S.I. No. 240/1967 - Double Taxation Relief (Taxes on Income and Capital) (Swiss Confederation) Order, 1967.

1. This Convention shall be ratified and the instruments of ratification shall be exchanged at Berne as soon as possible.

2. The Convention shall enter into force upon the exchange of instruments of ratification and its provisions shall have effect

(

a

) in Ireland

(1) as respects income tax (including sur-tax) for any year of assessment beginning on or after the 6th April, 1965;

(2) as respects corporation profits tax, for any accounting period beginning on or after the 1st April, 1965, and for the unexpired portion of any accounting period current at that date;

(

b

) in Switzerland

for any fiscal year beginning on or after the 1st January, 1965.

3. The Agreement dated 18th June, 1958, between the Government of Ireland and the Swiss Federal Council concerning the taxation of enterprises operating ships or aircraft shall be terminated upon the entry into force of this Convention.

ARTICLE 28

TERMINATION

This Convention shall remain in force indefinitely, but either of the Contracting States may denounce the Convention, through diplomatic channels, by giving notice of termination at least six months before the end of any calendar year after the year 1971. In such event the Convention shall cease to have effect

(

a

) in Ireland

(1) as respects income tax (including sur-tax) for any year of assessment beginning on or after the 6th April in the calendar year next following that in which such notice is given;

(2) as respects corporation profits tax for any accounting period beginning on or after the 1st April 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 Switzerland

for any fiscal year beginning on or after the 1st January in the calendar year next following that in which such notice is given.

In witness whereof the Plenipotentiaries of the two Contracting States, duly authorised thereto, have signed the present Convention and affixed thereto their seals.

Done in duplicate at Dublin the 8th November, 1966, in the French and English languages, each text being equally authentic.

For the Government of Ireland

PROINSIAS MAC AOGÁIN.

For the Swiss Federal Council

JULIEN ROSSAT.

Oifig an Aire Gnóthaí Eachtracha.

Office of the Minister for External Affairs,

Baile Átha Cliath, 2

Dublin, 2.

8th November, 1966.

Excellency,

With reference to the Convention signed to-day between Ireland and the Swiss Confederation for the avoidance of double taxation with respect to taxes on income and capital, I have the honour, on behalf of the Government of Ireland, to confirm that it is understood that both ordinary and extraordinary taxes on income and capital come within the scope of Article 2 of the said Convention.

Accept, Excellency, the renewed assurance of my highest consideration.

PROINSIAS MAC AOGÁIN.

His Excellency Julien Rossat,

Ambassador Extraordinary and

Plenipotentiary of Switzerland,

Swiss Embassy,

Dublin.

(A letter in similar terms has been addressed on behalf of the Swiss Federal Council to the Government of Ireland).

Given under the Official Seal of the Government this 14th day of November, 1967.

SEÁN Ó LOINSIGH,

Taoiseach.

EXPLANATORY NOTE

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

Under the Convention certain classes of income derived from one country by a resident of the other country are (subject to certain conditions) to be exempt from tax in the former country. These classes are trading profits not arising through a "permanent establishment" [Article 6], shipping and air transport profits [Article 7], interest [Article 10], patent and copyright royalties [Article 11], profits from professional or other independent activities not attributable to a fixed base [Article 13], pensions (other than Government pensions) [Article 17], and certain earnings of temporary residents [Articles 14 and 19]. Government and local authority salaries and pensions are normally to be taxed by the paying Government only [Article 18].

In general dividends paid by Irish companies to Swiss residents are to be exempt from Irish sur-tax; the rate of withholding tax on dividends paid by Swiss companies to Irish residents is not to exceed 10 per cent and, where the resident of Ireland is a company which holds at least 25 per cent of the capital of the Swiss company, the dividends are to be exempt from Swiss tax [Article 9].

Subject to certain exceptions (e.g., immovable property) property of an Irish resident situated in Switzerland is to be exempt from the annual taxes on capital imposed in that country [Article 21].

In the matter of personal allowances and reliefs for tax purposes, each country is to treat residents of the other in the same way as its own non-resident nationals [Article 23].

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 Swiss income, a credit in respect of the Swiss tax which the income has borne, including in the case of dividends received by an Irish company which controls 50 per cent or more of the voting power of the Swiss company paying the dividends, an appropriate proportion of the Swiss tax on the profits out of which the dividends are paid. In Switzerland, relief is to be given by exemption of Irish income (except dividends) or capital from Swiss taxes but in calculating the Swiss tax on the remaining income or capital Switzerland may apply the rate of tax which otherwise would have been applicable. In the case of Irish dividends relief from Swiss taxes is to be given by way of deduction, reduction or partial exemption as appropriate. Furthermore, a Swiss company is to be granted the same reliefs from Swiss taxes on Irish dividends which it would be entitled to in certain circumstances if the dividends had been Swiss dividends and not Irish dividends [Article 22].

As the reliefs from Swiss tax mentioned in the previous paragraph are allowable without regard to the amount of Irish tax paid on the relevant income, the circumstances that profits and dividends which are wholly or partially relieved from Irish tax by reason of the allowance of a tax incentive (e.g. "exports" relief) will not debar such profits or dividends from the benefits of the reliefs from Swiss tax.

Provision is made for consultation between the competent authorities of the two countries in order to carry out the provisions of the Convention generally or in specific cases [Article 25].

The convention takes effect for the fiscal year 1965-66 [Article 27].

4. The Convention shall not apply to International Organisations, to organs or officials thereof and to persons who are members of a diplomatic or consular mission of a third State, being present in a Contracting State and not treated in either Contracting State as residents in respect of taxes on income and capital.

CHAPTER VII

FINAL PROVISIONS

ARTICLE 27

ENTRY INTO FORCE

5. The provisions of this Article shall not be construed as obliging a Contracting State to grant to residents of the other Contracting State 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 nationals of Switzerland 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), as subsequently amended, or of Part II of the

Finance (Miscellaneous Provisions) Act, 1956

(No. 47 of 1956), as subsequently amended.

6. In this Article the term "taxation" means taxes of every kind and description.

ARTICLE 25

MUTUAL AGREEMENT PROCEDURE

7. Notwithstanding the provisions of paragraph 6, income derived from sources in the United Kingdom of Great Britain and Northern Ireland by an individual who is resident in Ireland shall be deemed to be income from sources in Ireland if such income is not subjected to United Kingdom income tax.

8. For the purposes of this Article, profits or remuneration arising from the exercise of a profession or employment in a Contracting State shall be deemed to be income from sources within that Contracting State, and the services of an individual whose services are wholly or mainly performed in ships or aircraft shall be deemed to be performed in the Contracting State in which the place of effective management of the enterprise is situated.

CHAPTER VI

SPECIAL PROVISIONS

ARTICLE 23

PERSONAL ALLOWANCES FOR NON-RESIDENTS

S.I. No. 240 of 1967.

DOUBLE TAXATION RELIEF (TAXES ON INCOME AND CAPITAL) (SWISS CONFEDERATION) 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 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 361

of the

Income Tax Act, 1967

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