Finance (No.2) Act 2008 and Double Taxation Relief
Section 33 Finance (No. 2) Act 2008 provides for a relaxation in the requirement that there be a tax treaty ratified and in force with the relevant foreign country in relation to a number of provisions in the Taxes Consolidation Act 1997 that grant preferential treatment for dividend and interest payments to and from treaty countries and for capital gains tax exemption for gains from disposals of foreign company shares.
The new position as provided by Section 33 Finance (No. 2) Act 2008 is that the requirement that a tax treaty must be ratified and in force for the preferential treatment to apply is replaced by a requirement that once a tax treaty has been signed by both Ireland and the treaty partner country, then companies can avail of these domestic reliefs.
The provisions involved typically deal with granting exemption from Irish tax on payments by Irish companies to non-resident recipients of dividends and interest and favourable tax treatment of such payments when received by Irish companies from foreign sources. Exemption from capital gains tax is also provided for in respect of gains from disposals of foreign company shares.
The sections of the Taxes Consolidation Act 1997 that the above provisions apply to are as follows;
- Section 21B - Tax Treatment of Certain Dividends
- Section 153(1) - Distributions to non-residents
- Section 172 - Dividend Withholding Tax
- Section 198 - Certain interest not to be chargeable
- Section 246 - Interest payments by companies to non-residents
- Section 452 - Application of section 130 to certain Interest
- Section 626B - Exemption from capital gains tax on certain disposals of shares
- Schedule 24(9F) - Treatment of Foreign Tax