Following discussions which were initiated some years previously, two double taxations conventions with the Government of the United States of America were signed on 13th September, 1949. One of these conventions related to double estate tax, while the other was concerned with double income tax. Somewhat prematurely perhaps in view of the powers of the United States Senate, both were scheduled to the Finance Act, 1950, and, because of that, I think it desirable to inform the Dáil of developments which have since taken place.
With a view to receiving the advice and consent of the Senate of the United States to ratification, the President of the United States transmitted the conventions to the Senate. The United States Senate has approved a resolution advising and consenting to the ratification of the convention with respect to estate tax without reservation. As regards the double income-tax convention, however, the position is somewhat different. The United States Senate has approved a resolution recommending the ratification of that convention, subject to reservations and these reservations amount to the elimination of two articles, videlicet, Articles 14 and 16. Article 14 relates to the exemption of residents of Ireland from the United States tax on capital gains and Article 16 relates to the exemption of Irish corporations from the United States tax on accumulated or undistributed profits.
The matter has been considered and we do not think the issues involved in the deletion of these articles which relate to the American tax law are of sufficient material importance to prevent us from ratifying the convention with the deletions and securing its benefits for our residents in this year. It is proposed accordingly to ratify the double income-tax convention, subject to the elimination of the articles to which I have referred, videlicet Articles 14 and 16, and I assume that there will be no objection to that course.
