Ireland And Turkey Sign Double Tax Convention
A Convention on the avoidance of double taxation and prevention of fiscal evasion
between Ireland and Turkey was signed in Dublin on Friday. The Irish Minister for Finance, Brian Lenihan signed the agreement with his
Turkish counterpart Kemal Unakitan. Commenting on the signing, Lenihan said: “The signing of this Convention
completes Ireland’s network of bilateral tax agreements with all OECD
countries. The Convention represents a significant addition to Ireland’s
existing network of double taxation treaties.” The added certainty the Convention will bring when considering taxation of
cross border business and investment activities is expected to encourage extra
growth in trade and investment between the two countries. The Convention covers taxes on the income and gains of individuals and companies.
It works by granting exclusive taxation rights to one of the partnership countries,
or where the income or gain remains taxable in both, by providing that the country
of residence of the taxpayer will relieve double taxation by allowing a credit
for the tax paid in the other country. Reduced rates of withholding taxes on dividend, interest and royalty payments
should further aid business and development flows between the countries. Other important aspects of the agreement include the non-discrimination article,
which protects nationals of each country from discriminatory tax provisions
in the other, and the exchange of information article, which is necessary to
counter tax evasion. It is hoped the Irish and Turkish Parliaments will complete the procedures
to ratify the Convention sometime next year. It is then scheduled to enter into
force at the beginning of 2010. Ireland currently has Double Taxation Conventions with 45 countries, including
a new tax treaty with Chile, which will come into effect in January 2009. New
agreements with Macedonia, Vietnam and a Tax Information Exchange Agreement
(TIEA) with the Isle of Man have recently been signed and are in the process
of being ratified by national parliaments. New treaties with Azerbaijan, Bosnia
& Herzegovina, Georgia, Malta, Moldova and Thailand, and a Protocol to the
existing tax treaty with South Africa, are expected to be signed shortly. .
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