No. 18/1950:

FINANCE ACT, 1950

ARRANGEMENT OF SECTIONS

PART I INCOME TAX

1 Income tax and sur-tax for the year 1950-51.

2 Amendment of section 3 of the Finance Act, 1925.

3 Extension of section 8 of the Finance Act, 1932.

4 Exemption of allowances: Griffith Settlement Act, 1923, and Army Pensions Act, 1937.

PART II CUSTOMS AND EXCISE

5 Cesser of preferential rates of customs duties on unmanufactured tobacco.

6 Entertainments duty—entertainment proceeds of which are for educational, philanthropic, or charitable purposes.

7 Entertainments duty—entertainment consisting of amateur wrestling.

8 Appraisers' licences—exemption.

9 Regulations in relation to aerodromes, aircraft, etc.

PART III DEATH DUTIES

10 Confirmation of Convention set forth in First Schedule.

PART IV CORPORATION PROFITS TAX

11 Continuance of certain exemptions from corporation profits tax.

PART V RELIEF OF DOUBLE TAXATION: INCOME TAX, SUR-TAX AND CORPORATION PROFITS TAX

12 Confirmation of Convention set forth in Second Schedule:.

13 Provision as to dividends.

14 Determination of reduced Irish rate.

15 Construction of this Part of this Act.

PART VI STAMP DUTIES

16 Exception from application of sections 24 and 25 of Finance Act, 1949.

17 Stamp duties on certain instruments in cases of reduction of rent.

18 Exemption from stamp duty of certain receipts.

19 Agreement as to stamp duty on industrial assurance policies.

PART VII MISCELLANEOUS AND GENERAL

20 The Foreign Exchange Account.

21 Transition Development Fund.

22 Capital Services Redemption Account.

23 Transfer of money from this Road Fund to the Exchequer.

24 Care and management of taxes and duties.

25 Short title, construction and commencement.

FIRST SCHEDULE

SECOND SCHEDULE

AN ACT TO CHARGE AND IMPOSE CERTAIN DUTIES OF CUSTOMS AND INLAND REVENUE (INCLUDING EXCISE), TO AMEND THE LAW RELATING TO CUSTOMS AND INLAND REVENUE (INCLUDING EXCISE) AND TO MAKE FURTHER PROVISIONS IN CONNECTION WITH FINANCE.

[5th July, 1950.]

BE IT ENACTED BY THE OIREACHTAS AS FOLLOWS:—

PART I INCOME TAX

1.—(1) Income tax shall be charged for the year beginning on the 6th day of April, 1950, at the rate of six shillings and six pence in the pound.

(2) Sur-tax for the year beginning on the 6th day of April, 1950, shall be charged in respect of the income of any individual the total of which from all sources exceeds one thousand five hundred pounds and shall be so charged at the same rates as those at which it is charged for the year beginning on the 6th day of April, 1949.

(3) The several statutory and other provisions which were in force on the 5th day of April, 1950, in relation to income tax and sur-tax shall, subject to the provisions of this Act, have effect in relation to the income tax and sur-tax to be charged as aforesaid for the year beginning on the 6th day of April, 1950.

2.— Section 3 (which relates to exemption of certain military pensions and gratuities) of the Finance Act, 1925 (No. 28 of 1925), is hereby amended by the insertion therein of the following subsection in lieu of subsection (2) now (by virtue of section 3 of the Finance Act, 1946 (No. 15 of 1946)) contained in the said section 3:—

"(2) The wounds and disabilities pensions to which section 16 of the Finance Act, 1919, applies shall include and be deemed always to have included (a) all wound and disability pensions, and all increases in such pensions, granted under the Army Pensions Acts, 1923 to 1949, and (b) all gratuities in respect of wounds or disabilities similarly granted, and the said section 16 shall be construed and have effect accordingly.

3.—Were the amount of an allowance to which section 8 (which relates to the exemption of certain allowances under the Army Pensions Acts, 1923 and 1927) of the Finance Act, 1932 (No. 20 of 1932), applied before the passing of the Army Pensions (Increase) Act, 1949 (No. 28 of 1949), has been increased by virtue of section 4 of the said Army Pensions (Increase) Act, 1949 , the said section 8 of the Finance Act, 1932 , shall apply, and be deemed always to have applied, to the whole of such allowance as so increased in amount.

4.—(1) Income to which this section applies shall be exempt from income tax (including sur-tax) and shall not be reckoned in computing income for the purposes of the Income Tax Acts.

(2) This section applies to—

( a ) any yearly sum payable under section 1 of the Griffith Settlement Act, 1923 (No. 5 of 1923), and

( b ) any allowance payable under section 3 of the Army Pensions Act, 1937 (No. 15 of 1937).

PART II CUSTOMS AND EXCISE

5.— Section 15 of the Finance Act, 1949 (No. 13 of 1949), shall cease to have effect as on and from the 31st day of July 1950, except in relation to—

( a ) unmanufactured tobacco in a bonded warehouse on that date, and

( b ) unmanufactured tobacco as respects which it is shown to the satisfaction of the Revenue Commissioners that such tobacco was purchased before that date for the purpose of being imported into the State.

6.—Subsection (4) of section 10 of the Finance Act, 1943 (No. 16 of 1943), is hereby amended, as respects entertainments held on or after the 1st day of August, 1950, by the substitution of the words "fifty per cent" for the words "thirty per cent."

7.—Entertainments duty within the meaning of and chargeable under section 1 of the Finance (New Duties) Act, 1916, as amended by subsequent enactments shall not be charged or levied on payments for admission to any entertainment in respect of which it is proved to the satisfaction of the Revenue Commissioners that the entertainment is promoted by the Irish Amateur Wrestling Association or by a club affiliated to or under the direct control of that association, and that the entertainment consists solely of an exhibition of the sport of wrestling at, or in connection with which no money is awarded or paid to any of the participants or contestants whether as a prize, remuneration, or otherwise.

8.—(1) On and after the 6th day of July, 1950, a person who is authorised to conduct auctions by virtue of—

( a ) an auctioneer's licence granted under section 8 of the Auctioneers and House Agents Act, 1947 (No. 10 of 1947), and for the time being in force, or

( b ) an auction permit granted under section 9 of that Act and for the time being in force,

may act as an appraiser within the meaning of the Appraisers Licences Act, 1806, without being licensed under that Act.

(2) Section 7 of the Appraisers Licences Act, 1806, shall be repealed as on and from the 6th day of July, 1950.

9.—(1) The Minister for Finance may by regulations make such provision as appears to him to be requisite or expedient for all or any of the following purposes:—

( a ) applying any of the provisions of the Customs Acts, subject to such modifications as he considers appropriate, in relation to aerodromes and to aircraft and persons, goods, mails, stores and baggage carried therein, disembarked or unladen therefrom or embarked or laden thereon;

( b ) adapting or modifying any of the provisions of the statutes which relate to the duties of excise and the management of those duties in relation to aerodromes and to aircraft and persons, goods, mails, stores and baggage carried therein, disembarked or unladen therefrom or embarked or laden thereon;

( c ) preventing smuggling by air;

( d ) carrying out, in so far as they relate to the Customs, the provisions of the Chicago Convention.

In this subsection, the expression "the Chicago Convention" has the same meaning as it has in Part II of the Air Navigation and Transport Act, 1946 (No. 23 of 1946), as amended by section 9 of the Air Navigation and Transport Act, 1950 (No. 4 of 1950).

(2) If any person contravenes, whether by act or omission, any regulation under this section, he shall, in addition to any other penalty to which he may be liable, be guilty of an offence against the Customs Acts and shall be liable on summary conviction thereof to a Customs penalty not exceeding one hundred pounds, and he may either be detained or proceeded against by summons.

(3) Any goods in respect of which an offence under this section may have been committed, together with all aircraft, ships, boats, vehicles, animals and other things used in their conveyance, shall be forfeited.

(4) On the making of the first regulations under this section for the purposes specified in paragraph (d) of subsection (1) of this section, regulations 61 and 63 of the Air Navigation (General) Regulations, 1930 (S. R. & O., No. 26 of 1930), shall cease to have effect.

PART III DEATH DUTIES

10.—(1) The convention set forth in the First Schedule to this Act and concluded on the 13th day of September, 1949, between the Government and the Government of the United States of America (in this section referred to as the Convention) is hereby confirmed and shall have the force of law.

(2) Subsection (4) of section 7 of the Finance Act, 1894 (which provides for relief in respect of duty payable in a foreign country) shall not have effect in relation to estate tax chargeable under the laws of the United States of America to which the provisions of the Convention apply.

PART IV CORPORATION PROFITS TAX

11.—(1) The exemptions from corporation profits tax specified in subsection (1) of section 33 of the Finance Act, 1929 (No. 32 of 1929), as amended by section 30 of the Finance Act, 1931 (No. 31 of 1931), paragraph (b) of subsection (1) of section 47 of the Finance Act, 1932 (No. 20 of 1932), and subsection (2) of this section shall be given in respect of the period beginning on the 1st day of January, 1950, and ending on the 31st day of December, 1952.

(2) Subsection (1) of section 33 of the Finance Act, 1929 , as amended by section 30 of the Finance Act, 1931 , and paragraph (b) of subsection (1) of section 47 of the Finance Act, 1932 , is hereby further amended by the insertion at the end of that subsection of the following word and paragraph:—

"or

( f ) in the case of a company which carries on a railway undertaking, to any profits of that company."

PART V RELIEF OF DOUBLE TAXATION: INCOME TAX, SUR-TAX AND CORPORATION PROFITS TAX

12.—(1) The convention set forth in Part I of the Second Schedule to this Act and concluded on the 13th day of September, 1949, between the Government and the Government of the United States of America (in this section referred to as the Convention) is hereby confirmed and shall have the force of law.

(2) For the purpose of giving effect to the Convention, the provisions set forth in Part II of the Second Schedule to this Act shall have effect.

(3) The necessary apportionments shall be made for the purpose of giving effect to the terms of the Convention as respects corporation profits tax in the case of accounting periods beginning before the 1st day of April in the year in which the Convention first has effect and ending on or after that date, and any such apportionment shall be made in proportion to the number of months or fractions of months in the part of the relevant accounting period before the said 1st day of April and in the remaining part of the said relevant accounting period respectively.

(4) The Revenue Commissioners may from time to time make regulations in relation to the granting of the reliefs specified in the Convention and may, in particular, by those regulations provide—

( a ) for securing that no such reliefs from taxation imposed by the laws of the United States of America as are provided for in the Convention shall enure to the benefit of persons not entitled thereto, and

( b ) for authorising, in cases where tax deductible from any periodical payment has, in order to comply with the terms of the Convention, not been deducted and it is discovered that the Convention does not apply to that payment, the recovery of the tax by assessment on the person entitled to the payment or by deduction from subsequent payments.

13.—(1) This section applies to any dividend payable after the passing of this Act, being a dividend from which deduction of tax is authorised by Rule 20 of the General Rules.

(2) In this section—

the expression "the company" means a body of persons paying a dividend to which this section applies;

the expression "double taxation relief" means any credit for tax (other than British income tax) payable in any territory outside the State, which is allowable against Irish income tax by virtue of any international agreement having the force of law, including any such credit which has been taken into account in relation to any dividends receivable by the company;

the expression "the reduced Irish rate" means the rate of Irish income tax payable directly or by deduction by the company after taking double taxation relief into account.

(3) (i) Notwithstanding anything in the Income Tax Acts, no relief or repayment in respect of the tax deducted or authorised to be deducted from any dividend to which this section applies shall, in a case in which there is double taxation relief, be allowed at a rate exceeding the reduced Irish rate.

(ii) Where the reduced Irish rate falls to be computed in relation to a dividend, the particulars to be given by the company in the statement required by section 13 of the Finance Act, 1925 (No. 28 of 1925), and section 5 of the Finance Act, 1940 (No. 14 of 1940), shall (in addition to the particulars required to be given apart from this section) include particulars of the reduced Irish rate.

(4) Where a dividend has been paid before the passing of this Act, and any double taxation relief would have fallen to be taken into account in relation to that dividend if this section had applied thereto, that relief shall be taken into account as far as possible in determining the reduced Irish rate in relation to the first dividend payable by the company to which this section applies, and any part of that relief which cannot be so taken into account shall as far as possible be taken into account in relation to the next succeeding dividend, and so on.

(5) Where the whole or any part of any annual payment is payable out of a dividend to which this section applies, and the rate of relief or repayment allowable in respect of the tax deducted or authorised to be deducted from the dividend is affected by double taxation relief, the annual payment, or that part thereof, as the case may be, shall be deemed to be paid out of profits or gains not brought into charge to tax and Rule 21 of the General Rules shall apply accordingly, but the tax recoverable under the said Rule from the person making the payment shall be reduced by an amount equal to tax on the payment or part of the payment at the reduced Irish rate applicable to the dividend.

14.—(1) In this section, the expressions "the reduced Irish rate", "double taxation relief" and "the company" have the same meaning as in the last preceding section and the word "dividend" means a dividend to which that section applies.

(2) The reduced Irish rate in relation to any dividend shall be taken to be the rate which is produced by deducting—

( a ) the rate of double taxation relief for the period for which the dividend is paid, from

( b ) the rate of tax authorised to be deducted from the dividend by Rule 20 of the General Rules.

(3) Subject to any adjustment which is required by subsection (4) of the last preceding section or by subsection (4) of this section, the rate of double taxation relief for the period for which the dividend is paid shall be taken to be—

( a ) in the case of a dividend paid for a period which falls wholly within any year of assessment, the rate which is produced by dividing the double taxation relief for that year of assessment by a sum consisting of the total income of the company as computed for income tax purposes for that year reduced by the amount of any income the income tax upon which the company is entitled, otherwise than under Rule 20 of the General Rules, to charge against any other person;

( b ) in the case of a dividend paid for a period which falls partly within one year of assessment and partly within another year of assessment or other years of assessment, the rate which is produced by determining, in relation to each of those years,—

(i) the rate which would have been applicable if the dividend had been paid for a period falling wholly within that year, and

(ii) the portion of that rate which bears the same proportion to that rate as the part of the period for which the dividend is paid which falls within that year bears to the whole period,

and then aggregating the portions so determined.

(4) Where any matter affecting the calculation of the rate of double taxation relief has not been fully determined at the time when the reduced Irish rate falls to be determined in relation to any dividend, the rate of double taxation relief shall be estimated according to the best of the information available at the time, and, if it is subsequently found that the rate so estimated was excessive or deficient, the appropriate adjustment shall be made in determining the reduced Irish rate applicable to the next subsequent dividend on the occasion of which it is practicable to make the adjustment, and shall be made by reducing or, as the case may be, increasing the rate of double taxation relief, as calculated for the purposes of that subsequent dividend in accordance with the foregoing subsection, by a rate which bears the same proportion to the excess or deficiency in the rate applicable to the first-mentioned dividend as the total amount of the first-mentioned dividend bears to the total amount of that subsequent dividend.

(5) Where the double taxation relief for any year of assessment includes any credit which has been taken into account for the purposes of determining the reduced Irish rate applicable to any dividends received by the company, the amount of that credit shall be taken to be the sum of the amounts which are produced by applying to each such dividend the rate which represents the excess of the rate of tax authorised to be deducted from that dividend by Rule 20 of the General Rules over the reduced Irish rate applicable to that dividend.

(6) For the purposes of this section, a dividend which is not expressed to be paid for any specified period shall be deemed to be paid for the last period for which accounts of the company were made up which ended before the dividend became payable.

15.—This Part of this Act and the Second Schedule to this Act shall, so far as they relate to income tax (including sur-tax), be read and construed together with the Income Tax Acts and shall, so far as they relate to corporation profits tax, be read and construed together with Part V of the Finance Act, 1920, as amended or extended by subsequent enactments.

PART VI STAMP DUTIES

16.—(1) Subject to subsection (2) of this section, sections 24 and 25 of the Finance Act, 1949 (No. 13 of 1949), shall not apply and shall be deemed never to have applied in the case of a lease by a local authority under the provisions of the Housing of the Working Construction of this Part of this Act Classes Acts, 1890 to 1931, or the Labourers Acts, 1883 to 1941, or any Acts amending or extending those Acts, or of a lease by a society registered under the Industrial and Provident Societies Acts, 1893 to 1936, and made, in accordance with a scheme for the provision of houses for its members, to a member or to such member and the spouse of the member, and any amount of duty paid before the passing of this Act in respect of any such lease in excess of the amount chargeable under paragraph (3) of the heading "Lease or Tack" in the First Schedule to the Stamp Act, 1891, as amended by subsequent enactments other than the Finance Act, 1949 , may be repaid.

(2) Subsection (1) of this section shall apply if, but only if—

( a ) as respects section 24 of the Finance Act, 1949 — the lease contains a statement by the lessee certifying that the person who becomes entitled to the entire beneficial interest in the lessee's interest under the lease (or, where more than one person becomes entitled to a beneficial interest therein, each of them) is a person falling within a specified one of the classes set out in paragraphs (a) to ( f ) of subsection (4) of section 24 of the Finance Act, 1949 , and

( b ) as respects section 25 of the Finance Act, 1949 either the lease contains a statement such as aforesaid or the Revenue Commissioners are satisfied that it could properly have contained such a statement as aforesaid.

17.—(1) Whenever and so often as the rent for the time being payable in respect of any lease first executed on or after the 3rd day of May, 1950, is reduced on or after that date in consideration of any money, stock or security moving either to the lessor or to any other person, the instrument (in the subsequent subsections of this section referred to as the said instrument) on or after that date acknowledging the receipt of the consideration for the reduction (or, where the consideration is payable by instalments, of the instalment after payment of which the reduction becomes effective) or recording directly or indirectly that the rent has been reduced shall, notwithstanding anything in any other Act, be charged with the same stamp duty, and be subject to the provisions of the Stamp Act, 1891 (as amended by subsequent enactments), as if, instead of being such instrument, it were—

( a ) a lease of lands, tenements or hereditaments which had been made in consideration of the rent reduced as aforesaid and the consideration for the reduction, and for an indefinite term, and under which the person beneficially entitled at the date of the taking effect of the reduction of the rent to the lessee's interest in the property out of which the rent so reduced issues was the lessee, or

( b ) in the case specified in subsection (2) of this section, a lease such as is referred to in the foregoing paragraph and containing such a statement as is referred to in subsection (4) of section 24 of the Finance Act, 1949 (No. 13 of 1949).

(2) The case referred to in paragraph (b) of subsection (1) of this section is that in which the said instrument contains a statement, by the person entitled at the date of the taking effect of the reduction of the rent to the beneficial interest in the lessee's interest in the property out of which the rent so reduced issues, that he is within one of the classes specified in paragraphs (a) to ( f ) of subsection (4) of section 24 of the Finance Act, 1949 , or, where two or more persons were, so entitled, contains a statement by each of them such as aforesaid.

(3) ( a ) The said instrument, if executed before the passing of this Act, shall be deemed for the purposes of this Act to have been first executed on the passing of this Act, and shall be charged with the stamp duty specified in subsection (1) of this section accordingly.

( b ) the provisions of paragraph (a) of this subsection shall have effect in relation to the said instrument, if executed before the passing of this Act, notwithstanding that, before such passing, it may have been stamped with a particular stamp denoting either that it is not chargeable with any duty or is duly stamped.

( c ) Notwithstanding any of the foregoing provisions of this subsection, the total stamp duty chargeable on the said instrument, if executed before the passing of this Act, shall not exceed the amount with which it would have been charged if it had in fact been executed after the passing of this Act.

( d ) Where, at the expiration of thirty days after the passing of this Act, the said instrument, if executed before such passing, is not stamped with the stamp duty charged thereon by virtue of this Act, a sum equal to twice the unpaid stamp duty shall thereupon be a debt due to the Minister for Finance for the benefit of the Central Fund by the person beneficially entitled at the date or the taking effect of the reduction of the rent to the lessee's interest in the property out of which the rent so reduced issues or, where two or more persons were so entitled, by those persons jointly and severally, and the said sum shall be recoverable at the suit of the Attorney General in any court of competent jurisdiction.

( e ) The Revenue Commissioners may, if they think fit, mitigate or remit any sum recoverable under the provisions of paragraph (d)of this subsection.

18.—Stamp duty shall not be chargeable on any receipt given for any payment of a pension under the Old Age Pensions Acts, 1908 to 1948.

19.—(1) Where, in the opinion of the Revenue Commissioners, any body of persons carrying on industrial assurance business so carries on that business as to render it impracticable or inexpedient to require that the stamp duties chargeable on policies issued by the body in the course of that business should be charged and paid thereon, the Revenue Commissioners may enter into an agreement with that body for the delivery to the Revenue Commissioners of periodical accounts giving such particulars as may be required of the policies so issued by the body.

(2) The agreement shall be in such form and shall contain such terms and conditions as the Revenue Commissioners think proper.

(3) Where an agreement has been entered into under this section between the Revenue Commissioners and any body of persons, any policy which, during the period for which the agreement is in force, is issued by that body in the course of its industrial assurance business and which contains a statement that the appropriate stamp duty has been or will be paid to the Revenue Commissioners in accordance with the provisions of this section, shall not be chargeable with any stamp duty, but in lieu thereof and by way of composition there shall be charged, in respect of the policies issued during the period to which any such account as is mentioned in subsection (1) of this section relates, a stamp duty of an amount equal to the aggregate of the amounts of stamp duty which, but for the provisions of this section, would have been chargeable upon those policies, and the stamp duty chargeable under this subsection by way of such composition as aforesaid shall be paid by the body to the Revenue Commissioners on the delivery of the account.

(4) Where a body makes default in delivering any account required by any such agreement or in paying the duty payable on the delivery of any such account, the body shall be liable to a fine not exceeding fifty pounds for every day during which the default continues and shall also be liable to pay, in addition to the duty, interest thereon, which shall be recoverable in the same manner as if it were part thereof, at the rate of five per cent per annum from the date when the default begins.

(5) In this section, the expression "industrial assurance business" has the same meaning as in the Insurance Act, 1936 (No. 45 of 1936).

PART VII MISCELLANEOUS AND GENERAL

20.—(1) In this section, the expressions "the Minister ", "the Account","foreign exchange"and "foreign security" and the Words "gold" and "security" have the same meanings respectively as they have in section 49 of the Finance Act, 1941 (No. 14 of 1941).

(2) The Minister may invest any foreign exchange for the time being held for the credit of the Account by placing such exchange on interest-bearing deposit with a banking institution or purchasing securities which have been issued or guaranteed by the government of the country in which such exchange is held.

(3) Income arising from any investment under subsection (2) of this section shall be held for the credit of the Account.

(4) The Minister may, if he thinks proper, pay into the Account any sum received by him in respect of the net proceeds of any sale or disposal of any gold, foreign exchange or foreign security effected on his behalf or by his direction or authority in accordance with any provision made by or under statute.

(5) Each of the references in subsection (10) of section 49 of the Finance Act, 1941 , to the foregoing provisions of that section shall be construed as including a reference to the foregoing provisions of this section.

(6) Subsections (1) to (5) of this section shall be deemed to have come into operation on the establishment of the Account.

21.—(1) The latest date for winding-up the Transition Development Fund shall be the 31st day of March, 1951, in lieu of the date, the 31st day of March, 1950, stipulated in section 29 of the Finance Act, 1949 (No. 13 of 1949).

(2) There shall be paid into the Transition Development Fund, out of moneys provided by the Oireachtas, in the financial year ending on the 31st day of March, 1951, a sum not exceeding two million pounds.

(3) Subsection (1) of this section shall be deemed to have come into operation on the 31st day of March, 1950.

22.—(1) In this section—

the expression "the Minister" means the Minister for Finance;

the expression "the Account" means the Capital Services Redemption Account established pursuant to subsection (2) of this section;

the expression "the annuity" means the sum charged on the Central Fund under subsection (3) of this section;

the expression "capital services" means voted services which are to be met out of borrowings.

(2) There shall be established an account under the control of the Minister to be known as the Capital Services Redemption Account.

(3) A sum of £655,432 to redeem borrowings, and interest thereon, in respect of capital services shall be charged annually on the Central Fund or the growing produce thereof in the thirty successive financial years commencing with the financial year ending on the 31st day of March, 1951.

(4) The annuity shall be paid into the Account in equal half-yearly instalments.

(5) Any amount of the annuity, not exceeding £423,979 in any financial year, may be applied towards defraying the interest on the public debt.

(6) The balance of the annuity shall be applied in any one or more of the following ways:

( a ) application towards the purchase of government stock for cancellation,

( b ) repayment of ways and means advances or other temporary borrowings of the Exchequer,

( c ) payment into the Principal Reserve Account of the Savings Certificates Reserve Fund,

( d ) application in any other way towards meeting the principal liability in respect of the public debt,

( e ) investment in government securities or in any other manner in which moneys of the Post Office Savings Bank may be invested.

(7) Investments held for the Account may be sold or otherwise disposed of and the net proceeds of the sale or disposal shall be applied in any one or more of the ways specified in subsection (6) of this section.

(8) Income arising from any investment held for the Account shall be applied in any one or more of the ways specified in subsection (6) of this section.

(9) As soon as may be after each financial year, an account of the Account in respect of that year shall be prepared and shall be audited by the Comptroller and Auditor General and laid by the Minister before each House of the Oireachtas.

23.—With a view to providing moneys to meet general charges which will fall upon the Central Fund, the sum of three hundred thousand pounds shall be transferred and paid from the Road Fund to the Exchequer at such time or times in the financial year ending on the 31st day of March, 1951, and in such manner as the Minister for Finance shall direct.

24.—All taxes and duties imposed by this Act are hereby placed under the care and management of the Revenue Commissioners.

25.—(1) This Act may be cited as the Finance Act, 1950 .

(2) Part I of this Act shall be construed together with the Income Tax Acts.

(3) Part II of this Act, so far as it relates to duties of customs, shall be construed together with the Customs Acts and, so far as it relates to duties of excise, shall be construed together with the Statutes which relate to the duties of excise and the management of those duties.

(4) Part VI of this Act shall be construed together with the Stamp Act, 1891, and the enactments amending or extending that Act.

(5) Part I of this Act shall be deemed to come into force on and shall take effect as on and from the 6th day of April, 1950.

FIRST SCHEDULE

Section 10

CONVENTION BETWEEN THE GOVERNMENT OF IRELAND AND THE GOVERNMENT OF THE UNITED STATES OF AMERICA FOR THE AVOIDANCE OF DOUBLE TAXATION AND THE PREVENTION OF FISCAL EVASION WITH RESPECT TO TAXES ON THE ESTATES OF DECEASED PERSONS.

The Government of Ireland and the Government of the United States of America,

Desiring to conclude a Convention for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on estates of deceased persons,

Have appointed for that purpose as their Plenipotentiaries:

The Government of Ireland.

Patrick McGilligan, Minister for Finance;

Seán MacBride, Minister for External Affairs;

and

The Government of the United States of America:

George A. Garrett, Envoy Extraordinary and Minister Plenipotentiary of the United States of America at Dublin;

Who, having exhibited their respective full powers, found in good and due form, have agreed as follows:—

ARTICLE I.

(1) The taxes which are the subject of the present Convention are:

( a ) In the United States of America, the Federal estate tax, and

( b ) In Ireland, the estate duty imposed in that territory.

(2) The present Convention shall also apply to any other taxes of a substantially similar character imposed by either Contracting Party subsequently to the date of signature of the present Convention.

ARTICLE II.

(1) In the present Convention, unless the context otherwise requires:

( a ) The term "United States" means the United States of America, and when used in a geographical sense means the States, the Territories of Alaska and of Hawaii, and the District of Columbia.

( b ) The term "Ireland" means the Republic of Ireland.

( c ) The term "territory" when used in relation to one or the other Contracting Party means the United States or Ireland, as the context requires.

( d ) The term "tax" means the estate duty imposed in Ireland or the United States Federal estate tax, as the context requires.

(2) In the application of the provisions of the present Convention by one of the Contracting Parties, any term not otherwise defined shall, unless the context otherwise requires, have the meaning which it has under the laws of that Contracting Party relating to the taxes which are the subject of the present Convention.

ARTICLE III.

(1) For the purposes of the present Convention, the question whether a decedent was domiciled in any part of the territory of one of the Contracting Parties at the time of his death shall be determined in accordance with the law in force in that territory.

(2) Where a person dies domiciled in any part of the territory of one Contracting Party, the situs of any rights or interests, legal or equitable, in or over any of the following classes of property which for the purposes of tax form part of the estate of such person or pass on his death, shall, for the purposes of the imposition of tax and for the purposes of the credit to be allowed under Article V, be determined exclusively in accordance with the following rules, but in cases not within such rules the situs of any such rights or interests shall be determined for those purposes in accordance with the law relating to tax in force in the territory of the other Contracting Party:

( a ) Immovable property shall be deemed to be situated at the place where such property is located;

( b ) Tangible movable property (other than such property for which specific provision is hereinafter made) and bank or currency notes, other forms of currency recognised as legal tender in the place of issue, negotiable bills of exchange and negotiable promissory notes, shall be deemed to be situated at the place where such property, notes, currency or documents are located at the time of death, or, if in transitu, at the place of destination;

( c ) Debts, secured or unsecured, other than the forms of indebtedness for which specific provision is made herein, shall be deemed to be situated at the place where the decedent was domiciled at the time of death;

( d ) Shares or stock in a corporation other than a municipal or governmental corporation (including shares or stock held by a nominee where the beneficial ownership is evidenced by scrip certificates or otherwise) shall be deemed to be situated at the place in or under the laws of which such corporation was created or organized; but, if such corporation was created or organized under the laws of the United Kingdom of Great Britain and Northern Ireland or under the laws of Northern Ireland, and if the shares or stock of such corporation when registered on a branch register of such corporation kept in Ireland are deemed under the laws of the United Kingdom or of Northern Ireland and of Ireland to be assets situated in Ireland, such shares or stock shall be deemed to be assets situated in Ireland;

( e ) Moneys payable under a policy of assurance or insurance on the life of the decedent shall be deemed to be situated at the place where the decedent was domiciled at the time of death;

( f ) Ships and aircraft and shares thereof shall be deemed to be situated at the place of registration or documentation of the ship or aircraft;

( g ) Goodwill as a trade, business or professional asset shall be deemed to be situated at the place where the trade, business or profession to which it pertains is carried on;

( h ) Patents, trade-marks and designs shall be deemed to be situated at the place where they are registered;

( i ) Copyright, franchises, and rights or licences to use any copyrighted material, patent, trademark or design shall be deemed to be situated at the place where the rights arising therefrom are exercisable;

( j ) Rights or causes of action ex delicto surviving for the benefit of an estate of a decedent shall be deemed to be situated at the place where such rights or causes of action arose;

( k ) Judgement debts shall be deemed to be situated at the place where the judgement is recorded:

provided that if, apart from this paragraph, tax would be imposed by one Contracting Party on any property which is situated in its territory, this paragraph shall not apply to such property unless, by reason of its application or otherwise, tax is imposed or would but for some specific exemption be imposed thereon by the other Contracting Party.

ARTICLE IV.

(1) In determining the amount on which tax is to be computed, permitted deductions shall be allowed in accordance with the law in force in the territory in which the tax is imposed.

(2) Where tax is imposed by one Contracting Party on the death of a person who at the time of his death was not domiciled in any part of the territory of that Contracting Party but was domiciled in some part of the territory of the other Contracting Party, no account shall be taken in determining the amount or rate of such tax of property situated outside the former territory: provided that this paragraph shall not apply as respects tax imposed—

( a ) In the United States in the case of a United States citizen dying domiciled in any part of Ireland; or

( b ) In Ireland in the case of property passing under a disposition governed by the law of Ireland.

ARTICLE V.

(1) Where one Contracting Party imposes tax by reason of a decedent's being domiciled in some part of its territory or being its national, that party shall allow against so much of its tax (as otherwise computed) as is attributable to property situated in the territory of the other Contracting Party, a credit (not exceeding the amount of the tax so attributable) equal to so much of the tax imposed in the territory of such other Party as is attributable to such property; but this paragraph shall not apply as respects any such property as is mentioned in paragraph (2) of this Article.

(2) Where each Contracting Party imposes tax by reason of a decedent's being domiciled in some part of its territory, each Party shall allow against so much of its tax (as otherwise computed) as is attributable to property which is situated, or is deemed under paragraph (2) of Article III to be situated,

( a ) in the territory of both Parties, or

( b ) outside both territories,

a credit which bears the same proportion to the amount of its tax so attributable or to the amount of the other Party's tax attributable to the same property, whichever is the less, as the former amount bears to the sum of both amounts.

(3) Where Ireland imposes duty on property passing under a disposition governed by its law, that Party shall allow a credit similar to that provided by paragraph (1) of this Article.

(4) For the purposes of this Article, the amount of the tax of a Contracting Party attributable to any property shall be ascertained after taking into account any credit, allowance or relief, or any remission or reduction of tax, otherwise than in respect of tax payable in the territory of the other Contracting Party; and if, in respect of property situated outside the territories of both parties, a Contracting Party allows against its tax a credit for tax payable in the country where the property is situated, that credit shall be taken into account in ascertaining, for the purposes of paragraph (2) of this Article, the amount of the tax of that Party attributable to the property.

ARTICLE VI.

(1) Any claim for a credit or for a refund of tax founded on the provisions of the present Convention shall be made within six years from the date of the death of the decedent in respect of whose estate the claim is made, or, in the case of a reversionary interest where payment of tax is deferred until on or after the date on which the interest falls into possession, within six years from that date.

(2) Any such refund shall be made without payment of interest on the amount so refunded, save to the extent to which interest was paid on the amount so refunded when the tax was paid.

ARTICLE VII.

(1) The taxation authorities of the Contracting Parties shall exchange such information (being information available under the respective taxation laws of the Contracting Parties) as is necessary for carrying out the provisions of the present Convention or for the prevention of fraud or the administration of statutory provisions against legal avoidance in relation to the taxes which are the subject of the present Convention. Any information so exchanged shall be treated as secret and shall not be disclosed to any person other than those concerned with the assessment and collection of the taxes which are the subject of the present Convention. No information shall be exchanged which would disclose any trade secret or trade process.

(2) As used in this Article, the term "taxation authorities" means, in the case of the United States, the Commissioner of Internal Revenue or his authorized representative; in the case of Ireland, the Revenue Commissioners or their authorized representative.

ARTICLE VIII.

(1) The present Convention shall be ratified and the instruments of ratification shall be exchanged at Washington, District of Columbia, as soon as possible.

(2) The present Convention shall come into force on the date of exchange of ratifications and shall be effective only as to

( a ) the estates of persons dying on or after such date; and

( b ) the estate of any person dying before such date and after the last day of the calendar year immediately preceding such date whose personal representative elects, in such manner as may be prescribed, that the provisions of the present Convention shall be applied to such estate.

ARTICLE IX.

(1) The present Convention shall remain in force for not less than three years after the date of its coming into force.

(2) If not less than six months before the expiration of such period of three years, neither of the Contracting Parties shall have given to the other Contracting Party, through diplomatic channels, written notice of its intention to terminate the present Convention, the Convention shall remain in force after such period of three years until either of the Contracting Parties shall have given written notice of such intention, in which event the present Convention shall not be effective as to the estates of persons dying on or after the date (not being earlier than the sixtieth day after the date of such notice) specified in such notice, or, if no date is specified, on or after the sixtieth day after the date of such notice.

IN WITNESS WHEREOF the above-named Plenipotentiaries have signed the present Convention and have affixed thereto their seals.

Done at Dublin, in duplicate, this 13th day of September, 1949.

For the Government of Ireland:

(Signed) PATRICK McGILLIGAN

SEÁN MacBRIDE

For the Government of the United States of America:

(Signed) GEORGE A. GARRETT.

Section 12.

SECOND SCHEDULE

RECIPROCAL RELIEF OF DOUBLE TAXATION IN RESPECT OF IRISH INCOME TAX, SUR TAX AND CORPORATION PROFITS TAX AND UNITED STATES FEDERAL INCOME TAXES, INCLUDING SUR TAXES.

PART I.

CONVENTION BETWEEN THE GOVERNMENT OF IRELAND AND THE GOVERNMENT OF THE UNITED STATES OF AMERICA 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 the United States of America,

Desiring to conclude a Convention for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income,

Have appointed for that purpose as their Plenipotentiaries:

The Government of Ireland:

Patrick McGilligan, Minister for Finance;

Seán MacBride, Minister for External Affairs;

The Government of the United States of America:

George A. Garrett, Envoy Extraordinary and Minister Plenipotentiary of the United States of America at Dublin;

Who, having exhibited their respective full powers, found in good and due form, have agreed as follows:—

ARTICLE I.

(1) The taxes which are the subject of the present Convention are:—

( a ) In the United States of America:

The Federal income taxes, including surtaxes (hereinafter referred to as United States tax).

( b ) In Ireland:

The income tax (including surtax) and the corporation profits tax (hereinafter referred to as Irish tax).

(2) The present Convention shall also apply to any other taxes of a substantially similar character imposed by either Contracting Party subsequently to the date of signature of the present Convention.

ARTICLE II.

(1) In the present Convention, unless the context otherwise requires—

( a ) The term "United States" means the United States of America, and when used in a geographical sense means the States, the Territories of Alaska and of Hawaii, and the District of Columbia.

( b ) The term "Ireland" means the Republic of Ireland and the term "Irish" has a corresponding meaning.

( c ) The terms "territory of one of the Contracting Parties" and "territory of the other Contracting Party" mean the United States or Ireland as the context requires.

( d ) The term "United States corporation" means a corporation, association or other like entity created or organized in or under the laws of the United States.

( e ) The term "Irish corporation" means any kind of juridical person created under the laws of Ireland.

( f ) The terms "corporation of one Contracting Party" and "corporation of the other Contracting Party" mean a United States corporation or an Irish corporation as the context requires.

( g ) The term "resident of Ireland" means any person (other than a citizen of the United States or a United States corporation) who is resident in Ireland for the purposes of Irish tax and not resident in the United States for the purposes of United States tax. A corporation is to be regarded as resident in Ireland if its business is managed and controlled in Ireland.

( h ) The term "resident of the United States" means any individual who is resident in the United States for the purposes of United States tax and not resident in Ireland for the purposes of Irish tax, and any United States corporation and any partnership created or organized in or under the laws of the United States, being a corporation or partnership which is not resident in Ireland for the purposes of Irish tax.

( i ) The term "Irish enterprise" means an industrial or commercial enterprise or undertaking carried on by a resident of Ireland.

( j ) The term "United States enterprise" means an industrial or commercial enterprise or undertaking carried on by a resident of the United States.

( k ) The terms "enterprise of one of the Contracting Parties" and "enterprise of the other Contracting Party" mean a United States enterprise or an Irish enterprise, as the context requires.

( l ) The term "permanent establishment" when used with respect to an enterprise of one of the Contracting Parties means a branch management, factory or other fixed place of business, but does not include an agency unless the agent has, and habitually exercises, a general authority to negotiate and conclude contracts on behalf of such enterprise or has a stock of merchandise from which he regularly fills orders on its behalf. An enterprise of one of the Contracting Parties shall not be deemed to have a permanent establishment in the territory of the other Contracting Party merely because it carries on business dealings in the territory of such other Contracting Party through a bona fide commission agent or broker acting in the ordinary course of his business as such. The fact that an enterprise of one of the Contracting Parties maintains in the territory of the other Contracting Party a fixed place of business exclusively for the purchase of goods or merchandise shall not of itself constitute such fixed place of business a permanent establishment of such enterprise. The fact that a corporation of one Contracting Party has a subsidiary corporation which is a corporation of the other Contracting Party or which is engaged in trade or business in the territory of such other Contracting Party (whether through a permanent establishment or otherwise) shall not of itself constitute that subsidiary corporation a permanent establishment of its parent corporation.

(2) For the purposes of Articles VI, VII, VIII, IX and XIV, a resident of Ireland shall not be deemed to be engaged in trade or business in the United States in any taxable year unless such resident has a permanent establishment situated therein in such taxable year. The same principle shall be applied, mutatis mutandis, by Ireland in the ewe of a resident of the United States.

(3) In the application of the provisions of the present Convention by one of the Contracting Parties any term not otherwise defined shall, unless the context otherwise requires, have the meaning which it has under the laws of that Contracting Party relating to the taxes which are the subject of the present Convention.

ARTICLE III.

(1) An Irish enterprise shall not be subject to United States tax in respect of its industrial or commercial profits unless it is engaged in trade or business in the United States through a permanent establishment situated therein. If it is so engaged, United States tax may be imposed upon the entire income of such enterprise from all sources within the United States.

(2) A United States enterprise shall not be subject to Irish tax in respect of its industrial or commercial profits unless it is engaged in trade or business in Ireland through a permanent establishment situated therein. If it is so engaged, Irish tax may be imposed upon the entire income of such enterprise from all sources within Ireland.

(3) Where an enterprise of one of the Contracting Parties is engaged in trade or business in the territory of the other Contracting Party through a permanent establishment situated therein, there shall be attributed to such permanent establishment the industrial or commercial profits which it might be expected to derive if it were an independent enterprise engaged in the same or similar activities under the same or similar conditions and dealing at arm's length with the enterprise of which it is a permanent establishment, and the profits so attributed shall, subject to the law of such other Contracting Party, be deemed to be income from sources within the territory of such other Contracting Party.

(4) In determining the industrial or commercial profits from sources within the territory of one of the Contracting Parties of an enterprise of the other Contracting Party, no profits shall be deemed to arise from the mere purchase of goods or merchandise within the territory of the former Contracting Party by such enterprise.

ARTICLE IV.

Where an enterprise of one of the Contracting Parties, by reason of its participation in the management, control or capital of an enterprise of the other Contracting Party, makes with or imposes on the latter, in their commercial or financial relations, conditions different from those which would be made with an independent enterprise, any profits which would normally have accrued to one of the enterprises but by reason of those conditions have not so accrued, may be included in the profits of that enterprise and taxed accordingly.

ARTICLE V.

(1) Notwithstanding the provisions of Articles III and 1V of the present Convention, profits which an individual resident of Ireland of an Irish corporation derives from operating ships documented or aircraft registered under the laws of Ireland, shall be exempt from United States tax.

(2) Notwithstanding the provisions of Articles III and IV of the present Convention, profits which a citizen of the United States not resident in Ireland or a United States corporation derives from operating ships documented or aircraft registered under the laws of the United States, shall be exempt from Irish tax.

(3) This Article shall not be deemed to affect the arrangement between Ireland and the United States, providing for reciprocal exemption of shipping profits from income tax, effected between the Government of the United States and the Government of Ireland by exchange of Notes dated August 24, 1933, and January 8, 1934.

ARTICLE VI.

(1) The rate of United States tax on dividends derived from a United States corporation by a resident of Ireland who is subject to Irish tax on such dividends and not engaged in trade or business in the United States shall not exceed 15 per cent.: provided that such rate of tax shall not exceed five per cent. if such resident is a corporation controlling, directly or indirectly, at least 95 per cent. of the entire voting power in the corporation paying the dividend, and not more than 25 per cent. of the gross income of such paying corporation is derived from interest and dividends, other than interest and dividends received from its own subsidiary corporations. Such reduction of the rate to five per cent. shall not apply if the relationship of the two corporations has been arranged or is maintained primarily with the intention of securing such reduced rate.

(2) Dividends derived from sources within Ireland by an individual who is (a) a resident of the United States, (b) subject to United States tax with respect to such dividends, and (c) not engaged in trade or business in Ireland, shall be exempt from Irish surtax.

(3) Either of the Contracting Parties may terminate this Article by giving written notice of termination to the other Contracting Party, through diplomatic channels, on or before the thirtieth day of June in any calendar year after the calendar year in which the exchange of the instruments of ratification takes place and in such event paragraph (1) hereof shall cease to be effective as to United States tax on and after the first day of January, and paragraph (2) hereof shall cease to be effective as to Irish tax on and after the sixth day of April, in the calendar year next following that in which such notice is given.

ARTICLE VII.

(1) Interest (on bonds, securities, notes, debentures, or on any other form of indebtedness) derived from sources within the United States by a resident of Ireland who is subject to Irish tax on such interest and not engaged in trade or business in the United States, shall be exempt from United States tax; but such exemption shall not apply to such interest paid by a United States corporation to a corporation resident in Ireland controlling, directly or indirectly, more than 50 per cent. of the entire voting power in the paying corporation.

(2) Interest (on bonds, securities, notes, debentures or on any other form of indebtedness) derived from sources within Ireland by a resident of the United States who is subject to United States tax on such interest and not engaged in trade or business in Ireland, shall be exempt from Irish tax; but such exemption shall not apply to such interest paid by a corporation resident in Ireland to a United States corporation controlling, directly or indirectly, more than 50 per cent. of the entire voting power in the paying corporation.

ARTICLE VIII.

(1) Royalties and other amounts paid as consideration for the use of, or for the privilege of using, copyrights, patents, designs, secret processes and formulae, trademarks, and other like property, and derived from sources within the United States by a resident of Ireland who is subject to Irish tax on such royalties or other amounts and not engaged in trade or business in the United States, shall be exempt from United States tax.

(2) Royalties and other amounts paid as consideration for the use of, or for the privilege of using, copyrights, patents, designs, secret processes and formulae, trademarks, and other like property, and derived from sources within Ireland by a resident of the United States who is subject to United States tax on such royalties or other amounts and not engaged in trade or business in Ireland shall be exempt from Irish tax.

(3) For the purposes of this Article the term "royalties" shall be deemed to include rentals in respect of motion picture films.

ARTICLE IX.

(1) The rate of United States tax on royalties in respect of the operation of mines or quarries or of other extraction of natural resources, and on rentals from real property or from an interest in such property, derived from sources within the United States by a resident of Ireland who is subject to Irish tax with respect to such royalties or rentals and not engaged in trade or business in the United States, shall not exceed 15 per cent.: provided that any such resident may elect for any taxable year to be subject to United States tax as if such resident were engaged in trade or business in the United States.

(2) Royalties in respect of the operation of mines or quarries or of other extraction of natural resources, and rentals from real property or from an interest in such property, derived from sources within Ireland by an individual who is (a) a resident of the United States, (b) subject to United States tax with respect to such royalties and rentals, and (c) not engaged in trade or business in Ireland, shall be exempt from Irish surtax.

ARTICLE X.

(1) Any salary, wage, similar remuneration, or pension, paid by the Government of the United States to an individual (other than a citizen of Ireland who is not also a citizen of the United States) in respect of services rendered to the United States in the discharge of governmental functions, shall be exempt from Irish tax.

(2) Any salary, wage, similar remuneration, or pension, paid by the Government of Ireland to an individual (other than a citizen of the United States who is not also a citizen of Ireland) in respect of services rendered to Ireland in the discharge of governmental functions, shall be exempt from United States tax.

(3) The provisions of this Article shall not apply to payments in respect of services rendered in connection with any trade or business carried on by either of the Contracting Parties for purposes of profit.

ARTICLE XI.

(1) An individual who is a resident of Ireland shall be exempt from United States tax upon compensation for personal (including professional) services performed during the taxable year within the United States if (a) he is present within the United States for a period or periods not exceeding in the aggregate 183 days during such taxable year, and (b) such services are performed for or on behalf of a person resident in Ireland.

(2) An individual who is a resident of the United States shall be exempt from Irish tax upon profits, emoluments or other remuneration in respect of personal (including professional) services performed within Ireland in any year of assessment if (a) he is present within Ireland for a period or periods not exceeding in the aggregate 183 days during that year, and (b) such services are performed for or on behalf of a person resident in the United States.

ARTICLE XII.

(1) Any pension (other than a pension to which Article X applies), and any life annuity, derived from sources within the United States by an individual who is a resident of Ireland shall be exempt from United States tax.

(2) Any pension (other than a pension to which Article X applies), and any life annuity, derived from sources within Ireland by an individual who is a resident of the United States shall be exempt from Irish tax.

(3) The term "life annuity" means a stated sum payable periodically at stated times, during life or during a specified or ascertainable period of time, under an obligation to make the payments in consideration of money paid.

ARTICLE XIII.

(1) Subject to section 131 of the United States Internal Revenue Code as in effect on the day on which this Convention shall have come into effect, Irish tax shall be allowed as a credit against United States tax. For this purpose, the recipient of a dividend paid by a corporation which is a resident of Ireland shall be deemed to have paid the Irish income tax appropriate to such dividend if such recipient elects to include in his gross income for the purposes of United States tax the amount of such Irish income tax. For the purposes only of this Article, income derived from sources in the United Kingdom by an individual who is resident in Ireland shall be deemed to be income from sources in Ireland if such income is not subject to United Kingdom income tax.

(2) Subject to such provisions (which shall not affect the general principle hereof) as may be enacted in Ireland, United States tax payable in respect of income from sources within the United States shall be allowed as a credit against any Irish tax payable in respect of that income. Where such income is an ordinary dividend paid by a United States corporation, such credit shall take into account (in addition to any United States income tax deducted from or imposed on such dividend) the United States income tax imposed on such corporation in respect of its profits, and where it is a dividend paid on participating preference shares and representing both a dividend at the fixed rate to which the shares are entitled and an additional participation in profits, such tax on profits shall likewise be taken into account in so far as the dividend exceeds such fixed rate.

(3) For the purposes of this Article, compensation, profits, emoluments and other remuneration for personal (including professional) services shall be deemed to be income from sources within the territory of the Contracting Party where such services are performed.

ARTICLE XIV.

A resident of Ireland not engaged in trade or business in the United States shall be exempt from United States tax on gains from the sale or exchange of capital assets.

ARTICLE XV.

(1) Dividends and interest paid, on or after the first day of January in the calendar year in which the exchange of instruments of ratification takes place, by an Irish corporation shall be exempt from United States tax except where the recipient is a citizen of or a resident in the United States or a United States corporation.

(2) Dividends and interest paid, on or after the 6th day of April of the first year of assessment specified in Article XXII (2) ( b ) (i) of this Convention, by a United States corporation shall be exempt from Irish tax except where the recipient is a resident of Ireland.

ARTICLE XVI.

An Irish corporation shall be exempt from United States tax on its accumulated or undistributed earnings, profits, income or surplus, if individuals who are residents of Ireland control, directly or indirectly, throughout the latter half of the taxable year, more than 50 per cent. of the entire voting power in such corporation.

ARTICLE XVII.

(1) The United States income tax liability for any taxable year beginning prior to January 1, 1936, of any individual (other than a citizen of the United States) resident in Ireland, or of any Irish corporation, remaining unpaid on the date of signature of the present Convention, may be adjusted on a basis satisfactory to the United States Commissioner of Internal Revenue: provided that the amount to be paid in settlement of such liability shall not exceed the amount of the liability which would have been determined if—

( a ) the United States Revenue Act of 1936 (except in the case of an Irish corporation in which more than 50 per cent. of the entire voting power was controlled, directly or indirectly, throughout the latter half of the taxable year, by citizens or residents of the United States), and

( b ) Articles XV and XVI of the present Convention, had been in effect for such year. If the taxpayer was not, within the meaning of such Revenue Act, engaged in trade or business in the United States and had no office or place of business therein during the taxable year, the amount of interest and penalties shall not exceed 50 per cent. of the amount of the tax with respect to which such interest and penalties have been computed.

(2) The United States income tax unpaid on the date of signature of the present Convention for any taxable year beginning after the thirty-first day of December, 1935, and prior to the first day of January in the calendar year in which the exchange of instruments of ratification takes place in the case of an individual resident of Ireland or in the case of any Irish corporation shall be determined as if the provisions of Articles XV and XVI of the present Convention had been in effect for such taxable year.

(3) The provisions of paragraph (1) of this Article shall not apply—

( a ) unless the taxpayer files with the Commissioner of Internal Revenue on or before the thirty-first day of December of the second calendar year following the calendar year in which the exchange of the instruments of ratification takes place a request that such tax liability be so adjusted and furnishes such information as the Commissioner may require; or

( b ) in any case in which the Commissioner is satisfied that any deficiency in tax is due to fraud with intent to evade the tax.

ARTICLE XVIII.

A professor or teacher from the territory of one of the Contracting Parties who visits the territory of the other Contracting Party for the purpose of teaching, for a period not exceeding two years, at a university, college, school or other educational institution in the territory of such other Contracting Party shall be exempted by such other Contracting Party from tax on his remuneration for such teaching for such period.

ARTICLE XIX.

A student or business apprentice from the territory of one of the Contracting Parties who is receiving full-time education or training in the territory of the other Contracting Party shall be exempted by such other Contracting Party from tax on payments made to him by persons within the territory of the former Contracting Party for the purposes of his maintenance, education or training.

ARTICLE XX.

(1) The taxation authorities of the Contracting Parties shall exchange such information (being information available under the respective taxation laws of the Contracting Parties) as is necessary for carrying out the provisions of the present Convention or for the prevention of fraud or the administration of statutory provisions against legal avoidance in relation to the taxes which are the subject of the present Convention. Any information so exchanged shall be treated as secret and shall not be disclosed to any person other than those concerned with the assessment and collection of the taxes which are the subject of the present Convention. No information shall be exchanged which would disclose any trade secret or trade process.

(2) As used in this Article, the term "taxation authorities" means, in the case of the United States, the Commissioner of Internal Revenue or his authorized representative and, in the case of Ireland, the Revenue Commissioners or their authorized representative.

ARTICLE XXI.

(1) The nationals of one of the Contracting Parties shall not, while resident in the territory of the other Contracting Party, be subjected therein to other or more burdensome taxes than are the nationals of such other Contracting Party resident in its territory.

(2) The term "nationals" as used in this Article means—

( a ) In relation to Ireland, all citizens of Ireland; and

( b ) In relation to the United States, United States citizens;

and includes all legal persons, partnerships and associations deriving their status as such from, or created or organized under, the laws in force in any territory of the Contracting Parties to which the present Convention applies.

ARTICLE XXII.

(1) The present Convention shall be ratified and the instruments of ratification shall be exchanged at Washington, District of Columbia, as soon as possible.

(2) Upon exchange of ratifications, the present Convention shall have effect—

( a ) as respects United States tax, for the taxable years beginning on or after the first day of January in the calendar year in which the exchange of instruments of ratification takes place;

( b ) (i) as respects Irish income tax, for the year of assessment beginning on the 6th day of April in the calendar year in which the exchange of instruments of ratification takes place and subsequent years;

(ii) as respects Irish surtax, for the year of assessment beginning on the 6th day of April immediately preceding the calendar year in which the exchange of instruments of ratification takes place, and subsequent years; and

(iii) as respects Irish corporation profits tax, for any chargeable accounting period beginning on or after the first day of April in the calendar year in which the exchange of instruments of ratification takes place, and for the unexpired portion of any chargeable accounting period current at that date.

ARTICLE XXIII.

(1) The present Convention shall continue in effect indefinitely but either of the Contracting Parties may, on or before the 30th day of June in any calendar year following the calendar year in which the exchange of instruments of ratification takes place, give to the other Contracting Party, through diplomatic channels, notice of termination and, in such event, the present Convention shall cease to be effective—

( a ) as respects United States tax, for the taxable years beginning on or after the first day of January in the calendar year next following that in which such notice is given;

( b ) (i) as respects Irish income tax, for any year of assessment beginning on or after the 6th day of April in the calendar year next following that in which such notice is given; (ii) as respects Irish surtax, for any year of assessment beginning on or after the 6th day of April in the calendar year in which such notice is given; and (iii) as respects Irish corporation profits tax, for any chargeable accounting period beginning on or after the first day of April in the calendar year next following that in which such notice is given and for the unexpired portion of any chargeable accounting period current at that date.

(2) The termination of the present Convention or of any Article thereof shall not have the effect of reviving any treaty or arrangement abrogated by the present Convention or by treaties previously concluded between the Contracting Parties.

IN WITNESS WHEREOF the above-named Plenipotentiaries have signed the present Convention and have affixed thereto their seals.

Done at Dublin, in duplicate, this thirteenth day of September 1949.

For the Government of Ireland:

P. McGILLIGAN

SEÁN MacBRIDE

For the Government of the United States of America

GEORGE A. GARRETT.

PART II.

PROVISIONS AS TO RELIEF FROM INCOME TAX (INCLUDING SUR-TAX) AND CORPORATION PROFITS TAX BY WAY OF CREDIT IN RESPECT OF UNITED STATES TAX.

INTERPRETATION.

1. In this Part of the Schedule—

the expression "the Convention" means the convention set forth in Part I of this Schedule;

the expression "income tax" includes sur-tax except where the context otherwise requires;

the expression "income" in relation to corporation profits tax, means profits;

the expression "the Irish taxes" means income tax (including sur-tax) and corporation profits tax;

the expression "United States tax" has the same meaning as in Article I of the Convention.

GENERAL.

2.—(1) Subject to the provisions of this Part of this Schedule, where, under the Convention, credit is to be allowed against any of the Irish taxes chargeable in respect of any income, the amount of the Irish taxes so chargeable shall be reduced by the amount of the credit.

(2) The credit to be allowed shall be first applied in reducing the amount of any corporation profits tax chargeable in respect of the income and, so far as it cannot be so applied, in reducing the income tax chargeable in respect thereof.

(3) Nothing in this paragraph authorises the allowance of credit against any Irish tax against which credit is not allowable under the Convention.

REQUIREMENTS AS TO INCORPORATION AND RESIDENCE.

3.—(1) Credit shall not be allowed against corporation profits tax unless the company in respect of whose income the corporation profits tax is chargeable is incorporated by or under the laws of the State.

(2) Credit shall not be allowed against income tax for any year of assessment unless the person in respect of whose income the tax is chargeable is resident in the State for that year.

LIMIT ON TOTAL CREDIT-CORPORATION PROFITS TAX.

4. The amount of the credit to be allowed against corporation profits tax for United States tax in respect of any income shall not exceed the corporation profits tax attributable to that income.

LIMIT ON TOTAL CREDIT—INCOME TAX.

5.—(1) The amount of the credit to be allowed against income tax for United States tax in respect of any income shall not exceed the sum which would be produced by computing the amount of that income in accordance with the Income Tax Acts (including this Act), and then charging it to income tax for the year of assessment for which the credit is to be allowed, but at the following rate, that is to say—

( a ) in the case of a person whose income is chargeable to income tax but not to sur-tax, a rate ascertained by dividing the income tax payable by that person for that year by the amount of the total income of that person for that year;

( b ) in the case of a person whose income is chargeable to sur-tax, the sum of the following rates—

(i) the rate which would have been the appropriate rate in his case if his income had been chargeable to income tax but not to sur-tax; and

(ii) the rate ascertained by dividing the sur-tax payable by him for that year by the amount of his total income for that year:

Provided that where, under the Convention, credit is not to be allowed against sur-tax for the year, the rate shall be calculated in all cases as in the case of persons whose incomes are chargeable to income tax but not to sur-tax, and where, under the Convention, credit is not to be allowed except against sur-tax for the year, the rate shall be that ascertained by dividing the sur-tax payable by the person in question for the year by the amount of his total income for the year.

(2) For the purpose of determining the said rate, the tax payable by any person for any year shall be computed without regard to any relief in respect of life assurance premiums and without any reduction thereof for any credit allowed or to be allowed under the Convention but shall be deemed to be reduced by any tax which, otherwise than under Rule 20 of the General Rules, the person in question is entitled to charge against any other person, and the total income of any person shall be deemed to be reduced by the amount of any income the income tax upon which that person is entitled to charge as aforesaid.

(3) Where credit for United States tax falls to be allowed in respect of any income and any relief would, but for the provisions of this sub-paragraph, fall to be allowed in respect of that income under the provisions of section 3 of the Finance Act, 1941 (No. 14 of 1941), as amended by section 2 of the Finance Act, 1943 (No. 16 of 1943), the said relief shall not be allowed.

6. Without prejudice to the provisions of the last preceding paragraph, the total credit to be allowed to a person against income tax for any year of assessment shall not exceed the total income tax payable by the person in question for that year of assessment, less any tax which, otherwise than under Rule 20 of the General Rules, that person is entitled to charge against any other person.

EFFECT ON COMPUTATION OF INCOME OF ALLOWANCE OF CREDIT.

7.—(1) Subject to the provisions of this paragraph, where credit for United States tax falls to be allowed against any of the Irish taxes in respect of any income, no deduction for United States tax (whether in respect of that or any other income) shall be made in computing the amount of that income for the purposes of corporation profits tax.

(2) Where the income includes a dividend and, under the Convention, United States tax not chargeable directly or by deduction in respect of the dividend is to be taken into account in considering whether any, and if so what, credit is to be allowed against the Irish taxes in respect of the dividend, the amount of the income shall, for the purposes of corporation profits tax, be treated as increased by the amount of the United States tax not so chargeable which falls to be taken into account in computing the amount of the credit.

(3) Notwithstanding anything in the preceding provisions of this paragraph, where part of the United States tax in respect of the income (including any such tax which, under sub-paragraph (2) of this paragraph, falls to be treated as increasing the amount of the income) cannot be allowed as a credit against any of the Irish taxes, the amount of the income shall be treated for the purposes of corporation profits tax as reduced by that part of that United States tax.

8.—(1) Where credit for United States tax falls to be allowed against any of the Irish taxes in respect of any income, the following provisions of this paragraph shall have effect as respects the computation, for the purposes of income tax, of the amount of that income.

(2) Where the income tax payable depends on the amount received in the State, the said amount shall be treated as increased by the amount of the credit allowable against income tax.

(3) Where the last preceding sub-paragraph does not apply—

( a ) no deduction shall be made for United States tax (whether in respect of the same or any other income); and

( b ) where the income includes a dividend and under the Convention United States tax not chargeable directly or by deduction in respect of the dividend is to be taken into account in considering whether any, and if so what, credit is to be allowed against the Irish taxes in respect of the dividend, the amount of the income shall be treated as increased by the amount of the United States tax not so chargeable which falls to be taken into account in computing the amount of the credit; but

( c ) notwithstanding anything in the preceding provisions of this sub-paragraph, where any part of the United States tax in respect of the income (including any such tax which, under clause (b) of this sub-paragraph, falls to be treated as increasing the amount of the income) either falls to be allowed as a credit against corporation profits tax, or cannot be allowed as a credit against any of the Irish taxes, the amount of the income shall be treated for the purposes of income tax as reduced by that part of that United States tax.

(4) In relation to the computation of the total income of a person for the purpose of determining the rate mentioned in paragraph 5 of this Part of this Schedule, the preceding provisions of this paragraph shall have effect subject to the following modifications—

( a ) for the reference in sub-paragraph (2) to the amount of the credit allowable against income tax, there shall be substituted a reference to the amount of the United States tax in respect of the income (in the case of a dividend, United States tax not chargeable directly or by deduction in respect of the dividend being left out of account); and

( b ) clauses (b) and (c) of sub-paragraph (3) shall not apply,

and subject to those modifications shall have effect in relation to all income in the case of which credit falls to be allowed for United States tax.

SPECIAL PROVISIONS AS TO DIVIDENDS.

9. Where, in the case of any dividend, United States tax not chargeable directly or by deduction in respect of the dividend is, under the Convention, to be taken into account in considering whether any, and if so what, credit is to be allowed against the Irish taxes in respect of the dividend, the United States tax not so chargeable which is to be taken into account shall be that borne by the body corporate paying the dividend upon the relevant profits in so far as it is properly attributable to the proportion of the relevant profits which is represented by the dividend.

The relevant profits are—

( a ) if the dividend is paid for a specified period, the profits of that period;

( b ) if the dividend is not paid for a specified period, but is paid out of specified profits, those profits;

( c ) if the dividend is paid neither for a specified period nor out of specified profits, the profits of the last period for which accounts of the body corporate were made up which ended before the dividend became payable:

Provided that if, in a case falling under sub-paragraph (a) or subparagraph (c) of this paragraph, the total dividend exceeds the profits available for distribution of the period mentioned in the said subparagraph (a) or the said sub-paragraph (c), as the case may be, the relevant profits shall be the profits of that period plus so much of the profits available for distribution of preceding periods (other than profits previously distributed or previously treated as relevant for the purposes of this paragraph) as is equal to the excess; and for the purposes of this proviso the profits of the most recent preceding period shall first be taken into account, then the profits of the next most recent preceding period, and so on.

10. Where—

( a ) the Convention provides, in relation to dividends of some classes, but not in relation to dividends of other classes, that United States tax not chargeable directly or by deduction in respect of dividends is to be taken into account in considering whether any, and if so what, credit is to be allowed against the Irish taxes in respect of the dividends; and

( b ) a dividend is paid which is not of a class in relation to which the Convention so provides,

then, if the dividend is paid to a company which controls, directly or indirectly, not less than one half of the voting power in the company paying the dividend, credit shall be allowed as if the dividend were a dividend of a class in relation to which the Convention so provides.

MISCELLANEOUS.

11. Credit shall not be allowed under the Convention against the Irish taxes chargeable in respect of any income of any person if the person in question elects that credit shall not be allowed in respect of that income.

12. Where, under the Convention, relief may be given either in the State or in the United States in respect of any income and it appears that the assessment to income tax or to corporation profits tax made in respect of the income is not made in respect of the full amount thereof or is incorrect having regard to the credit, if any, which falls to be given under the Convention, any such additional assessments may be made as are necessary to ensure that the total amount of the income is assessed and the proper credit, if any, is given in respect thereof, and where the income is entrusted to any person in the State for payment, any such additional assessment to income tax may be made on the recipient of the income under Case VI of Schedule D.

13.—(1) Subject to the provisions of paragraph 14 of this Part of this Schedule, any claim for an allowance by way of credit for United States tax in respect of any income shall be made in writing to the inspector of taxes not later than six years from the end of the relevant year of assessment, and, if the inspector objects to any such claim, it shall be heard and determined by the Special Commissioners as if it were an appeal to them against an assessment to income tax and the provisions of the Income Tax Acts relating to the re-hearing of an appeal or the statement of a case for the opinion of the High Court on a point of law, shall, with the necessary modifications, apply accordingly.

(2) In this paragraph, the expression "the relevant year of assessment" means, in relation to credit for United States tax in respect of any income, the year of assessment for which that income falls to be charged to income tax or would fall so to be charged if any income tax were chargeable in respect thereof.

14. Where the amount of any credit given under the Convention is rendered excessive or insufficient by reason of any adjustment of the amount of any tax payable either in the State or in the United States, nothing in the Income Tax Acts or in the enactments relating to corporation profits tax limiting the time for the making of assessments or claims for relief shall apply to any assessment or claim to which the adjustment gives rise, being an assessment or claim made not later than six years from the time when all such assessments, adjustments and other determinations have been made, as are material in determining whether any, and if so what, credit falls to be given.