S.I. No. 88/1994 - Double Taxation Relief (Taxes on Income) (Adjustment of Profits of Associated Enterprises) (European Community) Order, 1994.

1. if it fails to submit declarations, or submits incorrect declarations, in respect of taxes, charges or contributions which must be withheld and paid to the State under existing provisions, or in respect of value added tax, turnover tax or the special tax on luxury goods, in so far as the total amount of the above taxes, charges and contributions which should have been declared and paid to the State as a result of trade or other activities carried out over a period of six months exceeds an amount of six hundred thousand (600,000) Greek drachmas or one million (1,000,000) Greek drachmas over a period of one calendar year;

2. if it fails to submit a declaration of income tax, in so far as the tax due in respect of the income not declared is more than three hundred thousand (300,000) Greek drachmas;

3. if it fails to supply the taxation details laid down in the Code on Taxation Data;

4. if it supplies details as referred to under the previous case 3, which are incorrect as regards quantity or unit price or value, in so far as the inaccuracy results in a discrepancy which exceeds ten per cent (10%) of the total amount or of the total value of the goods, the provision of services or the trade generally;

5. if it fails to keep accurately the books and records required by the Code on Taxation Data, in so far as that inaccuracy has been noted in the course of a regular check, the findings of which have been confirmed either by administrative resolut on of the discrepancy or because the period allowed for an appeal has expired or as a result of a definitive decision by an administrative tribunal, provided that during the management period checked the discrepancy between gross income and the income declared is more than twenty per cent (20%) and in any case not less than one million (1,000,000) Greek drachmas;

6. if it fails to observe the obligation to keep books and records as laid down in the relevant provisions of the Code on Taxation Data;

7. if it issues false or fictitious — or itself falsifies — invoices for the sale of goods or the supply of services or any other taxation details as referred to in case 3 above.

A taxation document is regarded as false if it has been perforated or stamped in any way without the proper authentication having been entered in the relevant books of the competent tax authority, in so far as failure to make such an entry has occurred in the knowledge that such authentication is required for the taxation document. A taxation document is also regarded as false if the content and other details of the original or the copy differ from those which are recorded on the counterfoil of that document.

A taxation document is regarded as fictitious if it has been issued for a transaction or part of a transaction, transfer or any other reason not recorded in the total or for a transaction carried out by persons different from those recorded in the taxation document;

8. if it is aware of the intention of the action taken and collaborates in any way in the production of false taxation documents or is aware that the documents are false or fictitious and collaborates in any way in their issue or accepts the false, fictitious or falsified taxation documents with the intention of concealing material relevant to taxation.

Spain

The term 'serious penalties' includes administrative penalties for serious tax infringements, as well as criminal penalties for offences committed with respect to the taxation authorities.

France

The term 'serious penalties' includes criminal penalties and tax penalties such as penalties for failure to make a tax return after receiving a summons, for lack of good faith, for fraudulent practices, for opposition to tax inspection, for secret payments or distribution, or for abuse of rights.

Ireland

'Serious penalties' shall include penalties for

(

a

) failing to make a return;

(

b

) fraudulently or negligently making an incorrect return;

(

c

) failing to keep proper records;

(

d

) failing to make documents and records available for inspection;

(

e

) obstructing persons exercising statutory powers;

(

f

) failing to notify chargeability to tax;

(

g

) making a false statement to obtain an allowance.

The legislative provisions governing these offences, as at 3 July 1990, are as follows

—Part XXXV of the

Income Tax Act, 1967

,

—

Section 6

of the

Finance Act, 1968

,

—Part XIV of the

Corporation Tax Act, 1976

,

—

Section 94

of the

Finance Act, 1983

.

Any subsequent provisions replacing, amending or updating the penalty code would also be comprehended.

Italy

The term 'serious penalties' means penalties laid down for illicit acts, within the meaning of the domestic law, constituting a tax offence.

Luxembourg

Luxembourg considers to be a 'serious penalty' what the other Contracting State considers to be so for the purposes of Article 8.

Netherlands

The term 'serious penalty' means a penalty imposed by a judge for any action, committed intentionally, which is mentioned in Article 68 of the General Law on taxation.

Portugal

The term 'serious penalties' includes criminal penalties as well as the further tax penalties applicable to infringements committed with intent to defraud or in which the fine applicable is of an amount exceeding 1,000,000 (one million) Portuguese escudos.

United Kingdom

The United Kingdom will interpret the term 'serious penalty' as comprising criminal sanctions and administrative sanctions in respect of the fraudulent or negligent delivery of incorrect accounts, claims or returns for tax purposes.

DECLARATION BY THE FEDERAL REPUBLIC OF GERMANY ON ARTICLE 16

The Government of the Federal Republic of Germany reserves the right to declare, when lodging its instrument of ratification that the Convention also applies to Land of Berlin.

GIVEN under the Official Seal of the Government, this 12th day

of April, 1994.

ALBERT REYNOLDS,

Taoiseach.

EXPLANATORY NOTE.

This Order gives the force of law in Ireland to the Convention between the member states of the European Communities on the elimination of double taxation in connection with the adjustment of profits of associated enterprises set out in the Schedule to the Order.

The Convention provides for a mutual agreement procedure between tax authorities where double taxation has occurred. Where this procedure fails to resolve disputes, it provides for referral to an independent arbitration commission.

The double taxation referred to is that which might arise when tax authorities adjust for tax purposes the profits declared by enterprises where such profits result from transactions between associated enterprises in different Member States, and these transactions were at prices which differ from those which would normally apply between independent enterprises. The adjustment of profits may result in an increased tax bill for one of the enterprises and double taxation would occur when the tax authorities of the Member State in which the other enterprise is situated do not make a corresponding reduction in the taxable profits of that other enterprise.

The mutual agreement or arbitration procedure would apply in the cases described above. The taxes which are within the scope of the Convention are specified, and the tax authorities in the Member States are identified. If a company considers that there is double taxation, it may present its case to its tax authority within three years of the event. If the tax authority considers the case to be well-founded and cannot resolve it, it is obliged to attempt to resolve it by mutual agreement with the tax authority of the other Member State. If agreement cannot be reached within two years the tax authorities are required to seek from the arbitration commission an opinion as to how the tax should be eliminated. If the two tax authorities do not agree on a resolution of the case within six months of receipt of the commission's opinion, they would be obliged to accept the opinion of the commission. The commission would be composed of representatives of the tax authorities involved, together with independent persons of standing nominated by the Member States. The commission would be empowered to request information from the undertakings and from the tax authorities. Safeguards with regard to confidentiality and secrecy are provided.

The Convention will become operative on the first day of the third month after the final instrument of ratification has been deposited with the Secretary-General of the Council of the European Communities and it will remain in force for a period of five years. The Contracting States will meet six months prior to the expiry date to decide on its extension.

S.I. No. 88 of 1994.

DOUBLE TAXATION RELIEF (TAXES ON INCOME) (ADJUSTMENT OF PROFITS OF ASSOCIATED ENTERPRISES) (EUROPEAN COMMUNITY) ORDER, 1994.

WHEREAS it is enacted by

section 361

(1) of the

Income Tax Act, 1967

(No. 6 of 1967), as amended by

section 86

of the

Finance Act, 1974

(No. 27 of 1974),

section 38

(1) of the

Capital Gains Tax Act, 1975

(No. 20 of 1975),

section 166

of the

Corporation Tax Act, 1976

(No. 7 of 1976), and

section 47

(4) of the

Finance Act, 1983

(No. 15 of 1983), 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, corporation tax or capital gains 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 other than

section 47

of the

Finance Act, 1983

, 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 in

section 361

of the

Income Tax Act, 1967

(No. 6 of 1967), as amended by

section 86

of the

Finance Act, 1974

(No. 27 of 1974),

section 38

(1) of the

Capital Gains Tax Act, 1975

(No. 20 of 1975),

section 166

of the

Corporation Tax Act, 1976

(No. 7 of 1976), and

section 47

(4) of the

Finance Act, 1983

(No. 15 of 1983), hereby order as follows