asked the Minister for Finance if the owners of fishing trawlers of whatever nationality operating within Irish territorial waters are liable to Irish tax in respect of profits arising from catches made in these waters; and, if not, if he will introduce legislation to impose such liability.
Ceisteanna—Questions. Oral Answers. - Fish Profits Tax.
21.
Owners of fishing trawlers who are resident in the State are liable to tax on their total profits whether those profits arise from operations within the three-mile limit which constitutes Irish territorial waters or outside that zone. Foreign trawler owners are not permitted to fish within the sixmile limit and accordingly the question of imposing a charge to Irish tax on such owners in respect of profits derived from catches within that area does not arise.
The Deputy may, however, be concerned with catches made in the fishing zone ranging from six miles to 200 miles off our coast. As he is aware, this zone is outside our tax jurisdiction and, because entitlement to fishing rights within it is at present the subject of discussion in the EEC, it would be premature at this stage to consider the introduction of fiscal legislation with respect to it.
The Deputy will appreciate that most of the fishermen likely to fish in this zone are nationals of countries, including other member countries of the EEC, with which this country has concluded double taxation agreements. These agreements provide on a reciprocal basis that the profits of an enterprise resident in a partner country are taxable only in that country unless the enterprise carries on business in Ireland through a permanent establishment situated in Ireland. The term permanent establishment does not include a fishing vessel. The agreements in question are given the force of law by Government order under section 361 of the Income Tax Act, 1967, and follow the lines of the internationally agreed OECD model. As provided for in section 361, these agreements have effect notwithstanding anything in any enactment. Because these agreements take precedence over ordinary domestic law they would negative any legislation introduced with the object of imposing a charge to Irish tax on trawler owners of partner countries who fish in the zone from six to 200 miles off our coast and who do not maintain permanent establishments in this country.
Three-fourths of the Minister's reply was devoted to answering a question which I did not ask. That may have been an excess of courtesy on his part. Does he not realise that it is intended under existing arrangements that foreign fishing trawlers will be fishing right up to the Irish coast in a short while? I want to know when they are fishing in Irish territorial waters, which in law is the same as land, will the Minister consider applying the same taxation arrangements to them as apply to Irish trawlers, notwithstanding double taxation agreements?
(Interruptions.)
Order.
Would the Deputy repeat his question please?
In view of the fact that it is envisaged that trawlers which belong to nationals of our partner states in the EEC will be fishing in a short while right up to the Irish coast, would he not agree that there is room for considering the taxation of them on the same basis as Irish trawlers are taxed notwithstanding that they do not reside within the jurisdiction? Would he agree that there is a case for arguing, and possibly for enacting, an equivalence along the lines that if they are extracting fish from the sea they are doing so in a way which is analogous to extracting ore or minerals from land?
I agree that there would be a case but unfortunately I have not got the information here.
I do not want to press the Minister on that matter if he has not got the information. I ask him to put out of his mind everything about the 200-mile zone. I did not ask about that. I am asking about the possibility of treating foreign trawlers—as the Minister knows, they are largely much bigger and more damaging to fish stocks than our trawlers are—for tax purposes exactly the same as we treat our trawler owners when they fish in Irish territorial waters?
I will bring this matter to the notice of the Minister for Finance.
Could the Minister tell us the extent of our territorial waters?
I have taken note of what Deputy Kelly said.