I move:
That Dáil Éireann approves the following Order in draft—
Double Taxation Relief (Sea or Air Transport) (Belgium) Order, 1969.
a copy of which Order in draft was laid before Dáil Éireann on the 28th day of February, 1969.
Double Taxation Relief (Sea or Air Transport) (Belgium) Order, 1969: Motion.
The Minister may move them as he goes along.
I will take all of them together.
Copies of the draft orders relating to an agreement with Belgium and conventions with Cyprus, Finland, France, Norway and The Netherlands were laid before Dáil Éireann on the dates mentioned in the motions which appear on the Order Paper.
The sea and air transport agreement with Belgium and the comprehensive conventions with Cyprus, Finland, France, Norway and The Netherlands have been signed on behalf of the respective Governments. Subsequent to the signing of the five conventions, White Papers relating to them were laid before both Houses of the Oireachtas by the Minister for External Affairs. This is a new departure and one which I feel is very desirable in the interests of letting Deputies and the public generally know the contents of a convention at an early date after it has been signed.
To give effect to all six arrangements, certain steps must first be taken under the laws of the countries concerned. 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, sur-tax, corporation profits tax and any taxes of a similar nature 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 must have been laid before Dáil Éireann and a resolution passed.
Deputies will find the texts of the agreement and conventions scheduled to the draft orders now before the House. For the convenience of Deputies, a separate memorandum has also been circulated with each draft order explaining the articles in greater detail.
The agreement and the five conventions will enter into force upon the exchange of instruments of ratification.
Before proceeding to describe briefly the six arrangements, I should mention that comprehensive conventions are currently in force with Austria, Canada, Denmark, Germany, Sweden, Switzerland, United Kingdom and the United States of America. Comprehensive conventions have been negotiated with Belguim, Italy and Luxembourg and I expect to be in a position to ask the Dáil to approve motions relating to those conventions in the near future. I might point out that when these conventions and those at present before the Dáil are in force we will then have double taxation arrangements with all the existing member States of the European Economic Community and the applicant countries.
The terms of the agreement with Belgium are similar to those in sea and transport agreements concluded with Norway, South Africa and Finland and its purpose is set out in article II. The agreement will be effective in respect of profits earned as from 1st January, 1950—the earliest date from which liability to tax might conceivably arise—and will continue in force indefinitely but it may be terminated at any time by the Government of either country on giving six months notice to the other Government. The agreement will, of course, be suspended on entry into force of the comprehensive convention which, as I have already said, has been negotiated.
The provisions of the conventions with Cyprus, Finland, France, Norway and The Netherlands are broadly similar to those contained in the conventions which this country has already concluded with other countries.
The convention with Cyprus will have effect in Ireland, as respects income tax and sur-tax, for 1962-63 and subsequent years of assessment, and, as respects corporation profits tax, for any accounting period beginning on or after 1st April, 1962, and for the unexpired portion of any accounting period current at that date. It will be effective in Cyprus for 1962 and subsequent years of assessment. The convention will continue in force indefinitely but may be terminated by either country giving notice of termination at least six months before the end of any calendar year after the year 1972.
The convention with Finland will have effect in Ireland, as respects income tax and sur-tax, for 1969-70 and subsequent years of assessment and, as respects corporation profits tax, for any accounting period beginning on or after 1st April, 1969, and for the unexpired portion of any accounting period current at that date. It will be effective in Finland, as respects taxes on income and capital, for 1969 and subsequent years. The convention provides for the suspension of the existing agreement between the two countries for the avoidance of double taxation of income derived from the business of sea and air transport. The convention will remain in force indefinitely but may be terminated by either country giving notice of termination at least six months before the end of any calendar year after the year 1973.
The convention with France will have effect in Ireland, as respects income tax and sur-tax, for 1966-67 and subsequent years of assessment and, as respects corporation profits tax, for any accounting period beginning on or after 1st April, 1966, and for the unexpired portion of any accounting period current at that date. In France, it will be effective from 1966 and subsequent years of assessment. The convention will continue in force indefinitely but may be terminated by either country giving notice of termination at least six months before the end of any calendar year after the year 1970.
The convention with Norway will have effect in Ireland, as respects income tax and sur-tax, for 1967-68 and subsequent years of assessment and, as respects corporation profits tax, for any accounting period beginning on or after 1st April, 1967 and for the unexpired portion of any accounting period current at that date. It will be effective in Norway for 1967 and subsequent years of assessment. The convention provides for the suspension, for the period which it is in force, of the existing agreement between the two countries for the avoidance of double taxation of income derived from the business of sea and air transport. The convention will remain in force indefinitely but may be terminated by either country giving notice of termination at least six months before the end of any calendar year after the year 1972.
The convention with The Netherlands will have effect in Ireland, as respects income tax and sur-tax, for 1965-66 and subsequent years of assessment and, as respects corporation profits tax, for any accounting period beginning on or after 1st April, 1965, and for the unexpired portion of any accounting period current at that date. It will be effective in The Netherlands, as respects taxes on income and capital, for 1965 and subsequent years of assessment. It will continue in force indefinitely but may be terminated by either country giving notice of termination at least six months before the end of any calendar year after the year 1973. I now move these orders and I would ask the Dáil to approve them.
I should like to support the Minister's proposal on the implementation of these orders. I take it we will enlarge fairly considerably the number of such agreements with outside countries. I do not know how many nationals of other countries will be affected by these agreements but I would assume—I have not studied them in detail and I have not the time now to go into the different agreements —that the object of these agreements would inter alia include the provision that the non-national engaged in industrial enterprise here would in relation to his own tax carry such reliefs as we would allow taxation to support, say, export reliefs. I take it that would be involved in the agreements because the object of these agreements must, of course, among other things, be to attract people from outside, by whatever tax concessions we can provide, to come in here and invest their money productively.
I should also like to support the proposal. Could the Minister say if this is a follow on from the agreements we had with Britain in 1920 and with America in 1950? The Minister mentions the 1st January, 1950, which is the date of the American agreement. Could he tell us if there was a particular reason for giving that date? The document which the Minister circulated gives very full information. I went through half of it, but I got bogged down. The information was there, however, if we wanted it. It appears to me that this may be a bit lopsided because some of these countries have a number of people here whilst we may not have any investment in these countries. I am thinking, for instance, of The Netherlands. I should like to know what way it could balance; do we win or lose on the transaction?
The principle is that nobody is going to be doubly taxed.
I am in favour of the principle, but my curiosity forced me to ask the question. Perhaps, the Minister could say roughly how the balance runs with each currency?
In regard to The Netherlands it is about equal.
I am amazed about that. We won heavily with the British one. During Question Time a few weeks ago I mentioned India to the Minister, and he was rather surprised. During the inter-Parliamentary conference in India we met a number of Irish people there who were very bitter about the fact that no effort had been made to try to introduce such an arrangement. Perhaps, the Minister could consider this in the months to come. If he looked into it he would find the number of Irish nationals there is very big and it would be of interest to them. There are certainly a few Indians here.
With regard to the balance my preliminary information is that for The Netherlands it would be half and half. The number of people involved on both sides would be about equal.
Are there tax incentives?
These are provided for. With regard to India oddly enough we have had no demand at all. These agreements are monumental efforts. It takes a great deal of complex discussion and negotiation to work them out. As the Deputy said, he got half way through them and he got tired. Whereever the greatest demand comes from, we try to deal with that next. I think the Deputy will agree it is very important that we get EEC countries tied up.
I wondered if the Minister would cover them.
Oddly enough, we have not had any demand but, now that the Deputy mentions it, we will keep it in mind certainly in the programme of work.
There is a socialist Prime Minister there now and the Minister might be able to make good progress.
Question put and agreed to.