S.I. No. 322/1995 - Double Taxation Relief (Taxes on Income) (Republic of Poland) Order, 1995.

1. The Contracting States shall notify to each other that the constitutional requirements for the entry into force of this Agreement have been complied with.

2. This Agreement shall enter into force on the date of the later of these notifications and shall thereupon have effect

(

a

) in Ireland

(i) as respects income tax and capital gains tax, for any year of assessment beginning on or after the sixth day of April in the year next following the date on which this Agreement enters into force;

(ii) as respects corporation tax, for any financial year beginning on or after the first day of January in the year next following the year in which this Agreement enters into force;

(

b

) in Poland

(i) in respect of taxes withheld at source, to amounts of income derived on or after 1st January in the calendar year next following the year in which the Agreement enters into force;

(ii) in respect of other taxes on income, to such taxes chargeable for any taxable year beginning on or after 1st January in the calendar year next following the year in which the Agreement enters into force.

ARTICLE 30

Termination

This Agreement shall remain in force until terminated by a Contracting State. Either Contracting State may terminate the Agreement at any time after five years from the date on which the Agreement enters into force provided that at least six months prior notice of termination has been given through diplomatic channels.

In such event, this Agreement shall cease to have effect

(

a

) in Ireland

(i) as respects income tax and capital gains tax, for any year of assessment beginning on or after the sixth day of April in the year next following the date on which the period specified in the said notice of termination expires;

(ii) as respects corporation tax, for any financial year beginning on or after the first day of January next following the date on which the period specified in the said notice of termination expires;

(

b

) in Poland

(i) in respect of taxes withheld at source, to amounts of income derived on or after 1st January in the calendar year next following the year in which the notice is given;

(ii) in respect of other taxes on income, to such taxes chargeable for any taxable year beginning on or after 1st January in the calendar year next following the year in which the notice is given.

In witness whereof the undersigned, duly authorised thereto, have signed this Agreement.

Done at Madrid on 13th November 1995, in duplicate in the English and Polish languages, both texts being equally authentic.

DICK SPRING

WLADYSLAW BARTOSZWEWSKI

For the Government

For the Government of the

of Ireland

Republic of Poland

PROTOCOL

THE GOVERNMENT OF IRELAND

AND

THE GOVERNMENT OF THE REPUBLIC OF POLAND

Have agreed at the signing at Madrid on the 13th November 1995 of the Agreement between the two States for the avoidance of double taxation with respect to taxes on income upon the following provisions which shall form an integral part of the said Agreement

With reference to paragraph 3 of Article 10, it is understood that if at any time after the signing of this Agreement Ireland should levy a tax at source on the dividends to which that paragraph applies, the paragraph shall cease to apply to such dividends and the dividends may be taxed in the Contracting State of which the company paying the dividends is a resident and according to the laws of that State but the tax so charged shall not exceed 5 per cent of the gross amount of the dividends.

In witness whereof the undersigned, duly authorised thereto, have signed this Protocol.

DICK SPRING

WLADYSLAW BARTOSZWEWSKI

For the Government

For the Government of the

of Ireland

Republic of Poland

GIVEN under the Official Seal of the Government, this 5th

day of December, 1995.

JOHN BRUTON,

Taoiseach.

EXPLANATORY NOTE.

This Order gives the force of law to the Agreement with Poland which is set out in the Schedule. The effect of the Agreement is summarised below.

This Agreement with the Republic of Poland, which was signed in Madrid on 13th November, 1995, is comprehensive in scope and is based on the OECD Model Convention.

It provides, with regard to income (which includes capital gains) which under the laws of Ireland and the laws of Poland may be taxed in both countries, for the allocation of taxing rights between the two countries and for the granting of relief from double taxation if under the Agreement items of income continue to be taxable in both countries.

For example, items such as business profits and gains on movable property (provided that they do not arise through or are not connected with a permanent establishment or fixed base in the source country), profits from the operation of ships, aircraft or road transport vehicles in international traffic and non-government pensions, are taxable only in the country of residence of the recipient.

Where both countries continue to have taxing rights, for example, with regard to business profits arising through a permanent establishment which an enterprise of one country has in the other country, the Agreement provides, in the case of Poland, that double taxation will be relieved by exemption from further tax in Poland. Ireland, on the other hand, grants credit for the tax paid in Poland.

In the case of dividends, other than from a holding by a company of at least 25 per cent of the voting power in the company paying the dividend (direct investment), and in the case of interest and royalties, Poland like Ireland will relieve double taxation by means of the credit method i.e. a Polish resident recipient will be granted a credit against Polish tax for the tax imposed on the same income in Ireland.

Capital gains arising from the disposal of immovable property, or of shares linked with immovable property, may be taxed by the country in which the property is situated. Other gains, including gains arising from the disposal of ships, aircraft or road transport vehicles operated in international traffic, are normally taxable only in the country of residence of the taxpayer, unless they arise from the disposal of assets of a permanent establishment or a fixed base which the taxpayer has in the other country.

The Agreement preserves the taxation rights of a state in respect of income and capital gains arising from the off-shore exploration or exploitation of natural resources in the territory of that state, provided that such operations are carried on for a period or periods in the aggregate of 30 days or more within any period of twelve months.

In the case of dividends (other than a direct investment) flowing between the two countries, the Agreement provides for a withholding tax of 15 per cent. Under current Irish domestic law, no withholding tax is in fact levied on dividends flowing from Ireland to Poland.

The withholding tax rate in the Agreement for interest and royalties is 10 per cent of the gross amount in each case.

The Agreement also contains provisions for safeguarding citizens and enterprises of one country against discriminatory taxation in the other country, for consultation between the competent authorities in both states for the purpose of resolving any difficulties or doubts arising as to the interpretation or application of the Agreement and for the exchange of information between these authorities as is necessary for carrying out the provisions of the Agreement or of the domestic laws of the Contracting States concerning the taxes covered by the Agreement.

The Agreement will become operative in both states for the tax periods beginning in the calendar year following the year in which the Agreement is given force in law.

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 Agreement.

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.

ARTICLE 27

Exchange of Information

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 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 the first-mentioned State are or may be subjected.

6. The provisions of this Article shall apply to the taxes which are the subject of this Agreement.

ARTICLE 26

Mutual Agreement Procedure

7. Where, by reason of a special relationship between the payer and the beneficial owner or between both of them and some other person, the amount of the interest, having regard to the debt-claim for which it is paid, exceeds the amount which would have been agreed upon by the payer and the beneficial owner in the absence of such relationship, the provisions of this Article shall apply only to the last-mentioned amount. In such case, the excess part of the payments shall remain taxable according to the laws of each Contracting State, due regard being had to the other provisions of this Agreement.

ARTICLE 12

Royalties and Fees for Technical Services

S.I. No. 322 of 1995.

DOUBLE TAXATION RELIEF (TAXES ON INCOME)(REPUBLIC OF POLAND) ORDER, 1995.

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 by

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