I move:
That Dáil Éireann approves the following Order in draft:
Double Taxation Relief (Sea or Air Transport) (Spain) Order, 1975,
a copy of which Order in draft was laid on the table of Dáil Éireann on the 18th day of November, 1975.
Copies of the draft order relating to the agreement with Spain for the avoidance of double taxation on income derived from the business of sea or air transport were laid before Dáil Éireann on 18th November, 1975.
The agreement has been signed on behalf of the respective Governments. Subsequent to the signing of the agreement the White Paper setting out the terms of the agreement was laid before both Houses of the Oireachtas by the Minister for Foreign Affairs.
In this country the law provides that an arrangment entered into with a foreign Government to afford relief from double taxation on sea or air transport income shall have the force of law here if the Irish Government makes an order accordingly. Prior to the making of such an order, however, a draft of the order must be laid before Dáil Éireann and a resolution passed approving it.
Deputies will find the text of the agreement scheduled to the draft order now before the House. For the convenience of Deputies, a separate memorandum has also been circulated with the draft order explaining the effect of the articles in the agreement.
The main object of this agreement is to exempt from the taxes on income of either country any profits arising to a resident of the other country from the business of sea or air transport. The agreement follows the general pattern of reciprocal arrangements of this type previously concluded with Belgium, Denmark, Finland, Norway, South Africa, Sweden and Switzerland. The effects of all of these agreements, with the exception of that concluded with South Africa, have been suspended as full double taxation conventions are in force with them.
The agreement provides for the exemption from Spanish tax of all income derived by Irish enterprises from the business of sea or air transport between Spain and other countries. It also provides for the reciprocal exemption from all taxes chargeable in Ireland of all income derived by Spanish enterprises from the business of sea or air transport between Ireland and other countries.
Under the agreement both countries give up the right to tax any interest or dividends payable out of the income of an enterprise of the other country from the operation of the business of sea or air transport unless the recipient is resident in the first country for that country's tax purposes. On the same basis the agreement secures that personal earnings of members of a board of administration of an enterprise of either of the States shall not be taxable in the other State unless the recipient is resident for tax purposes in that other State.
The agreement will come into force upon the exchange of instruments of ratification. It will then be effective in both countries in respect of income or profits derived on or after 1st January, 1969.
The agreement is to continue in force indefinitely but may be terminated at any time by either contracting party on giving six months' notice to the other contracting party.
