DFK UK & Ireland

Ireland Double Taxation Agreement Update

Ireland currently has double taxation agreements in force with 45 countries. The agreements generally cover income tax, corporation tax and capital gains tax (direct taxes).

Negotiating and revising Ireland’s double taxation agreements is an ongoing process for the Irish Revenue Commissioners. Often, the Department of Finance and the Department of Foreign Affairs are also involved with the negotiation process.

At the moment, negotiations for the revision of existing treaties with Cyprus, France, Germany, Italy, Korea and Pakistan are taking place and negotiations for new treaties have taken place with Albania, Argentina, Armenia, Egypt, Kuwait, Morocco, Serbia, Singapore, Tunisia, and Ukraine.

New treaties with Azerbaijan, Bosnia Herzegovina, Georgia, Malta, Moldova, Thailand, Turkey and for a Protocol to the existing treaty with South Africa have been concluded and are expected to be signed shortly.

A new treaty with Chile, which will be effective from 1 January 2009, came into force on 28 August 2008 and earlier in 2008 new treaties with Vietnam and Macedonia were signed. The legal procedures to bring these into force are currently being followed.

As well as double taxation agreements, the Revenue Commissioners are currently negotiating with a number of offshore tax havens with a view to establishing Tax Information Exchange Agreements (TIEA). These TIEAs would facilitate co-operation between Ireland and these territories in tax matters by exchanging relevant information.

At the moment, negotiations are taking place for the establishment of TIEAs with the Isle of Man, Jersey, Guernsey, the Cayman Islands and the British Virgin Islands. These TIEAs would further increase the information gathering abilities of the Revenue Commissioners in respect of Irish taxpayers with offshore assets.

The most significant of Ireland’s double taxation agreements from the point of view of Ireland’s trade with other countries, and indeed US multi-nationals with operations in Ireland is that between Ireland the United States. The current agreement was negotiated in 1997, when the economic environment in both jurisdictions was very different.

It has been reported that the US Treasury contacted the Irish government at the end of 2007 with a view to revising aspects of the double taxation agreement. This could be worrying news for those with trading links to the United States or even those with US income sources. It is felt that a revised Agreement may not be as favorable to Ireland as its predecessor.

However, with the change of administration in the United States, it is unlikely that any Agreement negotiations will take place before then and any effects are most likely a number of years away.

Contributed by: Edward Murphy
Crowleys DFK, Dublin & Cork
November 2008

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