Key Benefits:
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
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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. "
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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