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Approves The Protocol Between The Portuguese Republic And Ireland, Signed In Lisbon On 11 November 2005, Reviewing The Convention For The Avoidance Of Double Taxation And The Prevention Of Fiscal Evasion With Respect To Taxes On Income And The Protocol...

Original Language Title: Aprova o Protocolo entre a República Portuguesa e a Irlanda, assinado em Lisboa em 11 de Novembro de 2005, Que Revê a Convenção para Evitar a Dupla Tributação e Prevenir a Evasão Fiscal em Matéria de Impostos sobre o Rendimento e Respectivo Protocolo, ass

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MOTION FOR RESOLUTION No. 34 /X

Considering the signing in Lisbon on the November 11, 2005 of the Protocol

between the Portuguese Republic and Ireland that Revelates the Convention to Avoid Double

Taxation and Preventing Tax Evasion in Income Tax Matters and

Respective Protocol, signed in Dublin on June 1, 1993;

Thus:

Under the terms of the paragraph d) of Article 197 (1) of the Constitution, the Government presents to the

Assembly of the Republic the following motion for a resolution:

Approving the Protocol between the Portuguese Republic and Ireland, signed in Lisbon, at 11

of November 2005, which Revelates the Convention to Prevent Double Taxation and

Preventing Tax Evasion in Tax Matter on the Throughput and Respective

Protocol, signed in Dublin, to June 1, 1993, the text of which in the versions

authenticated in the Portuguese and English languages, it publishes in attachment.

Seen and approved in Council of Ministers of March 16, 2006

The Prime Minister

The Minister of the Presidency

The Minister of Parliamentary Affairs

2

PROTOCOL

PROTOCOL BETWEEN THE PORTUGUESE REPUBLIC AND THE

IRELAND REVISING THE CONVENTION TO AVOID THE DUO

TAXATION AND PREVENTING TAX EVASION IN MATTER

FROM INCOME TAXES AND RESPECTIVE

PROTOCOL, SIGNED IN DUBLIN TO June 1, 1993

The Portuguese Republic and Ireland,

Desiring to conclude a Protocol amending the Convention between the Contracting Parties

to Prevent Double Taxation and Prevent Tax Evasion in Tax Matters

on the Throughput and its respective Protocol, signed in Dublin on June 1, 1993 (the

follow designated by "the Convention"),

They agree on the following:

ARTICLE 1º

Paragraph 2 of Article 13º (Mais-Valies) of the 1993 Convention is deleted and passes the

have the following wording:

" 2. For the purposes of paragraph 1 of this Article, the gains from the

divesting of real estate situated in the other Contracting State

understand the gains from equities or equiparable rights, with

the exception of shares listed on scholarship, and which remove, directly or indirectly,

more than 50% of the respective value, of real estate situated in that

another state. "

3

ARTICLE 2º

In Article 13º (Mais-Valies) of the 1993 Convention is added a new paragraph 6, with the

following wording:

" 6. The provisions of paragraph 5 of this Article shall not affect the right of a State

Contractor to, under the domestic law, collect a tax on the

gains from the disposal of shares, securities or other parties

social of a resident company of that Contracting State, as well as of

claims on a resident company of that Contracting State, if the said

gains are not subject to tax in the other Contracting State, and

(a) the said gains are earned by a natural person who

is a resident of the other Contracting State and who was resident of the

first mentioned state, at any given time, during the three

years preceding immediately the said divestance, and

(b) (i) the natural person who earned the gains has held, direct or

indirectly, at any time, only or together with the

their respective spouse or with one of their relatives by the blood or

by marriage, at least 5% percent of the capital issued

corresponding to a given category of actions of that

society, or

(ii) the value of the participation exceeds 500,000 euros. "

ARTICLE 3º

Enter a new paragraph in the Protocol to the Convention of 1993, in the following terms:

Ad Article 24º, para. 3

It is understood that the provisions of the Convention will not be interpreted in such a way

prevent the application by a Contracting State of the provisions relating to

under-capitalization provided for in the respective domestic legislation, save where

associated companies demonstrate that, given the specific characteristics of the

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its activities or economic circumstances of its own, the conditions

established or imposed among such undertakings are in accordance with the principle of

absolute independence (arm's length principle) .

ARTICLE 4º

(1) Each of the Contracting States shall notify the other of the conclusion of the

formalities required by the respective legislation for the purposes of the entry into force of the

this Protocol.

(2) This Protocol shall enter into force on the date of receipt of the last of the

said notifications and will produce effects:

(a) In Ireland:

(i) regarding the income tax and the tax for more-

valias, in relation to any fiscal year beginning on or after 1

of January of the calendar year immediately following the year of entry into

force of this Protocol;

(ii) in respect of corporation tax, in relation to any year

financial with start on or after January 1 of the calendar year immediately following

to the year of the entry into force of this Protocol;

(b) In Portugal:

(i) regarding taxes withheld at the source, whose operative fact surges

on or after January 1 of the year immediately following the year

of the entry into force of this Protocol;

(ii) in respect of the remaining taxes, in relation to income

produced in any fiscal year with start on or after 1 of

January of the year immediately following that of the entry into force of the

this Protocol.

IN FÉ OF WHAT, THE SIGNATORIES, DULY AUTHORIZED FOR THE PURPOSE, SIGNED THE

this Protocol.

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FEITO in duplicate in Lisbon, at the eleven days of the month of November 2005, in the

languages Portuguese and English, being both texts being equally authentic.

FOR THE PORTUGUESE REPUBLIC BY IRELAND

Secretary of State for European Affairs Ambassador of Ireland

Fernando Neves Patrick O ' Connor

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PROTOCOL

PROTOCOL BETWEEN THE PORTUGUESE REPUBLIC

AND IRELAND ADOPTS THE CONVENTION FOR THE

AVOIDANCE OF DOUBLE TAXATION AND THE

PREVENTION OF FISCAL EVASION WITH RESPECT TO

TAXES ON INCOME AND ITS PROTOCOL SIGNED AT

DUBLIN ON 1 JUNE, 1993

The World Jewish Republic and Ireland;

Desiring to amend a Protocol to amend the Convention between the Contracting

Parties for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with

respect to Taxes on Income and its Protocol, signed at Dublin on 1 June, 1993

(referred to as referred to as the "the Convention");

Have agreed as follows:

₹ 1

Paragraph 2 of Article 13 (Capital Gains) of the 1993 Convention shall be deleted and

replaced by the following:

" 2. For the purposes of paragraph 1, derived from the alienation of immovable

property situated in the other Contracting State shall include from shares or

comparable interests, other than shares quoted on a stock exchange, deriving more

than 50 per cent of their value directly or differently from immovable property

situated in that other State. "

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₹ 2

Insert new Paragraph 6 in Article 13 (Capital Gains) of the 1993 Convention as follows:

" 6. The provisions of paragraph 5 shall not affect the right of a Contracting State

to levy according to its laws, a tax on bankruptcy from the alienation of shares in,

securities of, or other corporate rights of, or debt claims on a company which is a

resident of that Contracting State, if such proceedings are not subject to tax in the other

Contracting State, and

(a) such an activist are derived by an individual who is a resident of the other

State and was a resident of the first-mentioned State at anytime

during the three years immediately preceding the alienation,

and

(b) (i) the individual who derived the activist has held at any time, either alone or

with his or her or her spouse or one of their relations by blood or marriage, directly or

reveals, at least 5 per cent of the issued share capital of a particular class of shares

in that company, or

(ii) the value of the participation exceeds Euro 500.000. "

₹ 3

Insert this new paragraph in the Protocol to the 1993 Convention.

Ad Article 24, Paragraph 3

It is understood that the provisions of the Convention shall not be so as to be

to prevent the application by a Contracting State of the thin capitalisation

provisions provided for in its domestic law, except in those cases in which the

associated enterprises can show that due to the special characteristics of their

activities or their specific economic activities, the conditions made or

varies between those enterprises are in conformity with the arm's length

principle.

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₹ 4

(1) Each of the Contracting States shall notify to the other of the completion of the

procedures required by its law for the bringing into force of this Protocol.

(2) This Protocol shall enter into force on the date of the receipt of the later of these

notifications and shall thereupon have effect:

(a) In Portugal:

(i) in respect of taxes withheld at source, the fact giving rise to them

Appearing on or after the first day of January of the year next

following the year in which the Protocol enters into force;

(ii) in respect of other taxes, those to income arising in any fiscal year

beginning on or after the first day of January of the year next

following the year in which the Protocol enters into force.

(b) In Ireland:

(i) the taxable income tax and capital income tax, for any year of

assessment beginning on or after the first day of January in the

calendar year next following the year in which this Protocol enters

into force;

(II) as a tax corporation tax, for any financial year beginning on or

after the

first day of January in the calendar year next following the year in

which this Protocol enters into force;

IN WITNESS WHEREOF, the undersigned undermined authorised witnesses, have signed this

Protocol.

DONE in duplicate at Lisbon this eleven day of November 2005, in the World and

English languages, both texts being equally authoritative.

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FOR THE WORLD REPUBLIC FOR IRELAND

Secretary of State for European Affairs Ambassador of Ireland

Fernando Neves Patrick O ' Connor