S.I. No. 212/1967 - Double Taxation Relief (Taxes on Income) (Government of Canada) Order, 1967.

1. This Agreement shall continue in effect indefinitely but either of the Contracting Governments may, on or before the 30th day of June in any calendar year after the year 1967, give notice of termination to the other Contracting Government and in such event this Agreement shall cease to be effective—

(

a

) in Ireland

(i) in respect of income tax (including sur-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; and

(ii) in respect of corporation profits tax for any accounting period beginning on or after the 1st day of January in the calendar year next following that in which such notice is given and for the unexpired portion of any accounting period current at that date;

(

b

) in Canada

(i) in respect of the income tax payable under Part III of the Income Tax Act on amounts paid or credited to non-residents on or after the 1st day of the calendar year next following that in which such notice is given; and

(ii) in respect of other Canadian tax for any taxation year ending in or after the calendar year next following that in which such notice is given.

2. The termination of this Agreement shall not have the effect of reviving any agreement or arrangement abrogated by this Agreement or by agreements previously concluded between the Contracting Governments.

IN WITNESS WHEREOF the plenipotentiaries of the two contracting Governments have signed the present Agreement and have affixed thereto their seals.

DONE at Ottawa this twenty-third day of November, Nineteen Hundred and Sixty-six in two copies in the Irish, English and French languages each version being equally authentic.

JOHN A. BELTON

MITCHELL W. SHARPE

FOR IRELAND.

FOR CANADA.

GIVEN under the Official Seal of the Government this 19th

day of Meán Fómhair, 1967.

SEÁN Ó LOINSIGH,

Taoiseach.

EXPLANATORY NOTE

This Order gives the force of law to the Agreement with Canada which is set out in the Schedule.

Under the Agreement certain classes of income derived from one country by a resident of the other country are (subject to certain condititions) to be exempt from tax in the former country. These classes are trading profits not arising through a "permanent establishment" [Article III], shipping and air transport profits [Article V], copyright royalties [Article VII], profits from professional or other independent activities not attributable to fixed base [Article X], pensions and purchased annuities [Article XI], and certain earnings of temporary residents [Articles X, XII and XIII]. Government salaries are normally to be taxed by the paying Government only [Article IX].

In general other classes of income (e.g. dividends, interest, patent royalties, etc.) derived from Ireland by Canadian residents are to be exempt from Irish sur-tax; the rate of Canadian withholding tax on such classes of income derived from Canada by Irish residents is not to exceed 15 per cent. Furthermore dividends received by an Irish company from a wholly owned Canadian subsidiary company which derives at least 95 per cent of its income from sources outside Canada and which owns no shares in other Canadian companies are to be exempt from Canadian witholding tax [Article VI].

Where, under the Convention, income derived from one country by a person resident in the other may be taken into account for tax purposes in both countries, a measure of double taxation relief is to be granted by the latter country. In Ireland, relief is to be given by allowing against the Irish tax payable on Canadian income, a credit in respect of the Canadian tax which the income has borne, including in the case of dividends (other than "fixed rate" dividends) an appropriate proportion of Canadian tax on the profits out of which the dividends are paid. In Canada relief is to be given by allowing against the Canadian tax payable on Irish income, a credit in respect of the Irish tax which the income has borne. In the case, however, of a company resident in Canada which owns more than 25 per cent of the voting power of a company resident in Ireland, Canada will exempt from Canadian tax dividends paid to the Canadian company by the latter company out of profits wholly relieved from Irish Tax by reason of the allowance of a tax incentive relief (e.g., "exports" relief). Where the profits out of which the dividends are paid are partially relieved from Irish tax the exemption will be confined to the appropriate proportion of the dividends [Article XIV].

Provision is made for the exchange of information between the competent authorities of the two countries [Article XV].

The Convention takes effect from the fiscal year next following the date of exchange of instruments of ratification [Article XVII].

3. The Agreement between the Government of Ireland and the Government of Canada for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income, signed at Ottawa on the 28th day of October, 1954, is hereby terminated and shall cease to be effective for any period for which this Agreement shall have effect in accordance with paragraph 2 of this Article.

ARTICLE XVIII

4. In this Article the term "taxation" means the taxes which are the subject of this Agreement.

ARTICLE XVII

5. Nothwithstanding 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 in which these activities are exercised.

ARTICLE XI

S.I. No. 212 of 1967.

DOUBLE TAXATION RELIEF (TAXES ON INCOME) (GOVERNMENT OF CANADA) ORDER, 1967.

WHEREAS it is enacted by

section 361

(1) of the

Income Tax Act, 1967

(No. 6 of 1967), 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 section 361(6) 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 Dail Eireann 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 361

of the

Income Tax Act, 1967

(No. 6 of 1967), hereby order as follows