S.I. No. 21/2011 - Double Taxation Relief (Taxes on Income) (State Of Kuwait) Order 2011.

1. With respect to paragraph 1d) of Article 30.

Where, under any provision of this Agreement, a partnership is entitled, as a resident of Kuwait, to exemption from tax in Ireland on any income or capital gains, that provision shall not be construed as restricting the right of Ireland to tax any member of the partnership who is a resident of Ireland on his share of such income or capital gains; but any such income or gains shall be treated for the purposes of Article 22 of this Agreement as income or gains from sources in Kuwait.

2. With respect to paragraph 1a) of Article 4

If Kuwait should introduce an income tax on individuals, the definition of a resident of Kuwait for the purpose of this Agreement will be reconsidered by the competent authorities of the Contracting States.

3. With respect to paragraph 2c) of Article 4

The entities to which subparagraph c) of paragraph 2 shall apply are the following

(1) The Gulf Investment Corporation;

(2) The United Arab Shipping Company;

(3) any other entity to be agreed upon by the Competent Authorities of the Contracting States.

4. With respect to paragraph 1 of Article 7

Payments of any kind received as a consideration for the use of, or the right to use, industrial, commercial or scientific equipment shall be deemed to be profits of an enterprise to which the provisions of Article 7 apply.

5. With respect to paragraphs 1 and 2 of Article 7

It is understood that where an enterprise of a Contracting State sells goods or merchandise or carries on business in the other Contracting State through a permanent establishment situated therein, the profits of that permanent establishment shall be determined only on the basis of the remuneration which is attributable to the actual activity of the permanent establishment for such sales or business. In particular, in the case of contracts for the survey, supply, installation or construction of industrial, commercial or scientific equipment or premises, or of public works, when the enterprise has a permanent establishment, the profits of such permanent establishment shall be determined only on the basis of that part of the contract which is effectively carried out by the permanent establishment in the State where the permanent establishment is situated. The profits related to that part of the contract which is carried out by the head office of the enterprise shall be taxable only in the State of which the enterprise is a resident.

6. With respect to paragraph 6 of Article 7

It is understood that if the information available to the competent authority of a Contracting State is inadequate to determine the profits to be attributed to the permanent establishment of an enterprise, nothing in that Article shall affect the application of any law of that State relating to the determination of the tax liability of a person by the making of an estimate by the competent authority, provided that the law shall be applied in accordance with the principles of Article 7.

In WITNESS WHEREOF the respective plenipotentiaries of both Contracting States have signed this Protocol.

Done at Kuwait City this 17 Dhul Hijja 1431 corresponding to the 23rd day of November 2010, in two originals, in the English and Arabic languages, both texts being equally authentic.

For the Government of Ireland

For the Government of the State of Kuwait

Ciarán Madden

Khalifa M. Hamada

GIVEN under the Official Seal of the Government,

11 January 2011.

BRIAN COWEN,

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 Agreement between Ireland and Kuwait 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, which was signed in Kuwait City on 23rd November 2010, is comprehensive in scope and is based on the OECD Model Convention.

The taxes covered by the Agreement are, for Ireland, Income Tax, Income Levy, Corporation Tax and Capital Gains Tax: for Kuwait, the Corporate Income Tax, the contribution from the net profits of the Kuwaiti shareholding companies payable to the Kuwaiti Foundation for Advancement of Science (KFAS), the Zakat and the tax subjected according to the supporting of national employee law.

The Agreement provides for the allocation of taxing rights between Ireland and Kuwait 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 Kuwait, 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 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 10% or more of the voting power of the paying company) in receipt of dividends from a Kuwaiti company are granted credit for the tax paid by the Kuwaiti company on the profits out of which the dividends are paid (known as credit for underlying tax).

There is an exemption from source country taxation with respect to dividend, and interest income. Source State taxation royalties is restricted to 5%.

The Agreement also provides 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 forseeably relevant for carrying out the provisions of the Agreement or of the domestic law of either country in relation to the taxes of every kind.

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 in that year.

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. An enterprise shall not be deemed to have a permanent establishment in a Contracting State merely because it carries on business in that Contracting State through a broker, general commission agent or any other agent of an independent status, provided that such persons are acting in the ordinary course of their business. However, when the activities of such an agent are devoted wholly or almost wholly on behalf of that enterprise and the transactions between the agent and the enterprise are not made under arm’s length conditions, he will not be considered an agent of an independent status within the meaning of this paragraph.

9. 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. 21 of 2011

DOUBLE TAXATION RELIEF (TAXES ON INCOME) (STATE OF KUWAIT) ORDER 2011

Notice of the making of this Statutory Instrument was published in

“Iris Oifigiúil” of

21

st January

, 2011.

WHEREAS it is enacted by

section 826

(1) (as substituted 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 that 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 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 substituted 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