S.I. No. 18/2010 - Double Taxation Relief (Taxes on Income) (Georgia) Order 2010.

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

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

(

a

) in Georgia: in respect of taxes chargeable, for any fiscal year beginning on or after 1st January in the calendar year next following that in which this Agreement enters into force;

(

b

) in Ireland

(i) in respect of income tax and capital gains tax, for any year of assessment beginning on or after the 1st January in the calendar year next following that in which this Agreement enters into force;

(ii) in respect of corporation tax, for any financial year beginning on or after 1st January in the calendar year next following that in which this Agreement enters into force.

ARTICLE 28

TERMINATION

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

In such event, the Agreement shall cease to have effect

(

a

) in Georgia: in respect of taxes chargeable, for any fiscal year beginning on or after 1st January in the calendar year next following that in which the notice is given;

(

b

) in Ireland

(i) in respect of income tax and capital gains tax, for any year of assessment beginning on or after 1st January in the calendar year next following that in which the notice is given;

(ii) in respect of corporation tax, for any financial year beginning on or after 1st January in the calendar year next following that in which the notice is given.

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

Done in duplicate at Tbilisi this 20th day of November 2008 in the English and Georgian languages, both texts being equally authentic.

Micheál Martin

Eka Tkeshelashvili

For the Government of Ireland

For the Government of Georgia

GIVEN under my Official Seal,

26 January 2010.

MARY COUGHLAN,

Tanaiste.

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 Agreement between Ireland and Georgia for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income, which is set out in the Schedule to the Order. The effect of the Agreement is summarised below.

This Agreement with Georgia, which was signed in Tblisi on 20th November 2008 is comprehensive in scope and is based on the OECD Model Convention.

The taxes covered by the Agreement are, for Ireland, Income Tax, Corporation Tax and Capital Gains Tax: for Georgia, Income Tax and Profit Tax.

The Agreement provides for the allocation of taxing rights between Ireland and Georgia 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 Georgia, may under the terms of the Agreement be taxed in both countries.

Where both countries continue to have taxing rights, for example in the case of dividend 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, the Agreement provides that the country of residence of the recipient of the income or gain will give relief against its tax on the income or gains for the tax paid in the other country on the same income or gains. Irish direct investors (i.e. Irish companies holding 5% or more of the voting power of the paying company) in receipt of dividends from a Georgian company are granted credit for the tax paid by the Georgian company on the profits out of which the dividends are paid (known as credit for underlying tax).

The Agreement provides for an exemption from source taxation for interest and royalty income. An exemption from source taxation for dividend income is provided for where the beneficial owner of the dividends is a company that directly or indirectly controls at least 50 % of the voting power and has invested at least €2 million in the company paying the dividends. A reduced rate of source taxation of 5% is provided for where the beneficial owner of the dividends is a company that controls directly or indirectly 10% of the voting power of the company paying the dividends; and has invested more than €100,000 in that company. A rate of 10% is provided for in all other cases

The Agreement 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 Agreement and for the exchange of such information between these authorities as is necessary for carrying out the provisions of the Agreement or of the domestic law of either country in relation to the taxes covered by the Agreement.

The Agreement will enter into force when each country notifies the other of the completion of its procedures for bringing the Agreement into force. It will thereupon have effect in both countries for tax periods beginning in the following year.

3. In no case shall the provisions of paragraphs 1 and 2 of this Article be construed so as to impose on a Contracting State the obligation

(

a

) to carry out administrative measures at variance with the laws and administrative practice of that or of the other Contracting State;

(

b

) to supply information which is not obtainable under the laws or in the normal course of the administration of that or of the other Contracting State;

(

c

) to supply information which would disclose any trade, business, industrial, commercial or professional secret or trade process, or information the disclosure of which would be contrary to public policy (ordre public).

4. If information is requested by a Contracting State in accordance with this Article, the other Contracting State shall use its information gathering measures to obtain the requested information, even though that other State may not need such information for its own tax purposes. The obligation contained in the preceding sentence is subject to the limitations of paragraph 3 of this Article but in no case shall such limitations be construed to permit a Contracting State to decline to supply information solely because it has no domestic interest in such information.

5. In no case shall the provisions of paragraph 3 of this Article be construed to permit a Contracting State to decline to supply information solely because the information is held by a bank, other financial institution, nominee or person acting in an agency or a fiduciary capacity or because it relates to ownership interests in a person.

ARTICLE 26

MEMBERS OF DIPLOMATIC MISSIONS AND CONSULAR POSTS

Nothing in this Agreement shall affect the fiscal privileges of members of diplomatic missions or consular posts under the general rules of international law or under the provisions of special agreements.

ARTICLE 27

ENTRY INTO FORCE

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

ARTICLE 24

MUTUAL AGREEMENT PROCEDURE

7. Where profits include items of income or gains which are dealt with separately in other Articles of this Agreement, then the provisions of those Articles shall not be affected by the provisions of this Article.

ARTICLE 8

SHIPPING AND AIR TRANSPORT

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

S.I. No. 18 of 2010

DOUBLE TAXATION RELIEF (TAXES ON INCOME) (GEORGIA) ORDER 2010

Notice of the making of this Statutory Instrument was published in

“Iris Oifigiúil” of

5

th February

, 2010.

WHEREAS it is enacted by section 826(1) (as amended by

section 35

of the

Finance Act 2007

(No. 11 of 2007)) of the

Taxes Consolidation Act 1997

(No. 39 of 1997) that where 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, capital gains tax or any taxes of a similar character imposed by the laws of the State or by the laws of that territory and, in the case of taxes of any kind or description imposed by the laws of the State or the laws of that territory, in relation to exchanging information for the purposes of the prevention and detection of tax evasion or granting relief from taxation under the laws of that territory to persons who are resident in the State for the purposes of tax, and that it is expedient that those arrangements should have the force of law, and the order so made is referred to in Part 1 of Schedule 24A of the

Taxes Consolidation Act 1997

, then subject to section 826 of that Act the arrangements shall, notwithstanding anything in any enactment, have the force of law as if such order were an Act of the Oireachtas on and from the date of the insertion of a reference to the order into Part 1 of Schedule 24A

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 section 826(1) (as amended by

section 35

of the

Finance Act 2007

(No. 11 of 2007)) of the

Taxes Consolidation Act 1997

(No. 39 of 1997) hereby order as follows