Corporate Tax 2010 - BMR Advisors

Chapter 26
Ireland
Michael Ryan
McCann FitzGerald
Eleanor MacDonagh
1 General: Treaties
1.4 Do they generally incorporate anti-treaty shopping rules (or
“limitation of benefits” articles)
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1.1 How many income tax treaties are currently in force in
Ireland
Ireland currently has double taxation treaties in effect with 46
countries, while another 6 have been agreed but are yet to come into
effect. Ireland has entered into a double tax treaty with each of
Australia, Austria, Belgium, Bulgaria, Canada, China, Chile,
Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland,
France, Germany, Greece, Hungary, Iceland, India, Israel, Italy,
Japan, Korea (Rep. of), Latvia, Lithuania, Luxembourg, Macedonia
(effective from January 2010), Malaysia, Malta (effective from
January 2010), Mexico, the Netherlands, New Zealand, Norway,
Pakistan, Poland, Portugal, Romania, Russia, Slovak Republic,
Slovenia, South Africa, Spain, Sweden, Switzerland, United
Kingdom, United States of America, Vietnam and Zambia. A new
agreement with Turkey is anticipated to come into effect in 2010.
New agreements have been signed with Georgia, Moldova and
Serbia. New agreements have been concluded with Albania,
Armenia, Azerbaijan, Bahrain, Belarus, Bosnia Herzegovina,
Kuwait, Montenegro, Morocco, Saudi Arabia, Thailand, United
Arab Emirates and are expected to be signed shortly. A Protocol to
the existing treaty with South Africa has been concluded and is
expected to be signed shortly. Negotiations for new agreements
with the following countries are at various stages: Argentina; Egypt;
Singapore; Tunisia; and Ukraine. Negotiations are at various stages
for the revision of existing agreements with Cyprus, France,
Germany, Italy, Korea and Pakistan.
1.2 Do they generally follow the OECD or another model
Most of Ireland’s double taxation agreements follow the OECD
model treaty.
1.3 Do treaties have to be incorporated into domestic law
before they take effect
Since the enactment of the Finance Act 2006 of Ireland, a double
tax treaty will have the force of law only after an Order has been
approved by the Dáil, and a law has been enacted by the Oireachtas
that inserts a reference to the Order into Schedule 24A of the Taxes
Consolidation Act 1997. Section 33 Finance (No. 2) Act 2008 now
provides that certain preferential tax treatments that are in Irish
domestic law where one is dealing with a resident of a treaty
country, can apply once a tax treaty has been signed by both Ireland
and the treaty partner country.
In general, Ireland’s tax treaties do not contain “limitation of
benefits” articles. However, the Ireland/USA Double Taxation
Agreement does include a “limitation of benefits” article.
1.5 Are treaties overridden by any rules of domestic law
(whether existing when the treaty takes effect or
introduced subsequently)
In general, once a double taxation agreement has obtained force of
law in Ireland, it can not be overridden by rules of Irish domestic
law. The legislation giving effect to such double taxation
agreements in Ireland expressly states “the arrangements shall,
notwithstanding any enactment have force of law as if each such
Order were an Act of the Oireachtas”.
2 Transaction Taxes
2.1 Are there any documentary taxes in Ireland
Stamp duty is chargeable in Ireland on certain instruments including
those transferring ownership of property (including stocks and
marketable securities) or in certain cases, agreements to transfer
certain types of property. In order for an instrument to come within
the charge to stamp duty, the instrument must either be executed in
Ireland, or if not executed in Ireland, it must relate to property situated
in Ireland or to any matter or thing to be done in Ireland.
The rate of duty applicable to transfers of stocks and marketable
securities is 1%. For property other than shares and marketable
securities, the level of duty ranges from 0% to 6% depending on the
value of the transaction. There are special rates applying to
residential property. Stamp duty is usually payable within 30 days
of the execution of the instrument. The buyer or transferee is
usually accountable for the payment of the duty.
There are a number of exemptions from the charge to stamp duty,
including the transfer of certain foreign securities, intellectual
property rights and certain loans. From December 2009 the
Revenue will introduce a new electronic system for the stamping of
instruments and the payment of stamp duty.
2.2 Do you have Value Added Tax (or a similar tax) If so, at
what rate or rates
VAT is charged in Ireland in respect of supplies of goods and
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