Proposed amendments to section 36 of the Bill provide that relief from Irish tax on interest payments will apply where the recipient company is resident in a treaty country which generally imposes a tax on interest receivable. Previously the condition was that the interest payment is ‘liable to tax’ in the relevant territory. Similar amendments were proposed to section 51 of the Bill which deals with royalty payments.

Section 36 of the Bill, which amends sections 198 and 246 of TCA 1997, provided for exemption from Irish tax for interest payments to a company resident in a treaty country on the condition that the interest was “liable to tax” in that country. The proposed amendment clarifies that the exemption will apply where the company is resident in a treaty country which imposes a tax that generally applies to interest receivable by companies outside that territory.

Similarly an amendment has been made to section 51 of the Bill (tax treatment of certain royalties) whereby, subject to certain conditions, royalties can be paid to recipients in a treaty country without the application of withholding tax if the treaty country of residence imposes a tax that generally applies to royalties receivable by companies from sources outside that territory.