The Irish Revenue Commissioners said that the new Convention, which reflects the current tax policies of both countries, 'is comprehensive in scope and is largely based on the current OECD Model Convention. It provides for the allocation of taxing rights between the two countries and for relief from double taxation where income or gains remain taxable in both countries. In such cases, credit will be given by the country of residence of the taxpayer for tax paid in the other country.'

The Convention eliminates source taxation of interest and royalty payments and provides for reduced source taxation of dividend payments made between both countries. Other important aspects of the Convention include the non-discrimination provisions, which protect nationals of each country from discriminatory tax provisions in the other, and also the exchange of information provisions, which are necessary to counter tax evasion.

At the signing ceremony, Minister Cullen commented: 'Given the significant trading and investment links which exist between Ireland and Norway, the putting in place of a modern tax treaty is an important contribution to the maintenance and development of these economic relations. Tax treaties represent a vital piece of fiscal infrastructure which allows for the smooth and regulated taxation of cross country business and investment activities.'

The Convention is expected to be ratified by both the Irish and Norwegian governments by the end of 2000 and will enter into force at the beginning of 2001.