Capital Gains Tax and the Ireland–Italy Double Taxation Convention

In response to enquiries in the past, Revenue expressed its view that Irish Capital Gains Tax was a covered tax under Article 2 of the Ireland-Italy Double Taxation Convention, despite the fact that the Convention was entered into prior to the enactment in Ireland of Capital Gains Tax.

Having examined the matter again, Revenue believes there may be a doubt about the correctness of its previous position. Accordingly, legal advice is currently being sought in relation to the matter. Further clarification will be issued when the advice has been received and fully considered. Pending such clarification, the previous view that Capital Gains Tax was a covered tax under Article 2 of the Ireland-Italy Double Taxation Convention is withdrawn.

It should be noted that the Ireland-Italy Double Taxation Convention is currently being renegotiated. A recent round of negotiation took place in Rome in May last. It is hoped that the negotiations will be concluded in the near future. Under the proposed terms of the new Convention, Irish Capital Gains Tax will be a covered tax.