1 Tax Treaties and Residence
1.1 How many income tax treaties are currently in force in your jurisdiction?
As of September 2019, 74 treaties have been signed, 73 of which are in force.
1.2 Do they generally follow the OECD Model Convention or another model?
Generally speaking, they follow the OECD Model.
1.3 Do treaties have to be incorporated into domestic law before they take effect?
Yes, but a number of Irish domestic provisions, including certain exemptions from withholding tax, take effect immediately when a treaty is signed.
1.4 Do they generally incorporate anti-treaty shopping rules (or "limitation on beneﬁts" articles)?
No, other than in respect of certain treaties, such as the treaty with the US.
Additionally, the OECD's Base Erosion and Project Shifting ("BEPS") project recommended that members include in their double tax treaties a limitation-on-benefits test and/or a principal purpose test ("PPT") as a condition for granting treaty relief. This recommendation will be implemented by means of a multilateral instrument ("MLI").
The MLI is to be applied alongside existing tax treaties (rather than amending them directly), modifying the application of those existing treaties in order to implement BEPS measures. The first high-level signing ceremony for the Multilateral Instrument took place on 7 June 2017. The United Kingdom and Ireland signed the Multilateral Instrument with both countries indicating that the double tax treaty entered into between the United Kingdom and Ireland is to be designated as a Covered Tax Agreement ("CTA"), being a tax treaty that is to be modified by the Multilateral Instrument.
1.5 Are treaties overridden by any rules of domestic law (whether existing when the treaty takes effect or introduced subsequently)?
No, Irish double tax treaties prevail over domestic law. As noted under question 1.3, certain domestic exemptions mirror the treaty relief, and indeed may be more favourable, and apply before a treaty comes into force.
1.6 What is the test in domestic law for determining the residence of a company?
A company is resident in Ireland if it is incorporated in Ireland or, if not Irish-incorporated, is centrally managed and controlled in Ireland. This latter test is based on case law and focuses on board control, but is a question of fact based on how decisions of the company are made in practice.
If a company incorporated in Ireland is managed and controlled in a treaty state, it may be regarded as resident in that other state under the "tie-breaker" clause of Ireland's double taxation treaty ("DTT") with that state.
2 Transaction Taxes
2.1 Are there any documentary taxes in your jurisdiction?
Generally, a document is chargeable to stamp duty, unless exempt, where the document is both:
- listed in Schedule 1 to the Irish Stamp Duties Consolidation Act 1999 (the principal head of charge is a transfer of any Irish property); and
- executed in Ireland or, if executed
outside Ireland, relates to property situated in Ireland or to any
matter or thing done or to be done in Ireland.
The transferee is liable to pay stamp duty and a return must be filed, and stamp duty paid, within 44 days of the execution of the instrument.
Stamp duty is charged on the higher of the consideration paid for, or the market value of, the relevant asset at the following rates:
- Shares or marketable securities: 1%.
- Non-residential property: 6%.
- Residential property: 1% on
consideration up to €1 million and 2% on the excess.
There are numerous reliefs and exemptions including:
- Group relief on transfers between companies where the transferor and transferee are 90% associated at the time of execution and for two years afterwards.
- Reconstruction relief on a share-for-share exchange or share-forundertaking transaction, subject to meeting certain conditions.
- Exemptions for transfers of intellectual property, non-Irish shares and land, loan capital, aircrafts and ships.
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