106 Arrangements for relief from double taxation

Summary

This section enables the Government by order to make arrangements for double taxation relief in respect of gift tax or inheritance tax and for the exchange of information for the prevention and detection of evasion of those taxes, or taxes of a similar character, imposed in another country. The draft of the order must be laid before Dáil Éireann and approved by it and legislation must be enacted by the Oireachtas which gives effect to that Order.

Details

(1) If the Government by order declares that arrangements have been made with the government of another territory to grant relief from double taxation in respect of gift or inheritance tax payable in this country and a tax of a similar nature imposed in that territory, such arrangements will have the force of law. In addition, legislation must be passed by the Oireachtas which inserts a reference to the Order in the Table to this section.

The force of law will also be given to any arrangements entered into by the Government to exchange information with another country for the prevention and detection of evasion of gift tax or inheritance tax, or taxes of a similar character, imposed in that other country.

(2) This subsection provides that—

• arrangements made under subsection (1) may be retrospective, and
• provisions may be made as to property which is not itself subject to double tax (this relates to the making of rules relating to where property is deemed to be located which might or might not follow the general law. These rules might provide that, for the purposes of the tax, the liability of certain property would be determined in accordance with rules agreed between states).

At present, only one treaty has been concluded under section 66 of the Capital Acquisitions Tax Act 1976 i.e. the Double Taxation Relief (Taxes on Estates of Deceased Persons on Inheritances and on Gifts) (United Kingdom) Order 1978 (S.I. No. 279 of 1978).

A double tax treaty was concluded between this country and the United States of America on 20 December 1951. The treaty applied to federal estate tax in the USA and to Irish estate duty and to any other taxes of a substantially similar character imposed subsequently by either Ireland or the USA. By agreement between both countries, the treaty applies to inheritance tax and federal estate tax arising on death, but it does not apply to tax on gifts. Neither does it apply to any death taxes imposed by individual U.S. states, although relief for these taxes might be available unilaterally under section 107.

(3) An agreement made with the head of a foreign state will be regarded as made with the government of that state.

(4) Information can be exchanged between this country and another country under arrangements which have the force of law under this section.

(5)(a) Any order made under the section may be revoked by a subsequent order, and any such revoking order will contain such transitional provisions as appear to the Government to be necessary.

(5)(b) Any order under the section will not be made until a draft of that order is laid before Dáil Éireann and a resolution approving of the draft has been passed by the Dáil.

Part 1 of the Table refers to arrangements made by the Government with the government of any territory outside the State providing for relief from double taxation and exchanging information relating to tax. Reference is included in this Part to S.I. No. 279 of 1978, i.e. the Irish/UK double taxation agreement relating to CAT. Part 2 refers to arrangements regarding the exchange of information relating to tax and other matters relating to tax.

Relevant Date: Finance Act 2015