris Oifigiúil” of 17th September, 2019.

WHEREAS it is enacted by section 826 (1) (as amended by section 157 of the Finance Act 2010 (No. 5 of 2010)) 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, granting relief from taxation under the laws of that territory to persons who are resident in the State for the purposes of tax or collecting and recovering tax (including interest, penalties and costs in connection with such tax) for the purpose of the prevention of tax evasion, 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 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 amended by section 157 of the Finance Act 2010 (No. 5 of 2010)) of the Taxes Consolidation Act 1997 , hereby order as follows:

1. This Order may be cited as the Double Taxation Relief (Taxes on Income and on Capital) (Swiss Confederation) Order 2019.

2. It is declared that -

(a) the arrangements specified in the Protocol, the text of which is set out in the Schedule, have been made with the Swiss Federal Council in relation to -

(i) affording relief from double taxation and the prevention from fiscal evasion with respect to taxes on income, 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 the Swiss Confederation, and

(ii) in the case of taxes of any kind or description imposed by the laws of the State or the laws of the Swiss Federation, exchanging information for the purposes of the prevention and detection of tax evasion, granting relief from taxation under the laws of the Swiss Federation 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

PROTOCOL BETWEEN IRELAND AND THE SWISS CONFEDERATION AMENDING THE CONVENTION FOR THE AVOIDANCE OF DOUBLE TAXATION WITH RESPECT TO TAXES ON INCOME AND ON CAPITAL SIGNED AT DUBLIN ON 8 NOVEMBER 1966, AS AMENDED BY THE PROTOCOLS SIGNED AT DUBLIN ON 24 OCTOBER 1980 AND AT DUBLIN ON 26 JANUARY 2012

The Government of Ireland and the Swiss Federal Council;

Desiring to conclude a Protocol to amend the Convention between Ireland and the Swiss Confederation for the Avoidance of Double Taxation with Respect to Taxes on Income and on Capital signed at Dublin on 8 November 1966, as amended by the protocols signed at Dublin on 24 October 1980 and at Dublin on 26 January 2012 (hereinafter “the Convention”);

Have agreed as follows:

ARTICLE I

The preamble of the Convention shall be deleted and replaced by the following:

“The Swiss Federal Council and the Government of Ireland;

Desiring to conclude a Convention for the avoidance of double taxation with respect to taxes on income and on capital;

Desiring to further develop their economic relationship and to enhance their cooperation in tax matters;

Intending to eliminate double taxation with respect to taxes on income and on capital without creating opportunities for non-taxation or reduced taxation through tax evasion or avoidance (including through treaty-shopping arrangements aimed at obtaining reliefs provided in this Convention for the indirect benefit of residents of third States);

Have agreed as follows:”.

ARTICLE II

The following new paragraph 6A shall be added to Article 6 (Business profits) of the Convention:

“6A. A Contracting State shall make no adjustment to the profits that are attributable to a permanent establishment of an enterprise of one of the Contracting States after 5 years from the end of the taxable year in which the profits would have been attributable to the permanent establishment. The provisions of this paragraph shall not apply in the case of fraud, gross negligence or wilful default.”.

ARTICLE III

The following new paragraph 3 shall be added to Article 8 (Associated enterprises) of the Convention:

“3. A Contracting State shall not include in the profits of an enterprise, and tax accordingly, profits that would have accrued to the enterprise but by reason of the conditions referred to in paragraph 1 have not so accrued, after 5 years from the end of the taxable year in which the profits would have accrued to the enterprise. The provisions of this paragraph shall not apply in the case of fraud, gross negligence or wilful default.”.

ARTICLE IV

The following new paragraph 7 shall be added to Article 22 (Elimination of double taxation) of the Convention:

“7. The provisions of paragraph 2 shall not apply to income derived by a resident of Switzerland where Ireland applies the provisions of this Convention to exempt such income from tax or applies the provisions of paragraph 2 of Article 9 to such income.”.

ARTICLE V

Paragraph 1 of Article 25 (Mutual agreement procedure) of the Convention shall be deleted and replaced by the following:

“1. Where a person considers that the actions of one or both of the Contracting States result or will result for him in taxation not in accordance with the provisions of this Convention, he may, irrespective of the remedies provided by the domestic law of those States, present his case to the competent authority of either Contracting State. The case must be presented within three years from the first notification of the action resulting in taxation not in accordance with the provisions of the Convention.”.

ARTICLE VI

The following new Article 25A (Arbitration) shall be added to Chapter VI (Special provisions) of the Convention:

“ARTICLE 25A

Arbitration

1. Where:

a) under paragraph 1 of Article 25 a person has presented a case to the competent authority of a Contracting State on the basis that the actions of one or both of the Contracting States have resulted for that person in taxation not in accordance with the provisions of this Convention; and

b) the competent authorities are unable to reach an agreement to resolve that case pursuant to paragraph 2 of Article 25 within a period of three years beginning on the start date referred to in paragraphs 8 or 9, as the case may be (unless, prior to the expiration of that period the competent authorities of the Contracting States have agreed to a different time period with respect to that case and have notified the person who presented the case of such agreement),

any unresolved issues arising from the case shall, if the person so requests in writing, be submitted to arbitration in the manner described in this Article, according to any rules or procedures agreed upon by the competent authorities of the Contracting States pursuant to the provisions of paragraph 10.

2. Where a competent authority has suspended the mutual agreement procedure referred to in paragraph 1 because a case with respect to one or more of the same issues is pending before court or administrative tribunal, the period provided in subparagraph b of paragraph 1 will stop running...