S.I. No. 41/2004 - Double Taxation Relief (Taxes on Income) (Adjustment of Profits of Associated Enterprises) (Republic of Austria, Republic of Finland and Kingdom of Sweden) Order 2004


WHEREAS it is enacted by section 826 (1) of the Taxes Consolidation Act 1997 (No. 39 of 1997), that if 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 and any taxes of a similar character imposed by the laws of the State or by the laws of that territory, and that it is expedient that those arrangements should have the force of law, then, subject to sections 826 and 835 of that Act, the arrangements shall, notwithstanding any enactment, have the force of law:

AND WHEREAS it is further enacted by section 826(6) of the above mentioned Act that where such an order is proposed to be made, a draft thereof 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) of the Taxes Consolidation Act 1997 (No. 39 of 1997), hereby order as follows:

1.  This Order may be cited as the Double Taxation Relief (Taxes on Income) (Adjustment of Profits of Associated Enterprises) (Republic of Austria, Republic of Finland and Kingdom of Sweden) Order 2004.

2.  It is hereby declared—

(a)  that by virtue of the Convention the text of which, excluding that of the Annexes thereto, is set out in the Schedule to this Order and which was entered into by the Governments of the Member States of the European Communities in relation to the accession of the Republic of Austria, the Republic of Finland and the Kingdom of Sweden (“the three States”) to the Convention on the elimination of double taxation in connection with the adjustment of profits of associated enterprises, opened for signature in Brussels on 23 July 1990, arrangements have been made with the three States in relation to affording relief from double taxation in respect of income tax or corporation tax and any taxes of a similar character, imposed by the laws of the State or by the laws of the three States, and

(b)  that it is expedient that those arrangements should have the force of law.

SCHEDULE

CONVENTION

on the accession of the Republic of Austria, the Republic of Finland and the Kingdom of Sweden to the Convention on the elimination of double taxation in connection with the adjustment of profits of associated enterprises

(96/C 26/01)

THE HIGH CONTRACTING PARTIES TO THE TREATY ESTABLISHING THE EUROPEAN COMMUNITY,

CONSIDERING that the Republic of Austria, the Republic of Finland and the Kingdom of Sweden, in becoming members of the Union, undertook to accede to the Convention on the elimination of double taxation in connection with the adjustment of profits of associated enterprises, opened for signature in Brussels on 23 July 1990,

HAVE DECIDED to conclude this Convention and to this end have designated as their Plenipotentiaries:

HIS MAJESTY THE KING OF THE BELGIANS:

Mr Philippe de SCHOUTHEETE de TERVARENT

Ambassador,

Permanent Representative of Belgium to the European Union;

HER MAJESTY THE QUEEN OF DENMARK:

Mr Poul SKYTTE CHRISTOFFERSEN

Ambassador,

Permanent Representative of Denmark to the European Union;

THE PRESIDENT OF THE FEDERAL REPUBLIC OF GERMANY:

Mr Jochen GRÜNHAGE

Deputy Permanent Representative of the Federal Republic of Germany to the European Union;

THE PRESIDENT OF THE HELLENIC REPUBLIC:

Mr Pavlos APOSTOLIDES

Ambassador,

Permanent Representative of the Hellenic Republic to the European Union;

HIS MAJESTY THE KING OF SPAIN:

Mr Francisco Javier ELORZA CAVENGT

Ambassador,

Permanent Representative of Spain to the European Union;

THE PRESIDENT OF THE FRENCH REPUBLIC:

Mr Pierre de BOISSIEU

Ambassador,

Permanent Representative of the French Republic to the European Union;

THE PRESIDENT OF IRELAND:

Mr Denis O’LEARY

Ambassador,

Permanent Representative of Ireland to the European Union;

THE PRESIDENT OF THE ITALIAN REPUBLIC:

Mr Luigi GUIDOBONO CAVALCHINI GAROFOLI

Ambassador,

Permanent Representative of the Italian Republic to the European Union;

HIS ROYAL HIGHNESS THE GRAND DUKE OF LUXEMBOURG:

Mr Jean-Jacques KASEL

Ambassador,

Permanent Representative of Luxembourg to the European Union;

HER MAJESTY THE QUEEN OF THE NETHERLANDS:

Mr Bernard R. BOT

Ambassador,

Permanent Representative of the Netherlands to the European Union;

THE FEDERAL PRESIDENT OF THE REPUBLIC OF AUSTRIA:

Mr Manfred SCHEICH

Ambassador,

Permanent Representative of the Republic of Austria to the European Union;

THE PRESIDENT OF THE PORTUGUESE REPUBLIC:

Mr José Gregório FARIA QUITERES

Ambassador,

Permanent Representative of the Portuguese Republic to the European Union;

THE PRESIDENT OF THE REPUBLIC OF FINLAND:

Mr Antti SATULI

Ambassador,

Permanent Representative of the Republic of Finland to the European Union;

THE GOVERNMENT OF THE KINGDOM OF SWEDEN:

Mr Frank BELFRAGE

Ambassador,

Permanent Representative of Sweden to the European Union;

HER MAJESTY THE QUEEN OF THE UNITED KINGDOM OF GREAT BRITAIN AND NORTHERN IRELAND:

Mr J. S. WALL C. M. G., L. V. O

Ambassador,

Permanent Representative of the United Kingdom of Great Britain and Northern Ireland to the European Union;

WHO, meeting within the Committee of Permanent Representatives of the Member States to the European Union and having exchanged their full powers, found in good and due form,

HAVE AGREED AS FOLLOWS:

ARTICLE 1

The Republic of Austria, the Republic of Finland and the Kingdom of Sweden hereby accede to the Convention on the elimination of double taxation in connection with the adjustment of profits of associated enterprises, opened for signature in Brussels on 23 July 1990.

ARTICLE 2

The Convention on the elimination of double taxation in connection with the adjustment of profits of associated enterprises is hereby amended as follows:

1.  In Article 2(2):

(a)  subparagraph (k) shall become subparagraph (l):

(b)  the following subparagraph (k) shall be added after subparagraph (j):

‘(k)  in Austria:

—  Einkommensteuer,

—  Körperschaftsteuer;’;

(c)  subparagraph (l) shall become subparagraph (o);

(d)  the following subparagraphs (m) and (n) shall be added after subparagraph (l):

‘(m)  in Finland:

—  valtion tuloverot/de statliga inkomstskatterna,

—  yhteisöjen tulovero/inkomstskatten för samfund,

—  kunnallisvero/kommunalskatten,

—  kirkollisvero/kyrkoskatten,

—  korkotulon lähdevero/källskatten å ränteinkomst,

—  rajoitetusti verovelvollisen lähdevero/källskatten för begränsat skattskyldig;

(n)  in Sweden:

—  statliga inkomstskatten,

—  kupongskatten,

—  kommunala inkomstskatten,

—  lagen om expansionsmedel;’.

2.  The following shall be added to Article 3(1):

‘—  in Austria:

Der Bundesminister für Finanzen or an authorized representative,

—  in Finland:

Valtiovarainministeriö or an authorized representative,

Finansministeriet or an authorized representative,

—  in Sweden:

Finansministern or an authorized representative;’.

ARTICLE 3

The Secretary-General of the Council of the European Union shall transmit a certified copy of the Convention on the elimination of double taxation in connection with the adjustment of profits of associated enterprises in the Danish, Dutch, English, French, German, Greek, Irish, Italian, Portuguese and Spanish languages to the Governments of the Republic of Austria, the Republic of Finland and the Kingdom of Sweden.

The text of the Convention on the elimination of double taxation in connection with the adjustment of profits of associated enterprises in the Finnish and Swedish languages is set out in Annexes I and II to this Convention.1 The texts drawn up in the Finnish and Swedish languages shall be authentic under the same conditions as the other texts of the Convention on the elimination of double taxation in connection with the adjustment of profits of associated enterprises.

ARTICLE 4

This Convention shall be ratified by the Contracting States. The instruments of ratification shall be deposited with the Secretary-General of the Council of the European Union.

ARTICLE 5

This Convention shall enter into force, as between the States which have ratified it, on the first day of the third month following the deposit of the last instrument of ratification by the Republic of Austria or the Republic of Finland or the Kingdom of Sweden and by one State which has ratified the Convention on the elimination of double taxation in connection with the adjustment of profits of associated enterprises.

This Convention shall enter into force for each Contracting State which subsequently ratifies it on the first day of the third month following the deposit of its instrument of ratification.

ARTICLE 6

The Secretary-General of the Council of the European Union shall notify the Contracting States of:

(a)  the deposit of each instrument of ratification;

(b)  the dates of entry into force of this Convention.

ARTICLE 7

This Convention, drawn up in a single original in the Danish, Dutch, English, Finnish, French, German, Greek, Irish, Italian, Portuguese, Spanish and Swedish languages, all 12 texts being equally authentic, shall be deposited in the archives of the General Secretariat of the Council of the European Union. The Secretary-General shall transmit a certified copy to the Governments of each Contracting State.

En fe de lo cual, los plenipotenciarios abajo firmantes suscriben el presente Convenio.

Til bekræftelse heraf har undertegnede befuldmægtigede underskrevet denne konvention.

Zu Urkund dessen haben die unterzeichneten Bevollmächtigten ihre Unterschriften unter dieses Übereinkommen gesetzt.

Σε πιστωση των ανωτερω, oι υπoγεγραμμενoι πληρεξoυσιoι υπεγραψαν την παρoυσα συμβαση.

In witness whereof the undersigned plenipotentiaries have signed this Convention.

En foi de quoi, les plénipotentiaries soussignés ont apposé leurs signatures au bas de la présente convention.

Dá fhianú sin, chuir na Lánchumhachtaigh thíos-sínithe a lámh leis an gCoinbhinsiún seo.

In fede di che, i plenipotenziari sottoscritti hanno apposto le loro firme in calce alla presente convenzione.

Ten blijke waarvan de ondergetekende gevolmachtigden hun handtekening onder dit Verdrag hebben gesteld.

Em fé do que, os plenipotenciários abaixo-assinados apuseram as suas assinaturas no final da presente convenção.

Tämän vakuudeksi alla mainitut täysivaltaiset edustajat ovat allekirjoittaneet tämän sopimuksen.

Som bekräftelse på detta har undertecknade befullmäktigade ombud undertecknat denna konvention.

Hecho en Bruselas, el veintiuno de diciembre de mil novecientos noventa y cinco.

Udfærdiget i Bruxelles, den enogtyvende december nitten hundrede og femoghalvfems.

Geschehen zu Brüssel am einundzwanzigsten Dezember neunzehnhundertfünfundneunzig.

‘Eγινε στιζ Bρυξελλεζ, στιζ ειχoσι μια Δεχεμβριoν χιλια εννιαχoσια ενενηντα πεντε.

Done at Brussels on the twenty-first day of December in the year one thousand nine hundred and ninety-five.

Fait à Bruxelles, le vingt et un décembre mil neuf cent quatre-vingt-quinze.

Arna Dhéanamh sa Bruiséil, an t-aonú lá is fiche de Nollaig sa bhliain míle naoi gcéad nócha a cúig.

Fatto a Bruxelles, addì ventuno dicembre millenovecentonovantacinque.

Gedaan te Brussel, de eenentwintigste december negentienhonderd vijfennegentig.

Feito em Bruxelas, em vinte e um de Dezembro de mil novecentos e noventa e cinco.

Tehty Brysselissä kahdentenakymmenentenäensimmäisenä päivänä joulukuuta vuonna tuhatyhdeksänsataayhdeksänkymmentäviisi.

Som skedde i Bryssel den tjugoförsta december nittonhundranittiofem.

Pour le royaume de Belgique

Voor het Koninkrijk België

Für das Königreich Belgien

Philippe de Schoutheete de Tervarent

På Kongeriget Danmarks vegne

Poul Skytte Christoffersen

Für die Bundesrepublik Deutschland

Jochen Grünhage

Για την Eλληνιχη Δημoχρατια

Pavlos Apostolides

Por el Reino de España

Francisco Javier Elorza Cavengt

Pour la République française

Pierre de Boissieu

Thar ceann na hÉireann

For Ireland

Denis O’Leary

Per la Repubblica italiana

Luigi Guidobono Cavalchini Garofoli

Pour le grand-duché de Luxembourg

Jean-Jacques Kasel

Voor het Koninkrijk der Nederlanden

Bernard R. Bot

Für die Republik Österreich

Manfred Scheich

Pela República Portuguesa

José Gregório Faria Quiteres

Suomen tasavallan puolesta

Antti Satuli

För Konungariket Sverige

Frank Belfrage

For the United Kingdom of Great Britain and Northern Ireland

J. S. Wall C. M. G., L. V. O

MINUTES OF SIGNING

of the Convention on the accession of the Republic of Austria, the Republic of Finland and the Kingdom of Sweden to the Convention on the elimination of double taxation in connection with the adjustment of profits of associated enterprises.

The Plenipotentiaries of the Kingdom of Belgium, the Kingdom of Denmark, the Federal Republic of Germany, the Hellenic Republic, the Kingdom of Spain, the French Republic, Ireland, the Italian Republic, the Grand Duchy of Luxembourg, the Kingdom of the Netherlands, the Republic of Austria, the Portuguese Republic, the Republic of Finland, the Kingdom of Sweden and the United Kingdom of Great Britain and Northern Ireland have, on 21 December 1995 in Brussels, signed the Convention on the accession of the Republic of Austria, the Republic of Finland and the Kingdom of Sweden to the Convention on the elimination of double taxation in connection with the adjustment of profits of associated enterprises.

On this occasion they have taken note of the following unilateral Declarations on Article 8 of the Convention on the elimination of double taxation in connection with the adjustment of profits of associated enterprises:

Declaration by the Republic of Austria:

An infringement punishable by a ‘serious penalty’ is constituted by any intentional or negligent evasion of tax or duty that is penalized under the law on tax offences.

Declaration by the Republic of Finland:

The term ‘serious penalties’ includes criminal sanctions and such administrative sanctions which are imposed in respect of the breach of tax laws.

Declaration by the Kingdom of Sweden:

An infringement of the tax laws punishable by a ‘serious penalty’ is constituted by an infringement of the tax laws penalized by detention, criminal or administrative fines.

These minutes are to be published in the Official Journal of the European Communities.

Hecho en Bruselas, el veintiuno de diciembre de mil novecientos noventa y cinco.

Udfærdiget i Bruxelles, den enogtyvende december nitten hundrede og femoghalvfems.

Geschehen zu Brüssel am einundzwanzigsten Dezember neunzehnhundertfünfundneunzig.

‘Eγινε στιζ Bρυξελλεζ, στιζ ειχoσι μια Δεχεμβριoν χιλια εννιαχoσια ενενηντα πεντε.

Done at Brussels on the twenty-first day of December in the year one thousand nine hundred and ninety-five.

Fait à Bruxelles, le vingt et un décembre mil neuf cent quatre-vingt-quinze.

Arna Dhéanamh sa Bruiséil, an t-aonú lá is fiche de Nollaig sa bhliain míle naoi gcéad nócha a cúig.

Fatto a Bruxelles, addì ventuno dicembre millenovecentonovantacinque.

Gedaan te Brussel, de eenentwintigste december negentienhonderd vijfennegentig.

Feito em Bruxelas, em vinte e um de Dezembro de mil novecentos e noventa e cinco.

Tehty Brysselissä kahdentenakymmenentenäensimmäisenä päivänä joulukuuta vuonna tuhatyhdeksänsataayhdeksänkymmentäviisi.

Som skedde i Bryssel den tjugoförsta december nittonhundranittiofem.

Pour le royaume de Belgique

Voor het Koninkrijk België

Für das Königreich Belgien

Philippe de Schoutheete de Tervarent

På Kongeriget Danmarks vegne

Poul Skytte Christoffersen

Für die Bundesrepublik Deutschland

Jochen Grünhage

Για την Eλληνιχη Δημoχρατια

Pavlos Apostolides

Por el Reino de España

Francisco Javier Elorza Cavengt

Pour la République française

Pierre de Boissieu

Thar ceann na hÉireann

For Ireland

Denis O’Leary

Per la Repubblica italiana

Luigi Guidobono Cavalchini Garofoli

Pour le grand-duché de Luxembourg

Jean-Jacques Kasel

Voor het Koninkrijk der Nederlanden

Bernard R. Bot

Für die Republik Österreich

Manfred Scheich

Pela República Portuguesa

José Gregório Faria Quiteres

Suomen tasavallan puolesta

Antti Satuli

För Konungariket Sverige

Frank Belfrage

For the United Kingdom of Great Britain and Northern Ireland

J. S. Wall C. M. G., L. V. O

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GIVEN under the Official Seal of the Government, this 27th day of January, 2004.

BERTIE AHERN,

Taoiseach.

EXPLANATORY NOTE.

(This note is not part of the Instrument and does not purport to be a legal interpretation.)

This Order gives the force of law in Ireland to the admission to the Convention between the member states of the European Communities on the elimination of double taxation in connection with the adjustment of profits of associated enterprises of the three newest members of the European Communities being Austria, Finland and Sweden. The original Convention is contained in S.I. No. 88 of 1994 .

The original Convention provides for a mutual agreement procedure between tax authorities where double taxation has occurred. Where this procedure fails to resolve disputes, it provides for referral to an independent arbitration commission.

The double taxation referred to is that which might arise when tax authorities adjust for tax purposes the profits declared by enterprises where such profits result from transactions between associated enterprises in different Member States, and these transactions were at prices which differ from those which would normally apply between independent enterprises. The adjustment of profits may result in an increased tax bill for one of the enterprises and double taxaction would occur when the tax authorities of the Member State in which the other enterprise is situated do not make a corresponding reduction in the taxable profits of that other enterprise.

The mutual agreement or arbitration procedure applies in such cases. The taxes which are within the scope of the original Convention are specified, and the tax authorities in the Member States are also identified in same. If a company considers that there is double taxation, it may present its case to its tax authority within three years of the event. If the tax authority considers the case to be well-founded and cannot resolve it, it is obliged to attempt to resolve it by mutual agreement with the tax authority of the other Member State. If agreement cannot be reached within two years the tax authorities are required to seek from the arbitration commission an opinion as to how the tax should be eliminated. If the two tax authorities do not agree on a resolution of the case within six months of receipt of the commission’s opinion they are obliged to accept the opinion of the commission. The commission is empowered to request information from the undertakings and from the tax authorities. Safeguards with regard to confidentiality and secrecy are provided.

The present Convention which admits the three new member states will become operative on the first day of the third month after the final instrument of ratification by Austria, Finland or Sweden, and by one state which has ratified the 1994 convention, has been deposited with the Secretary-General of the Council of the European Communities.

1The texts of those Annexes are set out in the Official Journal, O.J. No. C 26 of 31.1.1996, pages 8 to 29.