STATUTORY INSTRUMENTS.

S.I. No. 40 of 2004 .

DOUBLE TAXATION RELIEF (TAXES ON INCOME) (ADJUSTMENT OF PROFITS OF ASSOCIATED ENTERPRISES) (EUROPEAN COMMUNITIES) ORDER 2004.

S.I. No. 40 of 2004 .

DOUBLE TAXATION RELIEF (TAXES ON INCOME) (ADJUSTMENT OF PROFITS OF ASSOCIATED ENTERPRISES) (EUROPEAN COMMUNITIES) ORDER 2004.

WHEREAS it is enacted by section 826(1) of the Taxes Consolidation Act 1997 (No. 39 of 1997), 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, corporation tax in respect of income and chargeable gains 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, then, subject to sections 826 and 835 of that Act, the arrangements shall, notwithstanding any enactment, have the force of law:

AND WHEREAS it is further enacted by section 826(6) of the above mentioned 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 the following Order has been laid before Dáil Éireann and a resolution approving of the draft has been passed by Dáil Éireann:

NOW, the Government, in exercise of the powers conferred on them by section 826(1) of the Taxes Consolidation Act 1997 (No. 39 of 1997), hereby order as follows:

1.  This Order may be cited as the Double Taxation Relief (Taxes on Income) (Adjustment of Profits of Associated Enterprises) (European Communities) Order 2004.

2.  It is hereby declared--

(a)  that the arrangements specified in the Protocol set out in the Schedule to this Order have been made with the Governments of the Member States of the European Communities in relation to affording relief from double taxation in respect of income tax or corporation tax and any taxes of a similar character, imposed by the laws of the State or by the laws of the other Member States of the European Communities, and

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

SCHEDULE

PROTOCOL

amending the Convention of 23 July 1990 on the elimination of double taxation in connection with the adjustment of profits of associated enterprises

(1999/C 202/01)

THE HIGH CONTRACTING PARTIES TO THE TREATY ESTABLISHING THE EUROPEAN COMMUNITY,

DESIRING to give effect to Article 293 of the Treaty establishing the European Community, by virtue of which they have undertaken to enter into negotiations with each other with a view to securing for the benefit of their nationals the elimination of double taxation,

HAVING REGARD to the Convention of 23 July 1990 on the elimination of double taxation in connection with the adjustment of profits of associated enterprises (hereinafter ‘Arbitration Convention’),

HAVING REGARD to the Convention of 21 December 1995 on the accession of the Republic of Austria, the Republic of Finland and the Kingdom of Sweden to the Convention on the elimination of double taxation in connection with the adjustment of profits of associated enterprises,

WHEREAS the Arbitration Convention entered into force on 1 January 1995, pursuant to Article 18 thereof; whereas it will expire on 31 December 1999 unless it is extended,

HAVE DECIDED to conclude this Protocol amending the Arbitration Convention, and to this end have designated as their Plenipotentiaries:

THE KINGDOM OF BELGIUM:

Mr Jean-Jacques VISEUR

Minister for Finance;

THE KINGDOM OF DENMARK:

Ms Marianne JELVED

Minister for Economic Affairs and Nordic Co-operation;

THE FEDERAL REPUBLIC OF GERMANY:

Mr Hans EICHEL

Federal Minister for Finance;

THE HELLENIC REPUBLIC:

Mr Yannos PAPANTONIOU

Minister for Economic Affairs;

THE KINGDOM OF SPAIN:

Mr Cristóbal Ricardo MONTORO MORENO

State Secretary for Economic Affairs;

THE FRENCH REPUBLIC:

Mr Dominique STRAUSS-KAHN

Minister for Economic Affairs, Finance and Industry;

IRELAND:

Mr Charlie McCREEVY

Minister for Finance;

THE ITALIAN REPUBLIC:

Mr Vincenzo VISCO

Minister for Finance;

THE GRAND DUCHY OF LUXEMBOURG:

Mr Jean-Claude JUNCKER

Prime Minister, Ministre d’Etat, Minister for Finance, Minister for Labour and Employment;

THE KINGDOM OF THE NETHERLANDS:

Mr Wilhelmus Adrianus Franciscus Gabriël Franciscus (Willem) VERMEEND

State Secretary for Finance;

THE REPUBLIC OF AUSTRIA:

Mr Rudolf EDLINGER

Federal Minister for Finance;

THE PORTUGUESE REPUBLIC:

Mr António Luciano Pacheco DE SOUSA FRANCO

Minister for Finance;

THE REPUBLIC OF FINLAND:

Mr Sauli NIINISTÖ

Deputy Prime Minister and Minister for Finance;

THE KINGDOM OF SWEDEN:

Mr Bosse RINGHOLM

Minister for Finance;

THE UNITED KINGDOM OF GREAT BRITAIN AND NORTHERN IRELAND:

Sir Stephen WALL, K.C.M.G., L.V.O.

Ambassador, permanent Representative of the United Kingdom of Great Britain and Northern Ireland to the European Union;

WHO, meeting within the Council and having exchanged their Full Powers, found in good and due form,

HAVE AGREED AS FOLLOWS:

ARTICLE 1

The Convention of 23 July 1990 on the elimination of double taxation in connection with the adjustment of profits of associated enterprises is hereby amended as follows:

Article 20 shall read as follows:

‘Article 20

This Convention is concluded for a period of five years. It shall be extended for further periods of five years at a time, unless a Contracting State informs the Secretary-General of the Council of the European Union of its objection thereto in writing at least six months before the expiry of any five-year period.’

ARTICLE 2

1.  This Protocol shall be subject to ratification, acceptance or approval by the Signatory States. The instruments of ratification, acceptance or approval shall be deposited with the Secretary-General of the Council of the European Union.

2.  The Secretary-General of the Council of the European Union shall notify the Signatory States of:

(a)  the deposit of each instrument of ratification, acceptance or approval;

(b)  the date on which this Protocol will enter into force.

ARTICLE 3

1.  This Protocol shall enter into force on the first day of the third month following the deposit of the instrument of ratification, acceptance or approval by the last Signatory State to take this step.

2.  This Protocol shall take effect as from 1 January 2000.

3.  The period beginning on 1 January 2000 and ending on the date of entry into force of this Protocol shall not be taken into account in determining whether a case has been presented within the time specificed in Article 6(1) of the Arbitration Convention.

ARTICLE 4

This Protocol, drawn up in a single original in the Danish, Dutch, English, Finnish, French, German, Greek, Irish, Italian, Portuguese, Spanish and Swedish languages, all twelve texts being equally authentic, shall be deposited in the archives of the General Secretariat of the Council of the European Union. The Secretary-General shall transmit a certified copy to the Government of each Signatory State.

En fe de lo cual, los Plenipotenciarios reunidos en el seno del Consejo suscriben el presente Protocolo.

Til bekræftelse heraf har undertegnede befuldmægtigede underskrevet denne protokol.

Zu urkund dessen haben die unterzeichneten Bevollmächtigten ihre Unterschriften unter dieses Protokoll gesetzt.

Σε πίστωση των ανωτερω oι υπoγεγραμμενoι πληρεξoυσoι υπεγραψαν τo παρòυ πρωτòκoλλo.

In witness whereof the undersigned Plenipotentiaries have signed this Protocol.

En foi de quoi, les plénipotentiares réunis au sein du Conseil ont apposé leur signature au bas du présent protocole.

Dá fhianú sin, chuir na Lánchumhachtaigh thíos-sínithe a lámh leis an bPrótacal seo.

In fede di che, i plenipotenziari sottoscritti hanno apposto le loro firme in calce al presente protocollo.

Ten blijke waarvan de gevolmachtigden, in het kader van de Raad bijeen, hun handtekening onder dit protocol hebben gesteld.

Em fé do que os plenipotenciários apuseram as suas assinaturas, no final do presente protocolo.

Tämän vakuudeksi täysivaltaiset edustajat ovat allekirjoittaneet tämän pöytäkirjan.

Till bevis härpå har de befullmäktigade, församlade i rådet, undertecknat detta protokoll.

Hecho en Bruselas, el veinticinco de mayo de mil novecientos noventa y nueve.

Udfærdiget i Bruxelles den femogtyvende maj nitten hundrede og nioghalvfems.

Geschehen zu Brüssel am fünfundzwansigsten Mai neunzehnhundertneunundneunzig.

Eγινε oπζ Bρυξελλεζ, την εικooπη πεμπη Mαϊoυ τoυ ετoυζ χιλια εννιακoσια ενενηντα ευυεα.

Done at Brussels, on the twenty-fifth day of May in the year one thousand nine hundred and ninety-nine.

Fait à Bruxelles, le vingt-cinq mai mil neuf cent quatre-vingtdix-neuf.

Arna dhéanamh sa Bhruiséil ar an gcúigiú lá is fiche de Bhealtaine sa bhliain míle naoi gcéad nócha a naoi.

Fatto a Bruxelles, il venticinque maggio millenovecentonovantanove.

Gedaan te Brussel, op vijfentwintig mei negentenhonderd negenennegentig.

Feito em Bruxelas, em vinte e cinco de Maio de mil novecentos e noventa e nove.

Tehty Brysselissä Kahdentenakymmenentenäviidentenä päivänä toukokuuta vuonna tuhatyhdeksänsataayhdeksänkymmentäyhdeksän.

Utfärdat i Bryssel den tjugofemte maj nittonhundranittionio.

Pour le Royaume de Belgique

Voor het Koninkrijk België

Für das Königreich Belgien

Mr Jean-Jacques VISEUR

På Kongeriget Danmarks vegne

Ms Marianne JELVED

Für die Bundesrepublik Deutschland

Mr Hans EICHEL

Για την Eλληνικη Δημoκρατία

Mr Yannos PAPANTONIOU

Por el Reino de España

Mr Cristóbal Ricardo MONTORO MORENO

Pour la République française

Mr Dominique STRAUSS-KAHN

Thar ceann na hÉireann

For Ireland

Mr Charlie McCREEVY

Per la Repubblica italiana

Mr Vincenzo VISCO

Pour le Grand-Duché de Luxembourg

Mr Jean-Claude JUNCKER

Voor het Koninkrijk der Nederlanden

Mr Wilhelmus Adrianus Franciscus Gabriël (Willem) VERMEEND

Für die Republik Österreich

Mr Rudolf EDLINGER

Pela República Portuguesa

Mr António Luciano Pacheco DE SOUSA FRANCO

Suomen tasavallan puolesta

För Republiken Finland

Mr Sauli NIINISTÖ

För Konungariket Sverige

Mr Bosse RINGHOLM

For the United Kingdom of Great Britain and Northern Ireland

Sir Stephen WALL

FINAL ACT

of the Conference of the Representatives of the Governments of the Member States meeting within the Council on 25 May 1999

THE REPRESENTATIVES OF THE GOVERNMENTS OF THE MEMBER STATES,

MEETING WITHIN The Council on 25 May 1999,

RECALLING THE CONCLUSIONS of 19 May 1998 on the extension of the Convention on the elimination of double taxation in connection with the adjustment of profits of associated enterprises (the ‘Arbitration Convention’), in which they agreed that the Arbitration Convention should be extended for a further period of five years from the date of its expiry and that after the end of that period it should it should automatically be extended for further periods of five years at a time, provided that no Contracting State objected:

HAVE AGREED on the need to extend the Arbitration Convention for a further period of five years from 1 January 2000;

HAVE PROCEEDED to sign the Protocol amending the Convention of 23 July 1990 on the elimination of double taxation in connection with the adjustment of profits of associated enterprises.

Hecho en Bruselas, el veinticinco de mayo de mil novecientos noventa y nueve.

Udfærdiget i Bruxelles den femogtyvende maj nitten hundrede og nioghalvfems.

Geschehen zu Brüssel am fünfundzwanzigsten Mai neunzehnhundertneunundneunzig.

‘Eγινε σηζ Bρυξέλλεζ, την εικoστή πέμπτη Mαϊoυ τoυ έτoυξ χίλιά ευυιακoσια ενενήντα εννέα.

Done at Brussels, on the twenty-fifth day of May in the year one thousand nine hundred and ninety-nine.

Fait à Bruxelles, le vingt-cinq mai mil neuf cent quatre-vingtdix-neuf.

Arna dhéanamh sa Bhruiséil ar an gcúigiú lá is fiche de Bhealtaine sa bhliain míle naoi gcéad nócha a naoi.

Fatto a Bruxelles, il venticinque maggio millenovecentonovantanove.

Gedaan te Brussel, op vijfentwintig mei negentienhonderd negenennegentig.

Feito em Bruxelas, em vinte e cinco de Maio de mil novecentos e noventa e nove.

Tehty Brysselissä kahdentenakymmenentenäviidentenä päivänä toukokuuta vuonna tuhatyhdeksänsataayhdeksänkymmentäyhdeksän.

Utfärdat i Bryssel den tjugofemte maj nittonhundranittionio.

Pour le Royaume de Belgique.

Voor het Koninkrijk België

Für das Königreich Belgien

Mr Jean-Jacques VISEUR

På Kongeriget Danmarks vegne

Ms Marianne JELVED

Für die Bundesrepublik Deutschland

Mr Hans EICHEL

Για την Eλληνικη Δημoκρατία

Mr Yannos PAPANTONIOU

Por el Reino de España

Mr Cristóbal Ricardo MONTORO MORENO

Pour la République française

Mr Dominique STRAUSS-KAHN

Thar ceann na hÉireann

For Ireland

Mr Charlie McCreevy

Per la Repubblica italiana

Mr Vincenzo VISCO

Pour le Grand-Duché de Luxembourg

Mr Jean-Claude JUNCKER

Voor het Koninkrijk der Nederlanden

Mr Wilhelmus Adrianus Franciscus Gabriël (Willem) VERMEEND

Für die Republik Österreich

Mr Rudolf EDLINGER

Pela República Portuguesa

Mr António Luciano Pacheco DE SOUSA FRANCO

Suomen tasavallan puolesta

För Republiken Finland

Mr Sauli NIINISTÖ

För Konungariket Sverige

Mr Bosse RINGHOLM

For the United Kingdom of Great Britain and Northern Ireland

Sir Stephen WALL

EXPLANATORY NOTE.

(This note is not part of the Instrument and does not purport to be a legal interpretation.)

This Order gives the force of law in Ireland to the Protocol which amends the Convention between the member states of the European Communities on the elimination of double taxation in connection with the adjustment of profits of associated enterprises. The original Convention, which is contained in S.I. No. 88 of 1994 , would have lapsed on 31 December 1999 in the absence of the Protocol to extend it.

The original Convention provides for a mutual agreement procedure between tax authorities where double taxation has occurred. Where this procedure fails to resolve disputes, it provides for referral to an independent arbitration commission.

The double taxation referred to is that which might arise when tax authorities adjust for tax purposes the profits declared by enterprises where such profits result from transactions between associated enterprises in different Member States, and these transactions were at prices which differ from those which would normally apply between independent enterprises. The adjustment of profits may result in an increased tax bill for one of the enterprises and double taxation would occur when the tax authorities of the Member State in which the other enterprise is situated do not make a corresponding reduction in the taxable profits of that other enterprise.

The mutual agreement or arbitration procedure applies in such cases. The taxes which are within the scope of the original Convention are specified, and the tax authorities in the Member States are also identified in same. If a company considers that there is double taxation, it may present its case to its tax authority within three years of the event. If the tax authority considers the case to be well-founded and cannot resolve it, it is obliged to attempt to resolve it by mutual agreement with the tax authority of the other Member State. If agreement cannot be reached within two years the tax authorities are required to seek from the arbitration commission an opinion as to how the tax should be eliminated. If the two tax authorities do not agree on a resolution of the case within six months of receipt of the Commission’s opinion they are obliged to accept the opinion of the Commission. The Commission is empowered to request information from the undertakings and from the tax authorities. Safeguards with regard to confidentiality and secrecy are provided.

The Protocol provides that the original Convention will be extended automatically for further periods of 5 years at a time unless one of the Member States objects to this at least 6 months before the expiry of any five year period. The Protocol will enter into force from the first day of the third month following the deposit with the Secretary-General of the Council of the European Communities of the instrument of ratification, acceptance or approval by the last Signatory State to take this step. It will then take effect retrospectively from 1 January 2000 so as to provide continued relief from double taxation.