S.I. No. 79/1970 - Double Taxation Relief (Taxes on Income) (Cyprus) Order, 1970.

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 Ireland

(i) as respects income tax (including sur-tax), for any year of assessment beginning on or after the 6th April, 1962;

(ii) as respects corporation profits tax, for any accounting period beginning on or after the 1st April, 1962, and for the unexpired portion of any accounting period current at that date;

(

b

) In Cyprus

as respects income tax, for the year of assessment beginning on the 1st January, 1962, and subsequent years.

ARTICLE 28.

TERMINATION.

This Convention shall remain in force indefinitely, but either of the Contracting States may terminate the Convention, through diplomatic channels, by giving notice of termination at least six months before the end of any calendar year after this year 1972. In such event the Convention shall cease to have effect:—

(

a

) 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;

(

b

) in Cyprus

as respects income tax, for any year of assessment beginning on or after the 1st January in the calendar year next following that in which such notice is given.

In WITNESS whereof the undersigned being duly authorised thereto have signed this Convention and have affixed thereto their seals.

DONE AT London this 24th day of September, 1968 in duplicate in the English language.

J. G. MOLLOY,

For Ireland.

C. A. ASHIOTIS,

For Cyprus.

GIVEN under the Official Seal of the Government, this 3rd

day of March, 1970.

SEÁN Ó LOINSIGH,

Taoiseach.

EXPLANATORY NOTE.

This Order gives the force of law to the Convention with Cyprus 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], certain capital gains [Article 12], 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 salaries and pensions are normally to be taxed by the paying Government only [Article 18].

In general dividends paid by companies which are residents of one country to shareholders who are residents of the other country are to be exempt in the former country from any tax which is chargeable on dividends in addition to the tax chargeable in respect of the profits or income out of which the dividends are paid [Article 9].

To a limited extent, each country will grant personal allowances and reliefs for tax purposes to residents of the other country [Article 22].

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 each country relief is to be given by allowing against the tax of that country payable on income derived from the other country, a credit in respect of the tax of that other country which the income has borne including, in the case of dividends, an appropriate proportion of the tax on the profits out of which the dividends are paid. Where certain income has been wholly or partly relieved from tax in the country of source by reason of the allowance there of a tax incentive a credit will be allowable in the country of residence of the recipient of the income in respect of the tax foregone in the country of source [Article 21].

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 1962-63 [Article 27].

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 exchange may take place through a Commission consisting of representatives of the competent authorities of the Contracting States.

ARTICLE 25.

EXCHANGE OF INFORMATION.

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 any company other than a company incorporated in Ireland and resident therein for the purposes of income tax, any relief or exemption allowed in accordance with the provisions of

(

a

) the

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

(No. 8 of 1956), as subsequently amended, or

(

b

) Part II of the

Finance (Miscellaneous Provisions) Act, 1956

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

(

c

) Chapter II or Chapter III of Part XXV of the

Income Tax Act, 1967

(No. 6 of 1967), as subsequently amended.

6. In this Article the term "taxation" means the taxes which are the subject of this Convention.

ARTICLE 24.

MUTUAL AGREEMENT PROCEDURE.

7. For the purposes of paragraph 4 notwithstanding the provisions of paragraph 6, income derived from sources in the United Kingdom by an individual who is resident in Ireland shall be deemed to be income from sources in Ireland if such income is not subject 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 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 22.

PERSONAL ALLOWANCES FOR NON-RESIDENTS.

S.I. No. 79 of 1970.

DOUBLE TAXATION RELIEF (TAXES ON INCOME) (CYPRUS) 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