S.I. No. 459/2019 - Double Taxation Relief (Taxes on Income and Capital Gains) (Kingdom of the Netherlands) Order 2019

1. Income and gains from collective investment through a common contractual fund (CCF), closed fund for mutual account ‘besloten fonds voor gemene rekening’ (closed FGR) or umbrella fund consisting of several CCFs or closed FGRs, are allocated to the investors that invest through the CCF, closed FGR or umbrella fund in proportion to their participations in the fund.

2. A CCF or closed FGR which is established in a Contracting State and which receives income or gains arising from the other Contracting State may itself, represented by its fund manager or its depository, in lieu of and instead of the investors in the CCF or closed FGR, claim the benefits of an agreement for the avoidance of double taxation, to which the other State is a party and which is specifically applicable to any of the investors concerned, on behalf of those investors in the CCF or closed FGR.

Such claims may be subject to enquiry and, where requested, a fund manager or depository shall provide relevant information, which may include a schedule of investors and allocated income or gains relevant to a claim, as well as the particular agreements for the avoidance of double taxation under which an application for benefits is made by the CCF or FGR.

3. Notwithstanding the provision of paragraph 2, a CCF or closed FGR may not claim treaty benefits on behalf of an investor in the CCF or closed FGR if the investor has itself made a claim for benefits in respect of the same income or gains.

IX

Ad Article 9

It is understood that the fact that associated enterprises have concluded arrangements, such as cost sharing arrangements or general services agreements, for or based on the allocation of executive, general administrative, technical and commercial expenses, research and development expenses and other similar expenses, is not in itself a condition as meant in paragraph 1 of Article 9.

X

Ad Article 10

The provisions of paragraph 3 of Article 10 shall not apply to a person who is a fiscal investment institution (Fiscale Beleggingsinstelling) for the purposes of the corporation tax of the Netherlands.

XI

Ad Articles 10, 11 and 12

Applications for relief at source or the refund of the excess amount of tax have to be lodged in conformity with the laws and regulations of the Contracting State levying or having levied the tax.

XII

Ad Articles 10 and 13

It is understood that, in the case of the Netherlands, income received in connection with a liquidation of a company or a purchase by a company of its own shares or other rights, as referred to in paragraph 6 of Article 10, is treated as dividends.

XIII

Ad Article 15

It is understood that, where a company is a resident of the Netherlands, the term “member of the board of directors” includes both a “bestuurder” and a “commissaris”. The terms “bestuurder” and “commissaris” mean respectively persons who are charged with the general management of the company and persons who are charged with the supervision thereof.

XIV.

Ad Article 27

The provisions of Article 27 shall apply accordingly to assistance in the collection of the income-related regulations under the laws of the Netherlands by the tax authorities of the Netherlands concerned with the implementation, administration or enforcement of these income-related regulations after consultation and agreement between the competent authorities of the Kingdom of the Netherlands and Ireland by notes to be exchanged through diplomatic channels. This provision shall not have effect until the date specified in the exchange of diplomatic notes.

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

DONE in duplicate at Dublin this 13

th

day of June, 2019, in the English language.

For the Government of Ireland

For the Government of the Kingdom of the Netherlands

Patrick O‘Donovan

Minister of State

Stef Blok

Minister of Foreign Affairs

GIVEN under the Official Seal of the Government,

3 September, 2019.

LEO VARADKAR,

Taoiseach.

4. Notwithstanding the provisions of paragraphs 2 and 3, where prior to the date on which this Convention comes into effect, a resident of one of the Contracting States derives pensions or other similar remuneration, including pensions and similar remuneration referred to in paragraph 1 of Article 18 of the 1969 Convention, or annuities arising in the other State, or pensions or other payments under the social security legislation of the other State, and who continues after that date to derive such pensions, remuneration, annuities or social security payments, the provisions of Articles 17, 18, 19 and 20 of the 1969 Convention shall remain applicable after the date of the entry into force of this Convention, unless the person receiving the pension, remuneration, annuity or social security payment elects for application of the provisions of this Convention. Such election has to be made to the tax authorities of both States within two years from the date this Convention comes into effect and is irrevocable.

Article 31

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 written notice of termination has been received through diplomatic channels.

In such event the Convention shall cease to have effect

(a) in the Netherlands

for taxable years and periods beginning, and taxable events occurring, on or after the first day of January following the date on which the period specified in the said notice of termination expires;

(b) in Ireland

(i) as respects income tax, the universal social charge and capital gains tax, for any year of assessment beginning on or after the first day of January 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 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 Dublin this 13

th

day of June, 2019, in the English language.

For the Government of Ireland

For the Government of the Kingdom of the Netherlands

Patrick O‘Donovan

Minister of State

Stef Blok

Minister of Foreign Affairs

PROTOCOL TO THE CONVENTION BETWEEN IRELAND AND THE KINGDOM OF THE NETHERLANDS FOR THE ELIMINATION OF DOUBLE TAXATION WITH RESPECT TO TAXES ON INCOME AND CAPITAL GAINS AND THE PREVENTION OF TAX EVASION AND AVOIDANCE

On signing the Convention between Ireland and the Kingdom of the Netherlands for the elimination of double taxation with respect to taxes on income and capital gains and the prevention of tax evasion and avoidance the signatories have agreed that the following provisions shall form an integral part of the Convention

I

ARF, AMRF and PRSA

Taking account of tax-relief given for contributions or premiums paid in respect of retirement benefit schemes, retirement annuity contracts or other pension products in accordance with Part 30 of the

Taxes Consolidation Act 1997

of Ireland (referred to in this paragraph as “the Act”), 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,

a) distributions for the purposes of section 784A of the Act from an Approved Retirement Fund (within the meaning of the section) or from an Approved Minimum Retirement Fund (within the meaning of section 784C of that Act) that was created by the transfer of accrued rights or assets from a pension fund, and

b) in relation to a Personal Retirement Savings Account (PRSA) within the meaning of section 787A of the Act, the amount or value of any assets that a PRSA administrator (within the meaning of the section) makes available to, or pays to, a contributor (within the meaning of that section) or to any other person,

shall be taxable only in Ireland.

II

Ad Article 1 and Article 4

Notwithstanding the provisions of Article 1, a person who is a tax exempt investment institution (Vrijgestelde Beleggingsinstelling) for the purposes of the corporation tax of the Netherlands shall not be entitled to the benefits of this Convention.

III

Common Contractual Funds and closed Funds for Joint Account

It is understood that a Common Contractual Fund (CCF) established in Ireland and a closed fund for mutual account ‘besloten fonds voor gemene rekening’ (closed FGR) established in the Netherlands shall respectively be regarded neither as a resident of Ireland nor of the Netherlands and shall be treated as fiscally transparent for the purposes of granting tax treaty benefits.

IV

Ad Article 2

It is understood that in the case of Ireland the corporation tax includes profit resource rent tax and petroleum production tax.

V

Ad paragraph 1 of Article 4

It is understood that in the case of an individual living aboard a ship “any other criterion of a similar nature” shall include the home harbour of that ship.

VI

Ad Article 5

It is understood that offshore activities include activities in connection with wind farms.

VII

Ad Articles 5, 6, 7 and 13

It is understood that

a) rights to the exploration and exploitation of natural resources; and

b) shares (or comparable instruments) deriving more than 50 per cent of their value directly or indirectly from such rights,

shall be regarded as immovable property situated in the Contracting State to whose territorial sea, and any area beyond and adjacent to the territorial sea within which that State, in accordance with international law, exercises jurisdiction or sovereign rights, including the seabed and subsoil thereof, these rights apply, and that these rights are regarded as assets of a permanent establishment in that State. Furthermore, it is understood that the aforementioned rights include rights to interests in, or benefits from, assets that arise from that exploration or exploitation.

VIII

Ad Articles 6, 10, 11, 12 and 13

5. Notwithstanding the provisions of paragraphs 3 and 4, a revenue claim accepted by a Contracting State for purposes of paragraph 3 or 4 shall not, in that State, be subject to the time limits or accorded any priority applicable to a revenue claim under the laws of that State by reason of its nature as such. In addition, a revenue claim accepted by a Contracting State for the purposes of paragraph 3 or 4 shall not, in that State, have any priority applicable to that revenue claim under the laws of the other Contracting State.

6. Proceedings with respect to the existence, validity or the amount of a revenue claim of a Contracting State shall not be brought before the courts or administrative bodies of the other Contracting State.

7. Where, at any time after a request has been made by a Contracting State under paragraph 3 or 4 and before the other Contracting State has collected and remitted the relevant revenue claim to the first-mentioned State, the relevant revenue claim ceases to be

a) in the case of a request under paragraph 3, a revenue claim of the first-mentioned State that is enforceable under the laws of that State and is owed by a person who, at that time, cannot, under the laws of that State, prevent its collection; or

b) in the case of a request under paragraph 4, a revenue claim of the first-mentioned State in respect of which that State may, under its laws, take measures of conservancy with a view to ensure its collection;

the competent authority of the first-mentioned State shall promptly notify the competent authority of the other State of that fact and, at the option of the other State, the first-mentioned State shall either suspend or withdraw its request.

8. In no case shall the provisions 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 carry out measures which would be contrary to public policy (ordre public);

c) to provide assistance if the other Contracting State has not pursued all reasonable measures of collection or conservancy, as the case may be, available under its laws or administrative practice;

d) to provide assistance in those cases where the administrative burden for that State is clearly disproportionate to the benefit to be derived by the other Contracting State.

Article 28

MEMBERS OF DIPLOMATIC MISSIONS AND CONSULAR POSTS

9. The following rules shall apply in order to determine the start date

a) The competent authority that received the initial request for a mutual agreement procedure under paragraph 1 of Article 24 shall, within 60 days after receiving the request

(i) send a notification to the person who presented the case that it has received the request; and

(ii) send a notification of that request, along with a copy of the request, to the competent authority of the other Contracting State.

b) Within 90 days after receiving the request for a mutual agreement procedure (or a copy thereof from the competent authority of the other Contracting State), each competent authority shall either

(i) notify the person who has presented the case and the other competent authority that it has received the information necessary to undertake substantive consideration of the case; or

(ii) request additional information from that person for that purpose.

c) Where pursuant to subdivision (ii) of subparagraph b) above, one or both of the competent authorities have requested from the person who presented the case additional information necessary to undertake substantive consideration of the case, the competent authority that requested the additional information shall, within 90 days after receiving the additional information from that person, notify that person and the other competent authority either

(i) that it has received the requested information; or

(ii) that some of the requested information is still missing.

d) Where neither competent authority has requested additional information pursuant to subdivision (ii) of subparagraph b) above, the start date shall be the earlier of

(i) the date on which both competent authorities have notified the person who presented the case pursuant to subdivision (i) of subparagraph b) above; and

(ii) the date that is 90 days after the notification to the competent authority of the other Contracting State pursuant to subdivision (ii) of subparagraph a) above.

e) Where additional information has been requested pursuant to subdivision (ii) of subparagraph b) above, the start date shall be the earlier of

(i) the latest date on which the competent authorities that requested additional information have notified the person who presented the case and the other competent authority pursuant to subdivision (i) of subparagraph c) above; and

(ii) the date that is 90 days after both competent authorities have received all information requested by either competent authority from the person who presented the case.

If, however, one or both of the competent authorities send the notification referred to in subdivision (ii) of subparagraph c) above, such notification shall be treated as a request for additional information under subdivision (ii) of subparagraph b) above.

10. The following rules shall govern the selection and appointment of arbitrators

a) The arbitration panel shall consist of three individual arbitrators with expertise or experience in international tax matters. Each arbitrator appointed to the arbitration panel must be impartial and independent of the competent authorities, tax administrations, and ministries of finance of the Contracting States and of all persons directly affected by the case (as well as their advisors) at the time of accepting an appointment, maintain his or her impartiality and independence throughout the proceedings, and avoid any conduct for a reasonable period of time thereafter which may damage the appearance of impartiality and independence of the arbitrators with respect to the proceedings.

b) Within 60 days after the request for arbitration (or a copy thereof) has been received by both competent authorities, the competent authorities shall each appoint one arbitrator. Within 60 days of the later of the appointments, the arbitrators so appointed will appoint a third arbitrator who will function as Chair. The Chair shall not be a national or resident of either Contracting State.

c) If any appointment is not made within the required time period, the arbitrator(s) not yet appointed shall be appointed by the highest ranking official of the Centre for Tax Policy and Administration of the Organisation for Economic Co-operation and Development who is not a national of either Contracting State within 10 days after receiving a request to that effect from the person who made the request for arbitration. The same procedure shall apply with the necessary adaptations if for any reason it is necessary to replace an arbitrator after the arbitration process has begun.

d) An arbitrator will be considered to have been appointed when a letter confirming that appointment and signed by both the arbitrator and the person or persons who have the power to appoint that arbitrator has been communicated to both competent authorities.

11. Except to the extent that the competent authorities of the Contracting States mutually agree on different rules, the following rules shall apply with respect to an arbitration proceeding pursuant to this Article

a) Within 60 days after the appointment of the Chair of the arbitration panel (unless, before the end of that period, the competent authorities agree on a different period), the competent authority of each Contracting State shall submit to each arbitrator and to the other competent authority a proposed resolution which addresses all unresolved issue(s) in the case (taking into account all agreements previously reached in that case between the competent authorities). The proposed resolution shall be limited to a disposition of specific monetary amounts (for example, of income) or, where specified, the maximum amount of tax that may be charged pursuant to the provisions of the Convention, for each adjustment or similar issue in the case. In a case in which the competent authorities of the Contracting States have been unable to reach agreement on an issue regarding the conditions for application of a provision of the Convention (hereinafter referred to as a “threshold question”), such as whether an individual is a resident or whether a permanent establishment exists, the competent authorities may submit alternative proposed resolutions with respect to issues the determination of which is contingent on resolution of such threshold questions.

b) The competent authority of each Contracting State may also submit to the arbitrators and to the other competent authority, within the period of time provided for in subparagraph a), a supporting position paper for consideration by the arbitrators.

c) Each competent authority may also submit to the arbitrators and to the other competent authority, within 120 days after the appointment of the Chair of the arbitration panel, a reply submission with respect to the proposed resolution and supporting position paper submitted by the other competent authority.

d) As far as possible, the arbitrators will use tele- and videoconferencing to communicate between themselves and with both competent authorities. If a face-to-face meeting involving additional costs is necessary, the Chair will contact the competent authorities who will decide when and where the meeting should be held and will communicate that information to the arbitrators.

e) The arbitration panel shall select as its decision one of the proposed resolutions for the case submitted by the competent authorities with respect to each issue and any threshold questions, and shall not include a rationale or any other explanation of the decision. The arbitration decision will be adopted by a simple majority of the arbitrators. Unless the competent authorities agree otherwise, the arbitration decision shall be delivered to the competent authorities of the Contracting States in writing within 60 days after the reception by the arbitrators of the last reply submission or, if no reply submission has been submitted, within 150 days after the appointment of the Chair of the arbitration panel. The arbitration decision shall have no precedential value.

12. For the sole purposes of the application of the provisions of Articles 26 and 27 of the Convention, the provisions of this Article and the domestic laws of the Contracting States, concerning the communication and confidentiality of the information, as well as administrative assistance, related to the case that results in the arbitration process, each arbitrator and a maximum of three staff per arbitrator (and prospective arbitrators solely to the extent necessary to verify their ability to fulfil the requirements of arbitrators) shall be designated as authorised representatives of the competent authority that has apppointed that arbitrator or, if that arbitrator has not been appointed by a competent authority, of both competent authorities.

13. In designating a person as its authorised representative pursuant to paragraph 12, the competent authority of a Contracting State shall ensure that the person agrees in writing to treat any information relating to the arbitration proceeding consistently with the confidentiality requirements of the Convention and of the applicable laws of that Contracting State.

14. In the event that the decision has not been communicated to the competent authorities within the period provided for in subparagraph e) of paragraph 11, or within any other period agreed to by the competent authorities, the competent authorities may agree to appoint new arbitrators in accordance with paragraph 10. The date of such agreement shall, for the purposes of the subsequent application of paragraph 10, be deemed to be the date when the request for arbitration has been received by both competent authorities.

15. Where, at any time after a request for arbitration has been made and before the arbitrators have delivered a decision to the competent authorities, the competent authorities notify in writing the arbitrators

a) that they have solved all the unresolved issues that were subject to arbitration; or

b) that the person who presented the case has withdrawn the request for arbitration or the request for a mutual agreement procedure;

no arbitration decision shall be provided and the mutual agreement procedure shall be considered to have been completed.

16. Unless agreed otherwise by the competent authorities

a) each competent authority and the person who requested the arbitration will bear the costs related to his own participation in the arbitration proceedings (including travel costs and costs related to the preparation and presentation of his views);

b) each competent authority will bear the remuneration of the arbitrator appointed exclusively by that competent authority, or appointed by the highest ranking official of the Centre for Tax Policy and Administration of the Organisation for Economic Co-operation and Development that is not a national of either Contracting State because of the failure of that competent authority to appoint that arbitrator, together with that arbitrator’s travel, telecommunication and secretariat costs;

c) the remuneration of the Chair of the arbitration panel and that Chair’s travel, telecommunication and secretariat costs will be borne in equal shares by the two competent authorities;

d) other costs related to any meetings of the arbitration panel will be borne by the competent authority that hosts that meeting;

e) costs related to expenses that both competent authorities have agreed to incur, will be borne in equal shares by the two competent authorities.

17. Notwithstanding paragraph 1, a case may not be submitted to arbitration if

a) the case is connected with actions for which the taxpayer or a related person (or a person acting for either the taxpayer or a related person) has been found guilty by a court or has incurred substantial penalties for tax fraud, evasion, or avoidance;

b) the case involves the application of Ireland’s domestic anti-avoidance rules contained in sections 811 and 811A of the

Taxes Consolidation Act 1997

. Any subsequent provisions replacing, amending or updating these anti-avoidance rules would also be comprehended. Ireland shall notify the Netherlands through diplomatic channels of any such subsequent provisions;

c) the issue falls within the scope of a case with respect to which an arbitration panel or similar body has previously been set up in accordance with a bilateral or multilateral convention that provides for mandatory binding arbitration of unresolved issues arising from a mutual agreement procedure case.

18. The competent authorities shall implement the arbitration decision within 180 days of the communication of the decision to them by reaching a mutual agreement on the case that led to the arbitration.

Article 26

EXCHANGE OF INFORMATION

Notice of the making of this Statutory Instrument was published in

“Iris Oifigiúil” of

17

th September,

2019.

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