Tax Treaties

Ireland has signed comprehensive Double Taxation Agreements with 72 countries; 70 of these are in effect – the new Agreements with Botswana and Ethiopia are not yet in effect. The Agreements cover direct taxes which in the case of Ireland are income tax, universal social charge, corporation tax and capital gains tax.

pdfCommentary on typical provisions of Irish tax treaties (PDF, 71KB)

The following is a summary of the work underway to negotiate new Double Taxation Agreements and to update existing Agreements:

  • A Double Taxation Agreement to replace the existing Agreement with Zambia was signed on 31 March 2015 and ratified by Ireland on 21 December 2015; the Agreement entered into force on 23 December 2015 and into effect on 1 January 2016.
  • A Double Taxation Agreement to replace the existing Agreement with Pakistan was signed on 16 April 2015 and ratified by Ireland on 21 December 2015; when notification of the completion of ratification procedures by Pakistan is received, the Agreement will enter into force.
  • A Protocol to the existing Double Taxation Agreement with Germany was signed on 3 December 2014 and ratified by Ireland on 21 December 2015. The Protocol entered into force on 30 December 2015 and into effect on 1 January 2016.
  • A Protocol to the existing Double Taxation Agreement with Luxembourg, which was signed on 27 May 2014, entered into force on 11 December 2015 and into effect on 1 January 2016.
  • The new Double Taxation Agreement with Thailand, which was signed on 4 November 2013, entered into force on 11 March 2015 and into effect on 1 January 2016.
  • The new Double Taxation Agreement with Ukraine, which was signed on 19 April 2013, entered into force on 17 August 2015 and into effect on 1 January 2016.
  • The new Double Taxation Agreement with Botswana, which was signed on 10 June 2014, entered into force on 3 February 2016.  It will enter into effect in Ireland on 1 January 2017.
  • The new Double Taxation Agreement with Ethiopia, which was signed on 3 November 2014, entered into force on 12 August 2016. It will enter into effect in Ireland on 1 January 2017
  • Ireland has completed the ratification procedures to bring the Protocol to the existing Agreement with Belgium into force. When notification of the completion of ratification procedures by Belgium is received, the Protocol will enter into force.
  • Negotiations for new Double Taxation Agreements with Azerbaijan, Ghana, Kazakhstan and Turkmenistan and for a Protocol to the existing Double Taxation Agreement with Mexico have concluded; these are expected to be signed shortly.
  • Negotiations for a new Double Taxation Agreement with Oman and a Protocol to the existing Agreement with South Africa are at various stages.
  • Negotiations for a replacement Double Taxation Agreement with the Netherlands are ongoing.

Plans to initiate negotiations for new Double Taxation Agreements with other countries during 2016 are ongoing.

Where a Double Taxation Agreement does not exist with a particular country there are provisions in the Irish Taxes Consolidation Acts (TCA) 1997 which allow unilateral relief against double taxation in respect of certain types of income. The principal provisions granting unilateral relief are as follows:

  • dividends from foreign subsidiaries:
    • credit for withholding tax on dividend payments and for foreign tax paid on the underlying profits out of which the dividends were paid (paragraph 9A and B of Schedule 24 TCA 1997)
    • pooling and carry-forward of excess foreign tax credits (paragraph 9E of Schedule 24 TCA 1997)
    • credit for foreign tax on dividends paid by a foreign company that is a member of a group that paid tax on a consolidated basis (paragraph 9G of Schedule 24 TCA 1997)
  • foreign branch profits:
    • credit for foreign tax paid by an Irish company on profits of a foreign branch (paragraph 9DA of Schedule 24 TCA 1997)
    • pooling of excess foreign branch tax credits (paragraph 9FA of Schedule 24 TCA 1997)
  • foreign interest treated as trading income of the company that receives it:
    • credit for foreign tax (paragraph 9D of Schedule 24 TCA 1997)
    • pooling of excess foreign tax credits in respect of interest received from associated companies in countries with which Ireland has a double taxation agreement (paragraph 9F of Schedule 24 TCA 1997)
  • capital gains on foreign assets:
    • credit for foreign tax paid on capital gains in countries with which Ireland has a double taxation agreement but where the tax treaty with that country does not cover capital gains tax – Belgium, Cyprus, France, Italy, Japan, Luxembourg, Netherlands, Pakistan and Zambia (paragraph 9FB of Schedule 24 TCA 1997)
    • exemption from tax of capital gains from disposal of shares in foreign trading subsidiary companies resident in an EU or Irish tax agreement country (section 626B TCA 1997)

There are also reliefs granted under the EU "Parent-Subsidiaries Directive" (90/435/EEC) (section 831 TCA 1997), the EU "Interest and Royalties Directive" (2003/49/EC)(section 267G-L TCA 1997), the "EU Mergers Directive" (90/434/EEC) (sections 630-638 TCA 1997) and the EU Arbitration Convention (European Communities Mutual Assistance in the Field of Direct Taxation Regulations 1978) (S.I. 334 of 1978).

The list of Irish double taxation agreements is as follows: (Click on a specific country link to view or download the text of the agreement).

Disclaimer: In the event of any discrepancy between the text obtained from this website and the text in the relevant Statutory Instrument (SI), the text in the SI is the authoritative one. Ireland's tax treaties and their SI numbers

 

 

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