S.I. No. 191/1960:

DOUBLE TAXATION RELIEF (TAXES ON INCOME AND CAPITAL) (KINGDOM OF SWEDEN) ORDER, 1960.

DOUBLE TAXATION RELIEF (TAXES ON INCOME AND CAPITAL) (KINGDOM OF SWEDEN) ORDER, 1960.

WHEREAS it is enacted by subsection (1) of section 44 of the Finance Act, 1958 (No. 25 of 1958), that if the Government by order declare that arrangements specified in the order have been made with the government of any territory outside the State in relation to affording relief from double taxation in respect of income tax, sur-tax or corporation profits tax and any taxes of a similar character, imposed by the laws of the State or by the laws of that territory, and that it is expedient that those arrangements should have the force of law, the arrangements shall, notwithstanding anything in any enactment, have the force of law:

AND WHEREAS it is further enacted by subsection (2) of section 49 of that Act that where such an order is proposed to be made, a draft thereof shall be laid before Dáil Éireann and the order shall not be made until a resolution approving of the draft has been passed by Dáil Éireann:

AND WHEREAS a draft of this Order has been laid before Dáil Éireann and a resolution approving of the draft has been passed by Dáil Éireann:

NOW, the Government, in exercise of the powers conferred on them by section 44 of the Finance Act, 1958 (No. 25 of 1958), hereby order as follows:

1. This Order may be cited as the Double Taxation Relief (Taxes on Income and Capital) (Kingdom of Sweden) Order, 1960.

2. It is hereby declared--

(a) that the arrangements specified in the Agreement set out in the Schedule to this Order have been made with the Government of Sweden in relation to affording relief from double taxation in respect of income tax, sur-tax or corporation profits tax and any taxes of a similar character, imposed by the laws of the State or by the laws of Sweden, and

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

SCHEDULE.

AGREEMENT

between the Government of Ireland and the Royal Government of Sweden for the avoidance of double taxation with respect to taxes on income and capital.

The Government of Ireland and the Royal Government of Sweden, desiring to conclude an agreement for the avoidance of double taxation with respect to taxes on income and capital, have agreed as follows:

Article I.

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

(a) In the case of Ireland:

(i) the income tax (including sur-tax); and

(ii) the corporation profits tax (hereinafter referred to as "Irish tax").

(b) In the case of Sweden:

(i) the State income tax, including sailors tax and coupon tax;

(ii) the tax on public entertainers (bevillningsavgifterna för särskilda förmaner och rättigheter);

(iii) the communal income tax (kommunal inkomstskatt); and

(iv) the State capital tax for the purposes of Articles XXI, XXIII, XXIV, XXV, XXVI, XXVIII and XXIX (hereinafter referred to as "Swedish tax").

(2) This Agreement shall also apply to any identical or substantially similar taxes which are subsequently imposed in addition to, or in place of the existing taxes. At the end of each year, the competent authorities of the Contracting Parties shall notify to each other any changes which have been made in their respective taxation laws.

(3) The competent authorities of the Contracting Parties shall by mutual agreement resolve any doubts which arise as to the taxes to which this Agreement ought to apply.

Article II.

(1) In the present Agreement, unless the context otherwise requires--

(a) the terms "one of the territories" and "the other territory" mean Sweden or Ireland, as the context requires;

(b) The term "tax" means Swedish tax or Irish tax, as the context requires;

(c) The term "person" includes any body of persons, corporate or not corporate;

(d) The term "company" means any body corporate;

(e) The terms "resident of Sweden" and "resident of Ireland" mean respectively any person who is resident in Sweden for the purposes of Swedish tax and not resident in Ireland for the purposes of Irish tax, and any person who is resident in Ireland for the purposes of Irish tax and not resident in Sweden for the purposes of Swedish tax; a company shall be regarded as resident in Sweden if it is incorporated in or under the laws of Sweden and its business is not managed and controlled in Ireland, or if it is not so incorporated but its business is managed and controlled in Sweden; and as resident in Ireland if its business is managed and controlled in Ireland. Provided that nothing in this paragraph shall affect any provisions of the law of Ireland regarding the imposition of corporation profits tax in the case of a company incorporated in Ireland;

(f) The terms "resident of one of the territories" and "resident of the other territory" mean a person who is a resident of Sweden or a person who is a resident of Ireland, as the context requires.

(g) The terms "Swedish enterprise" and "Irish enterprise" mean respectively an industrial or commercial enterprise or undertaking carried on by a resident of Sweden and an industrial or commercial enterprise or undertaking carried on by a resident of Ireland, and the terms "enterprise of one of the territories" and "enterprise of the other territory" mean a Swedish enterprise or an Irish enterprise, as the context requires;

(h) The term "industrial or commercial profits" includes rents or royalties in respect of cinematograph including television films;

(i) The term "permanent establishment" means a fixed place of business in which the business of the enterprise is wholly or partly carried on.

(i) A permanent establishment shall include especially:

(a) a place of management;

(b) a branch;

(c) an office;

(d) a factory;

(e) a workshop;

(f) a mine, quarry or other place of extraction of natural resources;

(g) a building site or construction or assembly project which exists for more than twelve months.

(ii) The term "permanent establishment" shall not be deemed to include:

(a) the use of facilities solely for the purpose of storage, display or delivery of goods or merchandise belonging to the enterprise;

(b) the maintenance of a stock of goods or merchandise belonging to the enterprise solely for the purpose of storage, display or delivery;

(c) the maintenance of a stock of goods or merchandise belonging to the enterprise solely for the purpose of processing by another enterprise;

(d) the maintenance of a fixed place of business solely for the purpose of purchasing goods or merchandise, or for collecting information, for the enterprise;

(e) the maintenance of a fixed place of business solely for the purpose of advertising, for the supply of information, for scientific research or for similar activities which have a preparatory or auxiliary character, for the enterprise;

(iii) A person acting in one of the territories on behalf of an enterprise of the other territory--other than an agent of an independent status to whom subparagraph (iv) applies--shall be deemed to be a permanent establishment in the first-mentioned territory if he has, and habitually exercises in that territory, an authority to conclude contracts in the name of the enterprise, unless his activities are limited to the purchase of goods or merchandise for the enterprise.

(iv) An enterprise of one of the territories shall not be deemed to have a permanent establishment in the other territory merely because it carries on business in that other territory through a broker, general commission agent or any other agent of an independent status, where such persons are acting in the ordinary course of their business.

(v) The fact that a company which is a resident of one of the territories controls or is controlled by a company which is a resident of the other territory, or which carries on business in that other territory (whether through a permanent establishment or otherwise) shall not of itself constitute either company a permanent establishment of the other.

(j) As used in this Agreement, the term "competent authorities" means, in the case of Sweden, the Minister of Finance or his authorised representative, and, in the case of Ireland, the Revenue Commissioners.

(2) Where under this Agreement any income is exempt from tax in one of the territories and that income is subject to tax in the other territory by reference to the amount thereof which is remitted to or received in that other territory, the exemption to be allowed under this Agreement in the first-mentioned territory shall apply only to the amount so remitted or received.

(3) In the application of the provisions of the present Agreement 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 in force in the territory of that Party relating to the taxes which are the subject of the present Agreement.

Article III.

(1) The industrial or,commercial profits of a Swedish enterprise shall not be subject to Irish tax unless the enterprise carries on a trade or business in Ireland through a permanent establishment situated therein. If it carries on a trade or business as aforesaid, tax may be imposed on those profits by Ireland, but only on so much of them as is attributable to that permanent establishment.

(2) The industrial or commercial profits of an Irish enterprise shall not be subject to Swedish tax unless the enterprise carries on a trade or business in Sweden through a permanent establishment situated therein. If it carries on a trade or business as aforesaid, tax may be imposed on those profits by Sweden, but only on so much of them as is attributable to that permanent establishment.

(3) Where an enterprise of one of the territories carries on a trade or business in the other territory through a permanent establishment situated therein, there shall be attributed to that permanent establishment the industrial or commercial profits which it might be expected to derive in that other territory 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.

(4) No portion of any profits arising to an enterprise of one of the territories shall be attributed to a permanent establishment situated in the other territory by reason of the mere purchase of goods or merchandise within that other territory by the enterprise.

Article IV.

Where

(a) an enterprise of one of the territories participates directly or indirectly in the management, control or capital of an enterprise of the other territory, or

(b) the same persons participate directly or indirectly in the management, control or capital of an enterprise of one of the territories and an enterprise of the other territory,

and in either case, conditions are made or imposed between the two enterprises, in their commercial or financial relations, which differ from those which would be made between independent enterprises, then any profits which would but for these conditions 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.

Income from the operation of ships or aircraft in international traffic shall be taxable only in the territory of the Contracting Party in which the place of effective management of the enterprise is situated.

Article VI.

(1) (a) Dividends paid by a company which is a resident of Ireland to a resident of Sweden shall be exempt from Irish sur-tax, unless the recipient has a permanent establishment in Ireland and the dividends are directly associated with the business carried on through such permanent establishment.

(b) Dividends paid by a company which is a resident of Sweden to a resident of Ireland shall be exempt from Swedish tax, unless the recipient has a permanent establishment in Sweden and the dividends are directly associated with the business carried on through such permanent establishment.

(2) Dividends paid by a company which is a resident of Ireland to a company which is a resident of Sweden shall be exempt from Swedish tax. This exemption shall not apply unless in accordance with the laws of Sweden the dividends would have been exempt from Swedish tax if the first-mentioned company had been a resident of Sweden and not a resident of Ireland.

(3) Where a company which is a resident of one of the territories derives profits or income from sources within the other territory, there shall not be imposed in that other territory any form of taxation on dividends paid by the company to persons not resident in that other territory, or any tax in the nature of undistributed profits tax on undistributed profits of the company, whether or not those dividends or undistributed profits represent, in whole or in part, profits or income so derived.

Article VII.

(1) Any interest derived from sources within one of the territories by a resident of the other territory shall be exempt from tax in that first-mentioned territory, unless the recipient has a permanent establishment in that first-mentioned territory and the interest is directly associated with the business carried on through such permanent establishment.

(2) In this Article, the term "interest" includes interest on bonds, securities, notes, debentures or any other form of indebtedness.

(3) Where any interest exceeds a fair and reasonable consideration in respect of the indebtedness for which it is paid, the exemption provided for by the present Article shall apply only to so much of the interest as represents such fair and reasonable consideration.

Article VIII.

(1) Any royalty derived from sources within one of the territories by a resident of the other territory shall be exempt from tax in that first-mentioned territory, unless the recipient has a permanent establishment in that first-mentioned territory and the royalty is directly associated with the business carried on through such permanent establishment.

(2) In this Article, the term "royalty" means any royalty or other amount paid as consideration for the use of, or for the privilege of using, any copyright, patent, design, secret process or formula, trade-mark, or other like property, but does not include any royalty or other amount paid in respect of the operation of a mine or quarry or of any other extraction of natural resources or in respect of cinematograph including television films.

(3) Where any royalty exceeds a fair and reasonable consideration in respect of the rights for which it is paid, the exemption provided for by the present Article shall apply only to so much of the royalty as represents such fair and reasonable consideration.

(4) Any capital sum derived from sources within one of the territories from the sale of patent rights by a resident of the other territory, shall be exempt from tax in that first-mentioned territory, unless the recipient has a permanent establishment in that first-mentioned territory and the capital sum is directly associated with the business carried on through such permanent establishment.

Article IX.

(1) Income from immovable property may be taxed in the territory of the Contracting Party in which such property is situated.

(2) The term "immovable property" shall be defined in accordance with the laws of the Contracting Party in the territory of which the property in question is situated. The term shall in any case include property accessory to immovable property, livestock and equipment of agricultural and forestry enterprises, rights to which the provisions of general law respecting landed property apply, usufruct of immovable property and rights to variable or fixed payments as consideration for the working of mineral deposits, sources and other natural resources; ships, boats and aircraft shall not be regarded as immovable property.

(3) The provisions of paragraphs (1) and (2) above shall apply to income derived from the direct use or from the letting of immovable property or the use in any other form of such property, including income from agricultural or forestry enterprises. They shall likewise apply to profits from the alienation of immovable property.

(4) The provisions of paragraphs (1) to (3) above shall also apply to the income from immovable property of any enterprises other than agricultural or forestry enterprises and to income from immovable property used for the performance of professional services.

Article X.

(1) Where under the provisions of this Agreement a resident of Ireland is exempt or entitled to relief from Swedish tax, similar exemption or relief shall be applied to the undivided estates of deceased persons in so far as one or more of the beneficiaries is a resident of Ireland.

(2) Swedish tax on the undivided estate of a deceased person shall, in so far as the income accrues to a beneficiary who is resident in Ireland, be allowed as a credit under Article XXIII.

Article XI.

Notwithstanding anything contained in Article IX, a resident of one of the territories shall be exempt in the other territory from any tax on gains from the sale, transfer, or exchange of capital assets, unless he has a permanent establishment in that other territory and the gains are directly associated with the business carried on through such permanent establishment.

Article XII.

Income derived by a resident of one of the territories in respect of professional services or other independent activities of a similar character shall be taxable only in that territory unless he has a fixed base regularly available to him in the other territory for the purpose of performing his activities. If he has such a fixed base, such part of that income as is attributable to that base may be taxed in that other territory.

Article XIII.

(1) Subject to the provisions of Articles XIV, XV, and XIX, salaries, wages and other similar remuneration derived by a resident of one of the territories in respect of an employment shall be taxable only in that territory unless the employment is exercised in the other territory. If the employment is so exercised, such remuneration as is derived therefrom may be taxed in that other territory.

(2) Notwithstanding the provisions of paragraph (1) above, remuneration derived by a resident of one of the territories in respect of an employment exercised in the other territory shall be taxable only in the first-mentioned territory if:

(a) the recipient is present in the other territory for a period or periods not exceeding in the aggregate 183 days in the fiscal year concerned, and

(b) the remuneration is paid by or on behalf of an employer who is not a resident of the other territory, and

(c) the remuneration is not deducted from the profits of a permanent establishment or a fixed base which the employer has in the other territory.

(3) Notwithstanding the preceding provisions of this Article remuneration for personal services performed aboard a ship or aircraft in international traffic may be taxed in the territory of the Contracting Party in which the place of effective management of the enterprise is situated.

Article XIV.

(1) Remuneration or pensions paid by one of the Contracting Parties to any individual in respect of services rendered to that Party in the discharge of governmental functions shall be exempt from tax in the territory of the other Contracting Party, unless the individual is a national of that other Party without being also a national of the first-mentioned Party.

(2) The provisions of Articles XIII and XVI shall apply to remuneration and pensions in respect of services rendered in connection with any trade or business carried on by one of the Contracting Parties.

Article XV.

Directors' fees and similar payments derived by a resident of one of the territories in his capacity as a member of the board of directors of a company which is a resident of the other territory may be taxed in that other territory.

Article XVI.

Subject to the provisions of paragraph (1) of Article XIV pensions and other similar payments received in consideration of past employment shall be taxable only in the territory of the Contracting Party of which the recipient is a resident.

Article XVII.

Notwithstanding anything contained in this Agreement, income derived by public entertainers, such as theatre, motion picture, radio or television artistes, and musicians, and by athletes, from their personal activities as such may be taxed in the territory of the Contracting Party in which these activities are exercised.

Article XVIII.

(1) Any annuity, derived from sources within Sweden by an individual who is a resident of Ireland, shall be exempt from Swedish tax.

(2) Any annuity, derived from sources within Ireland by an individual who is a resident of Sweden, shall be exempt from Irish tax.

(3) The term "annuity" means a stated sum payable, under an obligation, periodically at stated times during life or during a specified or ascertainable period of time.

Article XIX.

An individual from one of the territories who receives remuneration for carrying out advanced study or research or for teaching, during a period of temporary residence not exceeding two years, at a recognised research institute, university, college, or other establishment for higher education in the other territory, shall be exempt from tax in that other territory in respect of such remuneration.

Article XX.

Payments which a student or business apprentice from one of the territories who is present in the other territory solely for the purpose of his education or training receives for the purpose of his maintenance, education, or training, shall not be taxed in that other territory, provided that such payments are made to him from sources outside that other territory.

Article XXI.

Where taxes on capital are imposed by one or other or both of the Contracting Parties the following provisions shall apply:

(a) Capital represented by immovable property, as defined in paragraph (2) of Article IX, may be taxed in the territory of the Contracting Party in which such property is situated.

(b) Subject to the provisions of paragraph (a) above, capital represented by assets forming part of the business property employed in a permanent establishment of an enterprise, or by assets pertaining to a fixed base used for the performance of professional services, may be taxed in the territory of the Contracting Party in which the permanent establishment or fixed base is situated.

(c) Ships and aircraft operated in international traffic and assets, other than immovable property, pertaining to the operation of such ships and aircraft, shall be taxable only in the territory of the Contracting Party in which the place of effective management of the enterprise is situated.

(d) All other elements of capital of a resident of one of the territories shall be taxable only in that territory.

Article XXII.

(1) Individuals who are residents of Sweden shall be entitled to the same personal allowances, reliefs and reductions for the purposes of Irish tax as Irish citizens not resident in Ireland.

(2) Individuals who are residents of Ireland shall be entitled to the same personal allowances, reliefs and reductions for the purposes of Swedish tax as those to which Swedish nationals not resident in Sweden may be entitled.

Article XXIII.

(1) Subject to the provisions of the law of Ireland regarding the allowance as a credit against Irish tax of tax payable in a territory outside Ireland, Swedish tax (exclusive of the communal income tax) payable under the laws of Sweden and in accordance with this Agreement, whether directly or by deduction, in respect of income from sources within Sweden 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 company which is a resident of Sweden the credit shall take into account the Swedish tax payable by the company 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, the Swedish tax so payable by the company shall likewise be taken into account in so far as the dividend exceeds that fixed rate.

(2) Income from sources within Ireland shall be exempt from Swedish tax:

(a) If the income in accordance with this Agreement may be taxed in Ireland either directly or by deduction:

Provided that where such income is a dividend paid by a company being a resident of Ireland to a person resident in Sweden, not being a company which is exempt from Swedish tax according to the provisions of paragraph (2) of Article VI, whether or not such person is also resident in Ireland, Swedish tax shall be charged on such a sum as would after deduction of the Irish income tax at the appropriate rate correspond to the amount received, but that amount of Irish income tax appropriate to such dividend shall be allowed as a credit against any Swedish tax payable in respect of that income:

Provided further that when the Irish income tax appropriate to the dividend has been wholly relieved or reduced for a limited period of time, the credit against Swedish tax shall be allowed in an amount equal to the Irish income tax which would have been appropriate to the dividend if no such relief had been given or no such reduction had been allowed;

(b) If the income is not specifically mentioned in this Agreement but is subject to tax in Ireland under the laws of Ireland either directly or by deduction.

(3) For the purposes 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 tax.

(4) If, in accordance with Article XXI, capital belonging to a person resident in Sweden, whether or not such person is also resident in Ireland, may be taxed in Ireland, such capital shall be exempt from Swedish tax.

(5) The graduated rate of Swedish tax to be imposed on residents of Sweden may be calculated as though income or capital exempted under this Agreement were included in the amount of the total income or capital.

Article XXIV.

The competent authorities of the Contracting Parties shall exchange such information (being information which is at their disposal under their respective taxation laws in the normal course of administration) as is necessary for carrying out the provisions of the present Agreement or for the prevention of fraud or for the administration of statutory provision against legal avoidance in relation to the taxes which are the subject of the present Agreement. Any information so exchanged shall be treated as secret and shall not be disclosed to any persons other than those concerned with the assessment and collection of the taxes which are the subject of the present Agreement. No information as aforesaid shall be exchanged which would disclose any trade, business, industrial or professional secret or trade process.

Article XXV.

(1) Any taxpayer who shows that the action of the taxation authorities of the Contracting Parties has resulted or will result in taxation which is contrary to the provisions of this Agreement, may lodge a claim with the competent authority of the territory in which he resides. Should the claim be upheld, that competent authority may come to an agreement with the competent authority of the other Contracting Party with a view to the avoidance of such taxation.

(2) The competent authorities of the Contracting Parties may likewise come to an agreement for the purpose of overcoming double taxation in cases not otherwise provided for by this Agreement, as well as in cases where the interpretation or the application of this Agreement gives rise to difficulties or doubts.

Article XXVI.

(1) The nationals of one of the Contracting Parties shall not be subjected in the territory of the other Contracting party to any taxation or any requirement connected therewith which is other or more burdensome than the taxation and connected requirements to which the nationals of the latter Party in the same circumstances are or may be subjected.

(2) The term "nationals" means--

(a) In relation to Sweden, all Swedish subjects and all legal persons, partnerships and associations deriving their status as such from the law in force in Sweden;

(b) in relation to Ireland, all citizens of Ireland and all legal persons, partnerships and associations deriving their status as such from the law in force in Ireland.

(3) The taxation on a permanent establishment which an enterprise of one of the territories has in the other territory shall not be less favourably levied in that other territory than the taxation levied on enterprises of that other territory carrying on the same activities.

This provision shall not be construed as obliging one of the Contracting Parties to grant to residents of the other Contracting Party any personal allowances, reliefs and reductions for taxation purposes on account of civil status or family responsibilities which it grants to its own residents, nor as obliging Ireland to grant to residents of Sweden any relief or exemption allowed in accordance with the provisions of the Finance (Profits of Certain Mines) (Temporary Relief from Taxation) Act, 1956 (No. 8 of 1956) or of Part II of the Finance (Miscellaneous Provisions) Act, 1956 (No. 47 of 1956).

(4) Enterprises of one of the territories, the capital of which is wholly or partly owned or controlled, directly or indirectly, by one or more residents of the other territory, shall not be subjected in the first-mentioned territory to any taxation or any requirement connected therewith which is other or more burdensome than the taxation and connected requirements to which other similar enterprises of that first-mentioned territory are or may be subjected.

(5) In this Article the term "taxation" means the taxes which are the subject of the present Agreement.

Article XXVII.

The agreement, dated the 18th October, 1954, between the Government of Ireland and the Royal Swedish Government for the avoidance of double taxation on income derived from the business of sea and air transport shall not have effect for any period for which the present Agreement has effect.

Article XXVIII.

(1) The present Agreement shall be ratified by the Contracting Parties in accordance with their respective constitutional and legal requirements.

(2) The instruments of ratification shall be exchanged at Stockholm as soon as possible.

(3) Upon exchange of ratifications the present Agreement shall have effect--

(a) In Sweden:

(i) in respect of the State income tax and the communal income tax on income which is assessed in or after the calendar year beginning on 1st January, 1960, being income for which preliminary tax is payable during the period 1st March, 1959, to 29th February, 1960, or any succeeding period;

(ii) in respect of coupon tax on dividends payable on or after 1st January, 1959;

(iii) in respect of the tax on public entertainers which is levied on or after 1st January, 1959;

(iv) in respect of sailors tax on income payable on or after 1st January in the calendar year next following that in which the exchange of ratifications takes place; and

(v) in respect of the State capital tax which is assessed in or after the calendar year beginning on 1st January, 1960.

(b) In Ireland:

(i) in respect of Irish income tax for the year of assessment beginning on the 6th day of April, 1960 and subsequent years;

(ii) in respect of Irish sur-tax for the year of assessment beginning on the 6th day of April, 1959 and subsequent years; and

(iii) in respect of Irish corporation profits tax for any chargeable accounting period beginning on or after the 1st day of April, 1960 and for the unexpired portion of any chargeable accounting period current at that date.

Article XXIX.

The present Agreement shall continue in effect indefinitely but either of the Contracting Parties may, on or before 30th June in any calendar year not earlier than the year 1964, give to the other Contracting Party, through diplomatic channels, written notice of termination and, in such event, the present Agreement shall cease to be effective--

(a) In Sweden:

(i) in respect of the State income tax and the communal income tax on income for which preliminary tax is payable after the last day of February in the calendar year next following that in which such notice is given;

(ii) in respect of coupon tax on dividends payable on or after 1st January in the calendar year next following that in which such notice is given;

(iii) in respect of the tax on public entertainers which is levied on or after 1st January in the calendar year next following that in which such notice is given;

(iv) in respect of sailors tax on income payable on or after 1st January in the calendar year next following that in which such notice is given; and

(v) in respect of the State capital tax assessed in or after the second calendar year following that in which such notice is given.

(b) In Ireland:

(i) in respect of 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) in respect of Irish sur-tax 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) in respect of Irish corporation profits tax for any chargeable accounting period beginning on or after the 1st 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.

In witness whereof the undersigned being duly authorised thereto have signed the present Agreement and have affixed thereto their seals.

Done at Dublin, this 6th day of November, 1959, in duplicate in the English language.

GIVEN under the Official Seal of the Government, this 30th day of August, 1960.

SEÁN F. LEMASS,

Taoiseach,

EXPLANATORY NOTE.

Under the Agreement with Sweden which is scheduled to this Order, certain classes of income derived from one country by a resident of the other country are (subject to certain conditions) exempt from tax in the former country; these classes are shipping and air transport profits, certain trading profits not arising through a "permanent establishment", profits from professional activities not arising through a "fixed base", patent and copyright royalties, interest, pensions, annuities and earnings of temporary business visitors. Government salaries and pensions are normally taxed by the paying Government only. Remuneration of visiting professors, university teachers and research workers is exempt in the country visited.

As regards dividends, the Agreement provides that dividends received from Swedish companies by a resident of Ireland (whether an individual or a company) shall be exempt from Swedish tax unless the recipient has a "permanent establishment" in Sweden and the dividends are directly associated with the business carried on through such "permanent establishment". Subject to a similar condition dividends received from Ireland by individuals who are residents of Sweden are exempted from Irish sur-tax. Dividends received from Ireland by companies which are residents of Sweden are (with certain exceptions) exempt from Swedish tax.

Where income continues to be taxable in both countries, relief from double taxation is given by the country of the taxpayer's residence. In Sweden, except in the case of Irish dividends received by an individual, the relief is given by way of exemption but the exempted income is taken into account for the purpose of determining the rate of Swedish tax to be imposed on other income. In the case of Irish dividends received by an individual the Irish income tax deducted therefrom is allowable as a credit against the Swedish tax chargeable on those dividends. In Ireland the relief is given by allowing against the Irish tax payable on Swedish income a credit in respect of the Swedish tax payable on that income.

Profits (and dividends paid thereout) which are wholly or partially relieved from Irish tax by reason of the allowance of a tax incentive (e.g., "export" relief) will qualify for the exemption or relief from Swedish tax which would have been allowable if the Irish tax wholly or partially relieved had, in fact, been charged and paid.

Capital situated in Sweden (with certain exceptions, e.g. capital represented by immovable property) of a resident of Ireland is exempt from the (Swedish) State capital tax.

Provision is made for the exchange of information between the competent authorities of the two countries.

The Agreement takes effect for the fiscal year 1960/61.