On June 27, 2022 the Irish Ministry of Finance published Ireland's Tax Treaty Policy Statement. This policy statement outlines the broad parameters of Ireland's tax treaty policy based on two central themes:

- Considerations for Ireland's economy and trade;

- Particular emphasis on tax treaties with developing countries.

 

Tax Treaty Policy

In chapter 3 of the policy statement the following topics are discussed:

- Priorities

- Existing Treaty Negotiations

- Administrative arrangements and structures

- Ireland’s Economic Policy for Double Tax Agreements

 

With respect to Ireland’s priorities the following is stated:

 

Priority A

Ireland already has Double Tax Agreements with 16 countries that are members of the G20. Given the economic importance and geographical reach of these jurisdictions, it is an important objective to have have double tax agreements with all G20 members.

 

Priority B

A second key priority is to ensure that Ireland develops tax treaties with all current OECD member countries and accession countries, as well as EU accession countries.

 

Priority C

Several of Ireland’s existing double tax agreements are over 40 years old and may not be fully in line with the provisions of more recent Irish treaties and current international norms. Some of these tax treaties may be suitable for modernisation through renegotiation or the addition of protocols, taking due account of international tax developments.

 

Ireland’s Double Tax Treaty Policy for Developing Countries

With respect to Ireland’s double tax treaty policy for developing countries the following is stated:

 

Least Developed Countries (LDCs) are defined as low-income countries confronting severe structural impediments to sustainable development. They are highly vulnerable to economic and environmental shocks and have low capacity. The list of LDCs is reviewed every three years by United Nations Committee for Development Policy (CDP). The current list includes 46 countries and was updated in November 2021.

 

Ireland’s tax treaty policy with developing countries will adhere to the following core principles:

1.  A fundamental principle of this policy is that Ireland will not approach any Least Developed Country seeking to negotiate a double taxation agreement.

2.  Where Ireland is approached in that regard by a Least Developed Country, an analysis of the potential impacts and spillovers will be carried out prior to agreeing to negotiations to guard against negative spillovers arising.

3.  Any negotiation of such a double tax agreement will fully consider the preferences of the partner country regarding source taxation.

4.  Consistent with Ireland’s general approach, any treaty will incorporate anti-BEPS measures to ensure robust defences against potential tax avoidance.

5.  In order to ensure that any double tax agreement is consistent with Ireland’s whole-of-Government approach to assisting developing countries, any potential treaty with a developing country will involve consultation with all relevant Government Departments, and in particular the Irish Aid Division of the Department of Foreign Affairs.

 

While, as stated above, Ireland will not instigate a negotiation with LDCs, it is recognised that such countries may choose to seek to develop their treaty network as a means to encourage economic development. It is important, therefore, that this policy does not act as a barrier to economic growth in those countries. Accordingly, consideration will be given to negotiating a treaty, where that consideration is at the clear request of the country concerned.

 

The full text of Ireland’s Tax Treaty Policy Statement can be downloaded here.

 

 

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