European Communities (Taxation of Savings Income in the Form of Interest Payments) Regulations, 2003

Publication Date:January 01, 2003
 
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S.I. No.717of2003

European law

European Communities (Taxation of savings income in the form of interest payments) Regulations 2003

These regulations implement Council Directive 2003/48/EC of 3 June 2003 on the taxation of savings income in the form of interest payments.

The regulations directly amend the Taxes Consolidation Act 1997 by inserting a new Chapter - Chapter 3A - into Part 38 (Returns of income and gains, other obligations and returns, and revenue powers) of that Act.

The new Chapter 3A requires paying agents established in Ireland to report to the Revenue Commissioners information about savings income paid to, or secured for, a beneficial owner resident in a Member State of the EU other than the State. The Revenue Commissioners are authorised to pass this information on to the competent authorities of the Member State in which a beneficial owner is resident. Similar reporting requirements are made in respect of certain entities know as residual entities. Provision is also made for credit for, or refund of, tax deducted where savings income beneficially owned by an Irish resident and arising in Austria, Belgium or Luxembourg is subject to the withholding tax which these countries are authorised to impose under the directive in place of exchange of information.

EUROPEAN COMMUNITIES (TAXATION OF SAVINGS INCOME IN THE FORM OF INTEREST PAYMENTS) REGULATIONS 2003

19/12/2003

I, Charlie McCreevy, Minister for Finance, in exercise of the powers conferred on me by section 3 of the European Communities Act 1972 (No. 27 of 1972) and for the purpose of giving effect to Council Directive 2003/48/EC of 3 June 2003 (1)hereby make the following regulations:

Citation:

1. These Regulations may be cited as the European Communities (Taxation of Savings Income in the Form of Interest Payments) Regulations 2003.

Amendment of Part 38 of Taxes Consolidation Act 1997.

2. The Taxes Consolidation Act 1997 (No. 39 of 1997) is amended by inserting the following Chapter into Part 38 (Returns of Income and Gains, Other Obligations and Returns, and Revenue Powers):

“CHAPTER 3A

Implementation of Council Directive 2003/48/EC of 3 June 2003 on Taxation of Savings Income in the Form of Interest Payments(1)

Interpretation

(Chapter 3A).

898B. -

(1) In this Chapter and in any regulations made under this Chapter, except where the context otherwise requires-

‘beneficial owner’ has the meaning assigned to it by section 898C(1);

‘building society’ and ‘credit union’ have the same meanings, respectively, as in section 256;

‘certificate of residence for tax purposes’, in relation to a third country, means a certificate given by the competent authority of that country certifying that an individual is by virtue of the law of that country resident for the purposes of tax in that country, and references to a tax residence certificate are to be construed accordingly;

competent authority’ means

(a) in relation to a Member State, the authority notified to the European Commission by the Member State for the purposes of the Directive, and

(b) in relation to a third country, the competent authority for the purposes of bilateral or multilateral tax conventions or, in the absence of any such authority, the authority competent in that country to issue certificates of residence for tax purposes;

‘deemed interest payment’ has the meaning assigned to it by section 898E(7)(a):

‘deemed UCITS’ has the meaning assigned to it by section 898D(3)(a);

‘the Directive’ means Council Directive 2003/48/EC of 3 June 2003 (1);

‘electronic means’ includes electrical, digital, magnetic, optical, electromagnetic, biometric and photonic means of transmission of data and other forms of related technology by means of which data is transmitted;

‘interest payment’ has the meaning assigned to it by section 898E;

‘Member State’ means a Member State of the European Communities;

‘money’ includes money expressed in a currency other than euro;

‘money debt’ means a debt arising from a transaction for the lending of money and which may be settled by.-

(a) the payment of money, or

(b) the transfer of a right to settlement under a debt which may be settled by the payment of money,

whether or not the debt creates or evidences a charge on assets and whether or not the debt carries a right to participate in the profits of the debtor;

‘official identity card’ has the meaning assigned to it by section 898G(1);

‘paying agent’ has the meaning assigned to it by section 898D(l);

‘PPS number’, in relation to an individual resident in the State, means that individual's Personal Public Service Number within the meaning of section 223 of the Social Welfare (Consolidation) Act 1993;

‘residual entity’ has the meaning assigned to it by section 898D(l);

‘securities’ includes-

(a) assets which are not chargeable assets for the purposes of capital gains tax by virtue of section 607,

(b) stocks, bonds and obligations of any government, municipal corporation, company or other body corporate, whether or not creating or evidencing a charge on assets, and

(c) any other money debts whether or not evidenced in writing,

but does not include shares (within the meaning of the Companies Act 1963) of a company (within the meaning of that Act) or similar body;

‘strip of a security’ shall be construed in accordance with section 55;

‘UCITS’ has the meaning assigned to it by section 898D(2)(c);

‘UCITS Directive’ means Council Directive 85/611/EEC of 20 December 1985 (1);

‘tax year’ means a year of assessment for income tax or capital gains tax, as appropriate;

‘third country’ means a territory other than a Member State;

‘TIN’, in relation to a Member State other than the State, means a unique identification number allocated by the Member State to an individual for the purposes of taxation and, in relation to the State, means an individual's PPS number.

(2)

(a) Subject to paragraph (b), for the purposes of this Chapter an individual's residence is to be treated as situated in the country in which the individual has his or her permanent address, and any reference in this Chapter to an individual being resident in a country shall be construed accordingly.

(b) Paragraph (a) shall not apply for the purposes of.

(i) the definition of ‘certificate of residence for tax purposes’ in subsection (1) and any use of that definition or of the term tax residence certificate in this Chapter, and

(ii) subsection (3) and any reference in this Chapter to a person being a resident of a territory for tax purposes.

(3) For the purposes of this Chapter, a person is to be regarded as being a resident of a territory for tax purposes if the person is by virtue of the law of that territory resident for the purposes of tax in that territory.

(4) A word or expression that is used in this Chapter and is also used in the Directive has, unless the contrary intention appears, the meaning in this Chapter that it has in the Directive.

Beneficial owner.

898C.-

(1) In this Chapter ‘beneficial owner’, in relation to an interest payment, means an individual who receives the interest payment or an individual for whom the interest payment is secured, but does not include an individual to whom subsection (2) applies.

(2) This subsection applies to an individual (in this section referred to as the ‘intermediary’) who provides evidence to the person making an interest payment to, or securing an interest payment for, the intermediary that, in relation to the interest payment, the intermediary

(a) is a paying agent,

(b) acts on behalf of a person (not being an individual) or an undertaking referred to in section 898D(2),

(c) acts on behalf of a residual entity, where both of the conditions set out in subsection (3) are met, or

(d) acts on behalf of another individual (in this section referred to as the ‘other individual’) who receives the interest payment or for whom the interest payment is secured, where the condition set out in subsection (4) is met in relation to the other individual.

(3) The conditions of this subsection are that-

(a) the intermediary provides the name and address of the residual entity to the person making or securing the interest payment, and

(b) the person making the interest payment makes a return to the Revenue Commissioners within 3 months of the end of the tax year in which the information referred to in paragraph (a) is provided to it of each name and address so provided in that tax year.

(4) The condition of this subsection is that the intermediary provides the person from whom he or she receives an interest payment with the identity of the other individual established in accordance with section 898F or 898G, as appropriate.

(5) If a paying agent has information to the effect, or information indicating, that an individual is not the beneficial owner of an interest payment and paragraph (a), (b) or (c) of subsection (2) does not apply to that individual, the paying agent shall take reasonable steps to identify the beneficial owner in accordance with the provisions of section 898F or 898G, as appropriate.

(6) A paying agent shall treat an individual as the beneficial owner in relation to an interest payment received by, or secured for, the individual if it is otherwise unable to identify a beneficial owner.

Paying agent and

residual entity.

898D.-

(l) In this Chapter

‘paying agent’, in relation to any interest payment, means a person who in the course of the person's business or profession carried on in the State makes the interest payment to, or secures the interest payment for, the immediate benefit of a beneficial owner and includes, in particular, a residual entity but only as respects a deemed interest payment, a Minister of the Government and any agency or body established by statute;

‘residual entity’, in relation to any interest payment, means a person or undertaking resident in a Member State to which the interest payment is made for the benefit of a beneficial owner or for which the interest payment is...

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