S.I. No. 80/1970 - Double Taxation Relief (Taxes on Income and Capital) (Kingdom of Norway) Order, 1970.

1. This Convention shall be ratified and the instruments of ratification shall be exchanged at Oslo 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) in respect of income tax (including sur-tax) for the year of assessment beginning on the 6th April, 1967, and subsequent years,

(2) in respect of corporation profits tax, for any accounting period beginning on or after the 1st April, 1967, and for the unexpired portion of any accounting period current at that date;

(

b

) in Norway

in respect of taxes on income and capital for the year of assessment beginning on the 1st January, 1967, and subsequent years.

3. The Agreement dated the 18th October, 1954, between the Government of Ireland and the Royal Norwegian Government for the avoidance of double taxation on income derived from the business of sea and air transport shall not have effect for any period for which the present Convention has effect.

ARTICLE 31.

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 the year 1972. In such event the Convention shall cease to have effect

(

a

) in Ireland

(1) in respect of 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) in respect of 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 Norway

in respect of taxes on income and capital 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, duly authorised thereto, have signed the Convention and have affixed thereto their seals.

DONE AT Dublin, this 21st day of October 1969 in duplicate, in the English language.

P. J. HILLERY,

For the Government of Ireland.

PAUL KÖHT,

For the Government of Norway.

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

day of April, 1970.

SEÁN Ó LOINSIGH,

Taoiseach.

EXPLANATORY NOTE.

This Order gives the force of law to the Convention with Norway 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 copyright royalties [Article 10], 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, 19 and 20].

In general dividends paid by Irish companies to Norwegian residents are to be exempt from Irish sur-tax; the rate of withholding tax on dividends paid by Norwegian 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 Norwegian company, the dividends are to be exempt from Norwegian tax. Furthermore a Norwegian company in receipt of Irish dividends is to be granted the same exemption from tax on those dividends which it would be entitled to in certain circumstances if the dividends had been Norwegian dividends and not Irish dividends [Article 8]. Irish dividends will qualify for this exemption notwithstanding that, because of Irish tax incentive reliefs (e.g. "exports" relief), no Irish income tax may have been deducted or Irish income tax may have been deducted at a reduced rate.

Capital gains (with certain exceptions, e.g. gains from the alienation of immovable property) are normally to be taxed only in the country of the taxpayer's residence [Article 12].

Subject to certain exceptions (e.g. immovable property) property of Irish residents situated in Norway is to be exempt from the annual taxes on capital imposed in that 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 Ireland relief is to be given by allowing against the Irish tax payable on Norwegian income a credit in respect of the Norwegian tax which the income has borne including, in the case of dividends (other than "fixed rate" dividends), an appropriate proportion of the Norwegian tax on the profits out of which the dividends are paid. In Norway relief is to be given by exemption of Irish income (except dividends) or capital from Norwegian tax but in calculating Norwegian tax on the remaining income or capital Norway may apply the rate which would otherwise have been applicable. As the exemption in Norway is allowable without regard to the amount of tax paid on the relevant Irish income, the fact that profits may have been wholly or partially relieved from Irish tax by reason of the allowance of a tax incentive relief (e.g. "exports" relief) will not debar such profits from the benefit of the exemption. In the case of Irish dividends relief from Norwegian tax will be given by way of credit in respect of the Irish tax appropriate to the dividend. Where, because of Irish tax incentive relief (e.g. "exports relief") no Irish income tax or Irish income tax at a reduced rate may have been deducted from the dividend a "matching credit" is to be given by reference to the income tax which could have been deducted but for the incentive relief [Article 23].

In the matter of personal allowances and relief for tax purposes, each country is to treat residents of the other in the same way as its own non-resident nationals [Article 24].

Provision is made for consultation [Article 26] and for the exchange of information [Article 27] between the competent authorities of the two countries in order to carry out the provisions of the Convention generally or in specific cases.

The Convention takes effect as from the fiscal year 1967/68 [Article 30].

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 27.

EXCHANGE OF INFORMATION.

5. The provisions of this Article shall not be construed as obliging

(

a

) 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

(i) the

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

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

(ii) Part II of the

Finance (Miscellaneous Provisions) Act, 1956

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

(iii) Chapter II or Chapter III of Part XXV of the

Income Tax Act, 1967

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

(

b

) Norway to grant to nationals of Ireland the exceptional tax relief which is accorded to Norwegian nationals and persons born of parents having Norwegian nationality pursuant to Section 22 of the Norwegian Taxation Act for the Rural Districts and Section 17 of the Norwegian Taxation Act for the Urban Districts.

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

ARTICLE 26.

MUTUAL AGREEMENT PROCEDURE.

7. 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 (including fishing, sealing and whaling vessels) or aircraft operated by a resident of a Contracting State shall be deemed to be performed in that Contracting State.

CHAPTER VI.

SPECIAL PROVISIONS.

ARTICLE 24.

PERSONAL ALLOWANCES FOR NON-RESIDENTS.

S.I. No. 80 of 1970.

DOUBLE TAXATION RELIEF (TAXES ON INCOME AND CAPITAL) (KINGDOM OF NORWAY) 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