S.I. No. 436/2015 - Double Taxation Relief (Taxes on Income) (Pakistan) Order 2015.

1. This Convention shall remain in force until terminated by a Contracting State. Either Contracting State may terminate the Convention, through diplomatic channels, by giving notice of termination at least six months before the end of any calendar year starting five year after the year in which the Convention entered into force.

In such event, the Convention shall cease to have effect

(

a

) in the case of Ireland—

(i) with regard to income tax, universal social charge and capital gains tax, for any year of assessment 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;

(ii) with regard to 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 the case of Pakistan—

(i) with regard to taxes withheld at source, for amounts taxable on or after the first day of January of the calendar year next following that in which the notice is given; and

(ii) with regard to other taxes, for the tax year beginning on or after the first day of July of the calendar year next following that in which the notice is given.

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

Done in duplicate at Dublin this 16th day of April 2015, in the English language.

For the Government of Ireland

For the Government of the Islamic Republic of Pakistan

Simon Harris

Dr. Syed Rizwan Ahmed

Protocol

At the time of signing this Convention between the Government of Ireland

and

the Government of the Islamic Republic of Pakistan

for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income, the undersigned have agreed that the following provisions shall form an integral part of this Convention

1.

With respect to Approved Retirement Funds in Ireland

It is understood that, taking account of tax-relief given for contributions or premiums paid in respect of retirement benefit schemes, retirement annuity contracts or other pension products, and the exemption from tax of income and gains accruing to a fund (referred to in this paragraph as a “pension fund”) created by such contributions or premiums, the distributions from an approved retirement fund in Ireland that was created by the transfer of accrued rights or assets from a pension fund shall only be taxable in Ireland, notwithstanding any provision of this Convention.

2.

With reference to Article 4

It is understood that a Common Contractual Fund (CCF) established in Ireland shall not be regarded as a resident of Ireland and shall be treated as fiscally transparent for the purposes of granting tax treaty benefits.

3.

With reference to Article 13, paragraph 5

Where

(

a

) an individual domiciled in Ireland ceases to be a resident in Ireland,

(

b

) disposes of property acquired prior to the first day of the calendar year in which he ceased to be resident in Ireland as mentioned in subparagraph (

a

) above, and

(

c

) then becomes resident again in Ireland within 5 years of ceasing to be so resident,

the provisions of paragraph 5 shall not affect the right of Ireland to tax the individual according to its law by reference to that disposal but the amount of the tax charged shall not exceed the amount of tax that would be charged on the amount of any gain arising on a deemed disposal by the individual of that property at market value on the day immediately before the first day of the calendar year in which he ceased to be resident in Ireland as mentioned in subparagraph (

a

) above.

Provided that if, after the date of signature of this Convention, the laws of Pakistan are changed to include a capital gains tax then Pakistan may inform the Irish competent authority of this development and, if Pakistan so requests, Ireland shall immediately enter into negotiations reviewing the relevance, in the light of such development, of the provisions of the preceding paragraph with a view to amending or repealing those provisions where appropriate.

Done in duplicate at Dublin this 16th day of April 2015 in the English language.

For the Government of Ireland

For the Government of the Islamic Republic of Pakistan

Simon Harris

Dr. Syed Rizwan Ahmed

GIVEN under the Official Seal of the Government,

13 October 2015.

ENDA KENNY,

Taoiseach.

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

(

a

) in the case of Ireland—

(i) with regard to income tax, universal social charge 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 in which this Convention enters into force;

(ii) with regard to corporation tax, for any financial year beginning on or after the first day of January in the calendar year next following the date in which this Convention enters into force;

(

b

) in the case of Pakistan—

(i) with regard to taxes withheld at source, in respect of amounts paid or credited on or after the first day of July next following the date upon which the Convention enters into force; and

(ii) with regard to other taxes, in respect of taxable years beginning on or after the first day of July next following the date upon which the Convention enters into force.

3. The Convention between the Government of Ireland and the Government of the Islamic Republic of Pakistan for the Avoidance of Double Taxation with respect to Taxes on Income signed at Paris on 13 April 1973, (hereinafter referred to as “the 1973 Convention”), shall cease to have effect from the dates on which this Convention becomes effective in accordance with paragraph 2 of this Article.

4. Notwithstanding paragraph 3, where any provision of the 1973 Convention would have afforded any greater relief from tax than is due under this Convention, any such provision as aforesaid shall continue to have effect for

(

a

) a period of twelve months, and

(

b

) subject to paragraph 5, in the case of paragraphs 1 and 2 of Article XV of the 1973 Convention, for a period of 5 years

from the date on which the provisions of this Convention would otherwise have effect in accordance with the provisions of paragraph 2 of this Article.

5. For the purposes of the application of subparagraph (

b

)(i) of paragraph 2 of Article XV of the 1973 Convention, the provisions of clauses (126D), (126E) and (133) of Part 1 of the Second Schedule to the Income Tax Ordinance 2001 shall apply in place of the provisions listed in that subparagraph.

Article 29

TERMINATION

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 or fees for technical services, 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 lastmentioned 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 13

CAPITAL GAINS

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 debtclaim 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 lastmentioned 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 AND FEES FOR TECHNICAL SERVICES

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.

CHAPTER III

TAXATION OF INCOME

Article 6

INCOME FROM IMMOVABLE PROPERTY

Notice of the making of this Statutory Instrument was published in

“Iris Oifigiúil” of

16

th October

, 2015.

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

section 157

of the

Finance Act 2010

(No. 5 of 2010)) 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, granting relief from taxation under the laws of that territory to persons who are resident in the State for the purposes of tax or collecting and recovering tax (including interest, penalties and costs in connection with such tax) for the purpose of the prevention of tax evasion, 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 amended by

section 157

of the

Finance Act 2010

(No. 5 of 2010)) of the

Taxes Consolidation Act 1997

, hereby order as follows