S.I. No. 250/1967 - Double Taxation Relief (Taxes on Income) (Republic of Austria) Order, 1967.

1. This Convention shall be ratified and the instruments of ratification shall be exchanged at Dublin 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 Austria

for any taxable year beginning on or after the 1st January, 1964;

(

b

) in Ireland

(i) as respects income tax (including sur-tax) for any year of assessment beginning on or after the 6th April, 1964;

(ii) as respects corporation profits tax, for any accounting period beginning on or after the 1st April, 1964, and for the unexpired portion of any accounting period current at that date.

ARTICLE 27.

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. In such event the Convention shall cease to have effect

(

a

) in Austria

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

(

b

) in Ireland

(i) 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;

(ii) 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.

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 Vienna the 24th day of May, 1966, in the English and German languages, each text being equally authentic.

FOR IRELAND

FOR THE REPUBLIC OF AUSTRIA

SEÁN MORRISSEY

DR. JOSEF HAMMERSCHMIDT

GIVEN under the Official Seal of the Government this 23rd day of November, 1967.

SEÁN Ó LOINSIGH,

Taoiseach.

EXPLANATORY NOTE.

This Order gives the force of law to the Convention with Austria 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 5], shipping and air transport profits [Article 6], interest [Article 9], patent and copyright royalties [Article 10], profits from professional or other independent activities not attributable to a fixed base [Article 12], pensions (other than Government pensions] [Article 16], and certain earnings of temporary residents [Articles 13, 18 and 19]. Government salaries and pensions are normally to be taxed by the paying Government only [Article 17].

In general dividends paid by Irish companies to Austrian residents are to be exempt from Irish sur-tax; the rate of withholding tax on dividends paid by Austrian 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 Austrian company, the dividends are to be exempt from Austrian tax. Furthermore an Austrian company in receipt of Irish dividends is to be granted the same exemption from corporation tax on those dividends which it would be entitled to in certain circumstances if the dividends had been Austrian dividends and not Irish dividends [Article 8].

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 21].

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 Austrian income, a credit in respect of the Austrian tax which the income has borne including, in the case of dividends (other than "fixed rate" dividends), an appropriate proportion of the Austrian tax on the profits out of which the dividends are paid. In Austria relief is to be given by allowing against the total Austrian tax otherwise payable a deduction equal to the Irish tax on income from sources in Ireland or to the part of the Austrian tax which is appropriate to that income whichever is the less [Article 22].

Provision is made for the exchange of information between the competent authorities of the two countries [Article 25].

The Convention takes effect for the fiscal year 1964/65 [Article 26].

3. The competent authorities of the Contracting States shall endeavour to resolve by mutual agreement any difficulties or doubts arising as to the interpretation or application of the Convention. They may also consult together for the elimination of double taxation in cases not provided for in the Convention.

4. The competent authorities of the Contracting States may communicate with each other directly for the purpose of reaching an agreement in the sense of the preceding paragraphs. When it seems advisable in order to reach agreement to have an oral exchange of opinions, such an exchange may take place through a Commission consisting of representatives of the competent authorities of the Contracting States.

ARTICLE 25

5. For the purposes of this Article, profits or remuneration arising from the exercise of a profession or employment in one of the Contracting States 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 operated by a resident of a Contracting State shall be deemed to be performed in that Contracting State.

ARTICLE 23.

6. The term "dividends" as used in this Article means income from shares, "jouissanoe" shares or "jouissance" rights, mining shares, founders' shares or other rights, not being debt-claims, participating in profits, as well as income from other corporate rights assimilated to income from shares by the taxation law of the State of which the company making the distribution is a resident.

7. The provisions of paragraphs 1, 2 and 3 shall not apply if the recipient of the dividends, being a resident of a Contracting State, has in the other Contracting State, of which the company paying the dividends is a resident, a permanent establishment with which the holding by virtue of which the dividends are paid is effectively connected. In such a case, the provisions of Article 5 shall apply.

8. Where a company which is a resident of a Contracting State derives profits or income from the other Contracting State, that other State may not impose any tax on the dividends paid by the company to persons who are not residents of that other State, or subject the company's undistributed profits to a tax on undistributed profits, even if the dividends paid or the undistributed profits consist wholly or partly of profits or income arising in such other State.

ARTICLE 9.

S.I. No. 250 of 1967.

DOUBLE TAXATION RELIEF (TAXES ON INCOME) (REPUBLIC OF AUSTRIA) 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