Income Tax Act, 1967.

Treatment of dividends for double taxation relief in certain cases.

363.—(1) In this section—

“dividend” means a dividend from which deduction of tax is authorised by section 456;

“the company” means a body of persons paying a dividend;

“double taxation relief” means any credit for tax (other than British income tax) payable in any territory outside the State, which is allowable against Irish income tax by virtue of section 357 or of any international agreement having the force of law, including any such credit which has been taken into account in relation to any dividends receivable by the company;

“the reduced Irish rate” means the rate of Irish income tax payable directly or by deduction by the company after taking double taxation relief into account.

(2) (a) Notwithstanding anything in this Act, no relief or repayment in respect of the tax deducted or authorised to be deducted from any dividend shall, in a case in which there is double taxation relief, be allowed at a rate exceeding the reduced Irish rate.

(b) Where the reduced Irish rate falls to be computed in relation to a dividend, the particulars to be given by the company in the statement required by sections 457 and 458 shall (in addition to the particulars required to be given apart from this section) include particulars of the reduced Irish rate.

(3) Where (whether before or after the passing of this Act) a dividend has been paid before the making by the Government of an order to which section 361 (1) relates, and any double taxation relief would have fallen to be taken into account in relation to that dividend if this section had applied thereto, that relief shall be taken into account as far as possible in determining the reduced Irish rate in relation to the first dividend payable by the company after the making of the order, and any part of that relief which cannot be so taken into account shall as far as possible be taken into account in relation to the next succeeding dividend, and so on.

(4) Where the whole or any part of any annual payment is payable out of a dividend, and the rate of relief or repayment allowable in respect of the tax deducted or authorised to be deducted from the dividend is affected by double taxation relief, the annual payment, or that part thereof, as the case may be, shall be deemed to be paid out of profits or gains not brought into charge to tax and section 434 shall apply accordingly, but the tax recoverable under section 434 from the person making the payment shall be reduced by an amount equal to tax on the payment or part of the payment at the reduced Irish rate applicable to the dividend.