This applies for corporation tax purposes the existing double taxation relief provisions as they at present apply for corporation profits tax purposes.
SECTION 22.
Question proposed: " That section 22 stand part of the Bill."
One of the reasons for urgency with this Bill is that certain reciprocal problems arises with our nearest neighbour. Is that correct?
Yes.
There may be the question of revision here but talking generally there are Schedules of the Income Tax Acts and double taxation agreements with other countries.
That is correctly described.
Are we to take it that there is nothing happening to defeat their normal operation as they are at the moment, pending revision? Have we one with France?
Yes.
I take it that at the moment there is no effective substantial change for a company in that regard. Naturally, you will seek to revise these arrangements. I think, as the Minister said yesterday, one of the great problems was to get international co-operation on tax evasion and tax uniformity. Would I be right in saying that there is nothing more involved in this section?
It has been correctly described by Deputy de Valera. The need for renegotiation will arise to cater for the tax treatment of tax credits and distributions. Fundamentally, the position is as described by Deputy de Valera.
Would I be correct in saying that in a sense this Bill as a whole and this section in particular is to put the Minister in a position to have his domestic base for such negotiations clear and correct?
Yes.
I take it in the structure of the Bill as a whole that due regard has been had to our commitments as a member of the European Community?
Yes.
In relation to the proviso to section 22 (1) which deals with the reciprocal arrangements arising in a double taxation agreement, the subsection of section 361 of the Income Tax Act deals with the question of waiving the need for secrecy. Might I make a suggestion that possibly might go to the Revenue Commissioners, that where that subsection has been availed of the taxpayer should be informed before that is done. I have had professional experience recently where that type of section was availed of in relation to another type of tax and a mistake had been made by the Revenue authorities in another country which had this double taxation agreement. The result was a great hold-up and misunderstanding in the taxation problems of the taxpayer in this country. The result was that possible interest was charged on the tax. If this was going to be availed of, the taxpayer should be informed so that he would be up-to-date with what is actually happening. It was a mistake made by the British revenue authorities under this type of structure which made difficulties for the Irish taxpayer. It is only fair that the Irish taxpayer be informed where this will occur.
There was nothing hidden but there was a bad blunder. I know this has happened on at least two occasions. I have had to deal with cases in the last couple of years where bad mistakes were made by the British authorities. It should be easy enough for the Revenue to inform the people who are paying the tax here that they are dealing with this section.
We will certainly take note of what the Chairman says. I imagine it is something that can be dealt with as a matter of practice, if the Revenue Commissioners thought it was proper or desirable to do so. Of course, if a conflict of information came to their notice they would be only too happy to discuss the matter with the taxpayer. If any correction was made to the information supplied they would, as a matter of practice, do it. There is, of course, a reciprocal flow of information. The information in any one tax authority in connection with any person should be the same as that in the other but of course, for various reasons, the timing of furnishing accounts and so on, there might be a variation. The Revenue Commissioners, offhand, are not aware of the lapse to which the Chairman refers.
These are two genuine cases where the unfortunate taxpayer was following one line and the Revenue Commissioners another line. They had been given a wrong lead by the other authority. So, if this is happening, it is only fair that the taxpayer be notified.
Question put and agreed to.