I move:
That Dáil Éireann approves the following Order in draft:
Double Taxation Relief (Taxes on Income and Capital) (Royal Danish Government) Order, 1964
a copy of which order in draft was laid on the table of Dáil Éireann on the 23rd day of June, 1964.
This motion relates to the implementation in Irish law of a comprehensive Convention with the Royal Danish Government for the avoidance of double taxation of income and capital. The Convention has been signed on behalf of the Irish and Royal Danish Governments but, before it can enter into force, the necessary steps must have been taken under the law of both countries to give effect to it.
In this country the law provides that an arrangement entered into with a foreign Government to afford relief from double taxation in respect of income tax, surtax, corporation profits tax and any taxes of a similar character shall have effect here if the Irish Government makes an Order accordingly. Prior to the making of such an Order, however, a draft must be laid before Dáil Éireann and a resolution passed approving it.
Deputies will find the text of the Convention scheduled to the draft Order. The usual brief explanatory note is appended at the end of the Order, but, for convenience, a separate memorandum has also been circulated which explains in greater detail each of the articles in the Convention.
The Convention follows the general pattern of modern double taxation agreements and incorporates as far as possible articles based on the models drawn up by the Fiscal Committee of the OECD. Apart from certain matters of detail, its provisions are similar to those contained in the agreements which this country has concluded with the United States, Canada, Sweden and the Federal Republic of Germany.
The Convention will help to promote the development of trade between Ireland and Denmark and should encourage the investment of Danish capital in this country. As pointed out in the explanatory memorandum in connection with Article XXIII, in Ireland, Danish income tax suffered will be allowed as a credit against the Irish tax payable in respect of the relevant Danish income. In Denmark the deduction to be allowed is one equal to the amount of Danish tax appropriate to Irish income. The deduction which will be allowed by the Danish authorities will be computed without regard to the amount of Irish tax actually borne on the relevant income and, therefore, the benefit of the Irish incentive reliefs will be preserved for Danish interests.
The Convention will enter into force upon the exchange of instruments of ratification. It will continue in effect indefinitely but may be terminated by either Party by giving written notice not earlier than 30th June, 1965. Upon entry into force, the Convention will have effect in Ireland—
(a) in respect of income tax for the year of assessment 1961-62 and subsequent years;
(b) in respect of surtax for the year of assessment 1960-61 and subsequent years; and
(c) in respect of corporation profits tax for any chargeable accounting period beginning on or after the 1st April, 1961, and for the unexpired portion of any chargeable accounting period current at that date.
