S.I. No. 774/2004 - Double Taxation Relief (Taxes on Income and Capital Gains) (Government of the Hellenic Republic) Order 2004

1. The Contracting States shall notify each other that the internal legal requirements for the entry into force of this Convention have been complied with.

2. This Convention shall enter into force on the date of the later of the notifications referred to in paragraph 1, and its provisions shall have effect

(a) in the Hellenic Republic

(i) in respect of income derived on or after the first day of January of the calendar year next following the year in which the Convention enters into force;

(ii) in respect of taxes withheld at source, on or after the first day of January of the calendar year next following the year in which the Convention enters into force.

(b) in Ireland

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

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

Article 30

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 the Hellenic Republic

(i) in respect of taxes withheld at source, to income derived on or after the first day of January of the calendar year next following the date on which the period specified in the said notice of termination expires;

(ii) in respect of other taxes, to income arising in the taxable period beginning on or after the first day of January of the calendar year next following the date on which the period specified in the said notice of termination expires.

(b) in Ireland

(i) as respects income tax and capital gains tax, for any year of assessment beginning on or after the first day of January in the calendar 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 in the calendar year next following the date on 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 Athens on 24 November, 2003, in the English and Greek languages, each text being equally authentic, the English text prevailing in case of doubt.

For the Government of Ireland

For the Government of the Hellenic Republic

MARGARET HENNESSY

APOSTOLOS FOTIADIS

PROTOCOL

At the moment of signing the Convention between Ireland and the Hellenic Republic for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income and capital gains, the undersigned have agreed upon the following which shall be an integral part of the Convention.

Ad Article 4

For the purpose of this Convention, a recognised pension fund established in a Contracting State shall be regarded as a resident of that State.

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

DONE in duplicate at Athens on 24 November, 2003, in the English and Greek languages, each text being equally authentic, the English text prevailing in case of doubt.

For the Government of Ireland

For the Government of the Hellenic Republic

MARGARET HENNESSY

APOSTOLOS FOTIADIS

Given under the Official Seal of the Government,

this 7

th

day of December, 2004.

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 the force of law to the Convention with Greece which is set out in the Schedule. The effect of the Convention is summarised below.

This Convention with Greece, which was signed in Athens on 24 November 2003, is comprehensive in scope and is based on the OECD Model Convention.

It provides for the allocation of taxing rights between Ireland and Greece 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 Greece, 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, profits from the operation of aircraft engaged in international traffic and non-governmental pensions. 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 a person 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.

In the case of dividend income, the Convention provides for a reduced rate of 5% withholding tax where the recipient is a company that owns 25% of the company paying the dividends; otherwise, taxation in the source state is limited to 15% of the gross dividend. The Convention provides for source state taxation at a reduced rate of 5% with respect to interest and royalty income.

The Convention also provides for safeguarding 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 such information between these authorities as is necessary 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 when each country notifies the other of the completion of its procedures for bringing the Convention 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.

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. Where, under any provision of this Convention, income or gains is or are wholly or partly relieved from tax in a Contracting State and, under the laws in force in the other Contracting State, an individual, in respect of the said income or gains, is subject to tax by reference to the amount thereof which is remitted to or received in that other State, and not by reference to the full amount thereof, then the relief to be allowed under this Convention in the first-mentioned State shall apply only to so much of the income or gains as is remitted to or received in that other State.

Article 25

NON-DISCRIMINATION

6. 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 royalties, having regard to the use, right or information for which they are 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.

7. The provisions of this Article shall not apply if the right or property giving rise to the royalties was created or assigned mainly for the purpose of taking advantage of this Article and not for bona fide commercial reasons.

Article 13

CAPITAL GAINS

STATUTORY INSTRUMENTS

S.I. No. 774 of 2004

DOUBLE TAXATION RELIEF (TAXES ON INCOME AND CAPITAL GAINS) (GOVERNMENT OF THE HELLENIC REPUBLIC) ORDER 2004

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 in respect of income and chargeable gains 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, then subject to section 826 of that Act, the arrangements shall, notwithstanding any enactment, 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