Dáil Éireann Debate, Tuesday - 22 May 2012
239 Deputy Clare Daly asked the Minister for Finance if, in view of the fact that Ireland currently is a party to 63 double tax treaties, he will explain the way and the reason a State approaches another to begin to establish a double taxation Treaty; and if he will further explain the process by which a double tax treaty with Bahrain, Belarus, Georgia, and Serbia became part of foreign and economic policy. [25502/12]
Amharc ar fhreagraIreland has currently 66 signed double tax treaties, of which 59 are in effect. The principal purposes of these treaties are, first, to avoid double taxation which would otherwise arise as a result of each of the signatory countries separately taxing the same income or gains without relief for the tax paid in the other country and, second, to assist in preventing tax evasion. In addition, treaties prohibit the imposition of discriminatory tax burdens on Irish citizens and companies by treaty partner countries, on one hand, and on their nationals by Ireland, on the other. Preventing double, or discriminatory, tax burdens is not only important in the case of countries that are already major trading partners but also in facilitating the growth of trade with countries and regions offering new markets for Irish business.
The negotiation and agreement of bilateral treaties requires the other country to have the capacity to conduct tax treaty negotiations; to be willing to pursue mutually beneficial outcomes; and, most important, to be agreeable to initiate negotiations in the first instance. Not all countries, including some with significant domestic markets, pursue an active expansion of their double tax treaty network. For a small open economy, an extensive treaty network is a vital part of the legal infrastructure facilitating external trade. Ireland seeks to progressively reduce the possibility of existing, and potential, trading partners doubly taxing, or discriminating against, Irish individuals or companies.
While proposals to revise existing treaties may be made by officials dealing directly with tax matters, the initial approach to propose a new treaty is typically made through diplomatic channels. An extensive double tax treaty network is important for countries that are competing for inward investment and encouraging the expansion of indigenous business beyond relatively small domestic markets — more treaties ensure more tax certainty for enterprises basing operations in Ireland or growing indigenous operations. In seeking to expand the overall treaty network, opportunities to strengthen coverage of specific regions are also pursued. For example, negotiations with 7 middle-eastern countries have been undertaken in recent years. The treaties mentioned in the Deputy's question were negotiated to address regional coverage in the context of the general expansion of the Ireland's treaty network which has been a key business objective for Revenue and my Department in recent years.
240 Deputy Clare Daly asked the Minister for Finance the Luxembourg based operations that avail of the provisions present in its double taxation Treaty with Ireland. [25503/12]
Amharc ar fhreagraI am advised by the Revenue Commissioners that taxpayer confidentiality considerations preclude the release of the names of companies or other persons availing of the provisions of any double taxation treaty.
241 Deputy Clare Daly asked the Minister for Finance if, in view of the fact that after entering into double tax treaties with other countries, the terms of the appropriate treaty can ensure that income in respect of underlying assets acquired by a special purpose vehicle can be paid to it without any withholding or other taxes, he will explain the way this procedure can provide a significant advantage for Ireland over the use of tax haven jurisdictions. [25504/12]
Amharc ar fhreagraOne of the principal purposes of a double tax treaty is to prevent the taxation of the same income in both the countries concerned — typically, as in the case of Ireland's double tax treaties, by the elimination or reduction of withholding taxes. Tax havens are excluded from tax treaty networks.
