Ireland Signs Double Taxation Agreement With Iceland
By by Jason Gorringe, Tax-News.com, London
19 December 2003

On Wednesday 17 December, Minister of State at the Department of Finance Mr. Tom Parlon, and the Icelandic Ambassador to Ireland, Mr. Sverrir Haukur Gunnlaugsson signed a bilateral Convention for the avoidance of double taxation and prevention of fiscal evasion.

According to the Irish government:

“The Convention places limits on source country taxation of dividends and royalties. The rate of taxation of dividends is limited to 5% or 15% of the amount of the gross dividend (depending on the taxpayer's ownership interest in the paying company). The taxation of royalties is limited to 10% in the case of royalties from copyrights of literary, artistic and scientific works, but royalties of a technical nature, such as from patents, are generally exempted. Payments of interest are also exempted from taxation in the source country."

“Other important Articles in the Convention include the non-discrimination provisions, which protect nationals of one country from discriminatory tax provisions in the other, and also the exchange of information provisions, which are necessary to counter tax avoidance and evasion."

“The Convention should have a positive impact on trade and investment between Ireland and Iceland and help to broaden the economic base of both countries. In this regard the Convention removes or substantially reduces fiscal obstacles to trade and investment between both countries."

It is anticipated that the Convention will come into effect in January 2005, assuming that the legislatures in each country can ratify the agreement during the course of 2004.

Ireland currently has double taxation Conventions with forty two countries, and new agreements with Egypt and Malta are expected to be signed in 2004. Additionally, new agreements with Argentina, Turkey and Ukraine are being negotiated. Existing agreements with Cyprus and France are also in the process of re-negotiation.

.