S.I. No. 573/2002 - Double Taxation Relief (Taxes on Income and Capital Gains) (Republic of Slovenia) Order, 2002

1. Each of the Contracting States shall notify to the other the completion of the procedure required by its law for the bringing into force of this Convention.

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

a) In Slovenia

(i) in respect of taxes withheld at source, for amounts paid or credited on or after the first day of January in the calendar year next following the year in which the Convention enters into force;

(ii) in respect of other taxes on income and on capital gains, for any tax year beginning on or after the first day of January in the calendar year next following the year in which the Convention enters into force;

b) In lreland

(i) in respect of income tax and capital gains tax for any year of assessment beginning on or after the first day of January in the year next following the year in which the Convention enters into force;

(ii) in respect of corporation tax, for any financial year beginning on or after the first day of January in the year next following the year in which the Convention enters into force.

Article 29

TERMINATION

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

In such event, this Convention shall cease to have effect

a) In Slovenia

(i) in respect of taxes withheld at source, for amounts paid or credited on or after the first day of January in the calendar year next following the year in which the period specified in the said notice of termination expires;

(ii) in respect of other taxes on income and on capital gains, for any tax year beginning on or after the first day of January in the calendar year next following the year in which the period specified in the said notice of termination expires;

b) In Ireland

(i) in respect of income tax and capital gains tax for any year of assessment beginning on or after the first day of January in the year next following the year in which the period specified in the said notice of termination expires;

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

IN WITNESS WHEREOF, the undersigned, duly authorised thereto, have signed this Convention.

DONE in duplicate at Ljubljana on this 12

th

day of March, 2002, in the English and Slovenian languages, both texts being equally authentic.

For the Government of Ireland

For the Government of the Republic of Slovenia

GARY ANSBRO

DARKO KONČAN

Given under the Official Seal of the Government,

this 3

rd

day of December, 2002.

BERTIE AHERN,

Taoiseach.

EXPLANATORY NOTE.

(This note is not part of the instrument and does not purport to be a legal interpretation)

This Order gives force of law in Ireland to the Convention with the Republic of Slovenia which is set out in the Schedule. The principal provisions of the new Convention are summarised below.

This Convention with the Republic of Slovenia, which was signed in Ljubljana on 12

th

March 2002, is comprehensive in scope and is based on the OECD Model Convention.

It provides for the allocation of taxing rights between Ireland and the Republic of Slovenia and for the granting of relief from double taxation with regard to items of income and capital gains which, under the laws of Ireland and the laws of the Republic of Slovenia, may be taxed in both countries.

In many cases, the Convention awards the taxation right over items of income and gains to the country of residence of the recipient only, for example, for items such as business profits and gains on movable property, provided such income or gains do not arise through a permanent establishment or fixed base in the country of source and profits from the operation of ships or aircraft engaged in international traffic. In other cases, such as remuneration in respect of services rendered to the Government of either country, the Convention awards the sole taxation right to the country of source.

Where both countries continue to have taxing rights, for example in the case of dividend, interest and royalty income, business profits arising through a permanent establishment which an enterprise resident in one country has in the other country, or in the case of capital gains arising from the disposal of immovable property or shares linked with immovable property, the Convention provides that the country of residence of the recipient of the income or gain will give credit against its tax on the income or gains for the tax paid in the other country on the same income or gains.

The Convention also provides for the safeguarding of nationals and enterprises of one country against discriminatory taxation in the other country, for consultation between the competent authorities of the two countries for the purpose of resolving any doubts or difficulties arising as to the interpretation or application of the Convention and for the exchange of information that is relevant for carrying out the provisions of the Convention or of the domestic law of either country in relation to the taxes covered by the Convention.

The Convention will enter into force on the date of the later of the notifications by each country to the other of the completion of its procedures for bringing it into force. It will thereupon have effect in both countries for tax periods beginning in the following year.

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.

Article 26

EXCHANGE OF INFORMATION

5. The provisions of this Article shall apply only to taxes covered by this Convention.

Article 25

MUTUAL AGREEMENT PROCEDURE

6. The provisions of paragraph 5 shall not affect the right of a Contracting State to levy, according to its law, a tax on gains from the alienation of any property derived by an individual who is a resident of the other Contracting State and has been a resident of the first-mentioned State at any time during the three years immediately preceding the alienation of the property if the property was held by the individual before he became a resident of that other State.

Article 14

INDEPENDENT PERSONAL SERVICES

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 Convention.

Article 12

ROYALTIES

8. 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 in that other State (whether through a permanent establishment or otherwise), shall not of itself constitute either company a permanent establishment of the other.

Article 6

INCOME FROM IMMOVABLE PROPERTY

WHEREAS it is enacted by

sections 826

(1) and

828

of the

Taxes Consolidation Act 1997

(No. 39 of 1997), 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 168

of the

Taxes Consolidation Act 1997

, have the force of law

AND WHEREAS it is further enacted by

section 826

(6) of the

Taxes Consolidation Act 1997

that where such an order is proposed to be made, a draft of the order 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 the following 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

sections 826

(1) and

828

of the

Taxes Consolidation Act 1997

(No. 39 of 1997), hereby order as follows