S.I. No. 162/1970 - Double Taxation Relief (Taxes on Income) (Republic of France) Order, 1970.

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

2. It shall enter into force upon the exchange of instruments of ratification and its provisions shall apply for the first time

(

a

) in France

to taxes charged in respect of the year 1966 and later years. However, in the case of income other than that which is the subject of Article II of this Convention, no repayment shall be made of the withholding tax (in respect of tax on the income of individuals) which shall have been collected in France on the payment of the said income to beneficiaries before the exchange of instruments of ratification of this Convention.

(

b

) in Ireland

as respects income tax (including sur-tax) for any year of assessment beginning on or after the 6th April, 1966; as respects corporation profits tax for any accounting period beginning on or after the 1st April, 1966, and for the unexpired part of any accounting period current at that date.

ARTICLE 27.

This Convention shall remain in force until denounced by one of the Contracting States. Either Contracting State may denounce the Convention through diplomatic channels after prior notice of at least six months before the end of any calendar year after the year 1970. In such event the Convention shall apply for the last time

(

a

) in France

to taxes charged in respect of the calendar year following that in which the notice is given;

(

b

) in Ireland

to income tax (including sur-tax) in respect of the year of assessment beginning on the 6th April in the calendar year following that in which the notice is given; to corporation profits tax in respect of any accounting period ending on the 3ist March in the second calendar year following that in which the notice is given and in respect of the expired part of any accounting period current at that date.

In witness whereof the plenipotentiaries of the two States have signed the present Convention and have affixed thereto their Seals.

Done at Paris on 21 March 1968 in duplicate in the French and English languages both texts being equally authoritative.

THOMAS V. COMMINS. GILBERT DE CHAMBRUN.

GIVEN under the Official Seal of the Government, this 14th day

of July, 1970.

SEÁN Ó LOINSIGH,

Taoiseach.

EXPLANATORY NOTE.

This Order gives the force of law to the Convention with France 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 include trading profits not arising through a "permanent establishment" [Article 4], shipping and air transport profits [Article 6], interest [Article 10], patent and copyright royalties [Article 11], certain earnings of temporary residents [Articles 12, 17 and 19], pensions (other than Government pensions] and annuities [Article 14], profits from professional or other independent activities not attributable to a fixed base [Article 16]. Government salaries and pensions are normally to be taxed by the paying Government only [Article 13].

In general, dividends paid by Irish companies to French residents are to be exempt from Irish sur-tax; the rate of withholding tax on dividends paid by French companies to Irish residents is not to exceed 15 per cent and, where the Irish resident is a company holding shares representing at least 50 per cent of the capital in the French company, is not to exceed 10 per cent [Article 9].

In the matter of personal allowances and reliefs for tax purposes, each country is to treat the nationals of the other in the same way as it treats its own nationals under the same conditions [Article 22].

Where, under the Convention, income derived from one country by a person resident in the other country 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 French income, a credit in respect of the French tax which the income has borne including, in the case of dividends, an appropriate proportion of the French tax on the profits out of which the dividends are paid. In France, relief is to be given by way of exemption of income (except dividends) from sources in Ireland but the income so exempted is to be taken into account for the purpose of determining the rate of French tax to be imposed on the taxpayer's other income. Irish dividends, whether or not subject to Irish income tax by deduction, are to be exempt from the French withholding tax to the extent of the rate of 24 per cent which nevertheless is to be regarded as effectively paid for the purposes of French tax [Article 21].

Provision is made for the exchange, between the competent authorities of the two countries, of information necessary to give effect to the Convention and for the prevention of fiscal fraud [Article 23],

The Convention takes effect for the fiscal year 1966/67 [Article 26].

3. The competent authorities of the Contracting States shall endeavour to resolve by mutual agreement any difficulties arising as to the application of this Convention. They may also consult together for the elimination of double taxation in cases not provided for in this 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 exchange may take place through a Commission consisting of representatives of the competent authorities of the Contracting States.

ARTICLE 25.

5. Enterprises of a Contracting State, the capital of which is wholly or partly owned or controlled, directly or indirectly, by one or more residents of the other Contracting State, shall not be subjected in the first-mentioned Contracting State 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 State are or may be subjected.

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

7. The provisions of this Article shall not be considered as obliging Ireland to grant to residents of France the reductions in or exemptions from tax granted (

a

) by the

Finance (Profits of Certain Mines) (Temporary Relief from Taxation) Act, 1956

(No. 8 of 1956) or by Part II of the

Finance (Miscellaneous Provisions) Act, 1956

(No. 47 of 1956) as subsequently amended in either case, (

b

) by Chapter II or Chapter III of Part XXV of the

Income Tax Act, 1967

(No. 6 of 1967).

ARTICLE 23.

8. A company shall be regarded as a resident of Ireland if it is managed and controlled in Ireland. It is agreed that this provision does not prevent the application, according to Irish law, of the corporation profits tax in the case of a company incorporated in Ireland which is not managed and controlled in France.

A company shall be regarded as a resident of France if it is managed and controlled in France.

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

(

a

) A permanent establishment shall include especially

(

aa

) a place of management;

(

bb

) a branch;

(

cc

) an office;

(

dd

) a factory;

(

ee

) a workshop;

(

ff

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

(

gg

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

(

b

) the term "permanent establishment" shall not be deemed to include

(

aa

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

(

bb

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

(

cc

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

(

dd

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

(

ee

) 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.

(

c

) A person acting in a Contracting State on behalf of an enterprise of the other Contracting State, other than an agent of an independent status to whom subparagraph (

d

) applies, shall be deemed to be a permanent establishment in the first-mentioned State if he has, and habitually exercises in that State, 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.

(

d

) An enterprise of a Contracting State shall not be deemed to have a permanent establishment in the other Contracting State merely because it carries on business there 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.

(

e

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

10. The expression "competent authority" means

in the case of Ireland, the Revenue Commissioners or their duly authorised representatives

in the case of France, the Minister of Finance and Economic Affairs or his duly authorised representatives.

11. In the application of this Convention by a Contracting State any term or expression which is not otherwise defined shall, unless the context otherwise requires, have the meaning which it has under the law of that State relating to the taxes which are the subject of this Convention.

ARTICLE 3.

S.I. No. 162 of 1970.

DOUBLE TAXATION RELIEF (TAXES ON INCOME) (REPUBLIC OF FRANCE) ORDER, 1970.

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