That Dáil Éireann approves the following Order in draft:
Double Taxation Relief (Taxes on Income and Capital Gains) (Republic of Ghana) Order 2018,
a copy of which was laid before Dáil Éireann on 14th September, 2018.”
The motion seeks Dáil Éireann's approval for an order as part of the ratification of a double taxation agreement with Ghana. In 2012, officials from the Republic of Ghana raised with the Department of Foreign Affairs and Trade the possibility of negotiating a double tax agreement with Ireland. Ghana had earlier been identified by the Department of Foreign Affairs and Trade as one of four strategic partners for a tax treaty to advance Ireland's prosperity by promoting our economic links internationally. Negotiations on the agreement started in 2014 and were successfully concluded in early 2016. The agreement was then signed by both Ireland and Ghana on 7 February 2018. Ghana requested that Ireland enter into negotiations for this agreement. The Ghanaian authorities have decided that double taxation agreements are good for their country's economic development and this is the 17th treaty that they have signed.
The agreement was negotiated by both countries in good faith and on an equal footing. The final agreement includes a number of provisions that Ghana requested that are not typical of Ireland's tax treaties. These include a number of clauses from the UN model convention, which developing countries like Ghana sometimes, but not always, seek to include. For example, Ireland agreed to the inclusion of the imposition of withholding tax on technical fees at the request of Ghana. In addition, to encourage the development of education in Ghana, there is a two-year tax exemption for teachers and researchers who work in a higher educational establishment in Ghana.
It is very important to consider the impact of domestic and global taxation rules on developing countries. Ireland is one of only two developed countries to carry out a comprehensive spillover analysis on the impact of our tax system on developing countries' economies. This research project was commissioned by the Department of Finance and the methodology was designed and carried out by the independent and highly respected International Bureau of Fiscal Documentation. It concluded that there was no negative spillover from the Irish tax regime, or Ireland's modern tax treaties, on the economies of developing countries. In the past, two old tax agreements with developing countries were found not to be sufficiently beneficial to those developing countries. Those agreements, which were with Zambia and Pakistan, dated back to the 1970s and they have been replaced by new agreements. There is simply no comparison between those agreements from more than 40 years ago and the agreement being debated today.
I wish to respond directly to some of the questions raised at the committee discussion on this proposal last week. I was asked why the agreement does not include the BEPS measures included in the multilateral convention which the House has just discussed. As I said at the committee hearing, negotiations on the treaty with Ghana concluded in early 2016. At that time, the drafting of the multilateral convention was still a work in progress and, consequently, neither Ireland nor Ghana was in a position to discuss the provisions. The text on how to translate the BEPS measures into property treaty provisions was not yet agreed. Ireland's position on the multilateral convention makes clear that this agreement will be automatically updated as soon as both Ireland and Ghana ratify the convention. As Ghana has not signed up to the convention to date, Ireland has contacted Ghana's tax authorities proposing a bilateral protocol to the treaty if that is Ghana's preferred way to implement the anti-BEPS measures. In July 2018, Ghana's authorities replied saying to say that they are considering the best way forward for Ghana on this matter.
Comments were also made at the committee to the effect that this agreement is somehow a bad deal for Ghana. With respect, I do not agree. It represents an appropriate agreement similar to other agreements entered into by both countries. The Ghanaian authorities have not raised any concerns with us regarding the agreement. I commend the motion to the House.