[Code of Federal Regulations]
[Title 26, Volume 18, Parts 500 to 599]
[Revised as of April 1, 2000]
From the U.S. Government Printing Office via GPO Access
[CITE: 26CFR513.1]
[Page 50-53]
TITLE 26--INTERNAL REVENUE
CHAPTER 1--INTERNAL REVENUE SERVICE DEPARTMENT OF THE TREASURY
(Continued)
PART 513--IRELAND--Table of Contents
Subpart--Withholding of Tax
Sec. 513.1 Introductory.
(a) The income tax convention between the United States and the
Republic of Ireland, signed September 13, 1949, proclaimed by the
President of the United States on December 24, 1951, and effective (as
respects the United States tax) for taxable years beginning on or after
January 1, 1951, referred to in this subpart as the convention, provides
in part as follows:
Article I
(1) The taxes which are the subject of the present Convention are:
(a) In the United States of America: The Federal income taxes,
including surtaxes (hereinafter referred to as United States tax).
(b) In Ireland: The income tax (including surtax) and the
corporation profits tax (hereinafter referred to as Irish tax).
(2) The present Convention shall also apply to any other taxes of a
substantially similar character imposed by either Contracting Party
subsequently to the date of signature of the present Convention.
Article II
(1) In the present Convention, unless the context otherwise
requires--
(a) The term ``United States'' means the United States of America,
and when used in a geographical sense means the States, the Territories
of Alaska and of Hawaii, and the District of Columbia.
(b) The term ``Ireland'' means the Republic of Ireland and the term
``Irish'' has a corresponding meaning.
(c) The terms ``territory of one of the Contracting Parties'' and
``territory of the other Contracting Party'' mean the United States or
Ireland as the context requires.
(d) The term ``United States corporation'' means a corporation,
association or other like entity created or organized in or under the
laws of the United States.
(e) The term ``Irish corporation'' means any kind of juridical
person created under the laws of Ireland.
(f) The terms ``corporation of one Contracting Party'' and
``corporation of the other Contracting Party'' mean a United States
corporation or an Irish corporation as the context requires.
(g) The term ``resident of Ireland'' means any person (other than a
citizen of the United States or a United States corporation) who is
resident in Ireland for the purposes of Irish tax and not resident in
the United States for the purposes of United States tax. A corporation
is to be regarded as resident in Ireland if its business is managed and
controlled in Ireland.
(h) The term ``resident of the United States'' means any individual
who is resident in the United States for the purposes of United States
tax and not resident in Ireland for the purposes of Irish tax, and any
United States corporation and any partnership created or organized in or
under the laws of the
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United States, being a corporation or partnership which is not resident
in Ireland for the purposes of Irish tax.
(i) The term ``Irish enterprise'' means an industrial or commercial
enterprise or undertaking carried on by a resident of Ireland.
(j) The term ``United States enterprise'' means an industrial or
commercial enterprise or undertaking carried on by a resident of the
United States.
(k) The terms ``enterprise of one of the Contracting Parties'' and
``enterprise of the other Contracting Party'' mean a United States
enterprise or an Irish enterprise, as the context requires.
(l) The term ``permanent establishment'' when used with respect to
an enterprise of one of the Contracting Parties means a branch,
management, factory or other fixed place of business, but does not
include an agency unless the agent has, and habitually exercises, a
general authority to negotiate and conclude contracts on behalf of such
enterprise or has a stock of merchandise from which he regularly fills
orders on its behalf. An enterprise of one of the Contracting Parties
shall not be deemed to have a permanent establishment in the territory
of the other Contracting Party merely because it carries on business
dealings in the territory of such other Contracting Party through a bona
fide commission agent or broker acting in the ordinary course of his
business as such. The fact that an enterprise of one of the Contracting
Parties maintains in the territory of the other Contracting Party a
fixed place of business exclusively for the purchase of goods or
merchandise shall not of itself constitute such fixed place of business
a permanent establishment of such enterprise. The fact that a
corporation of one Contracting Party has a subsidiary corporation which
is a corporation of the other Contracting Party or which is engaged in
trade or business in the territory of such other Contracting Party
(whether through a permanent establishment or otherwise) shall not of
itself constitute that subsidiary corporation a permanent establishment
of its parent corporation.
(2) For the purposes of Article VI, VII, VIII, IX and XIV a resident
of Ireland shall not be deemed to be engaged in trade or business in the
United States in any taxable year unless such resident has a permanent
establishment situated therein in such taxable year. The same principle
shall be applied, mutatis mutandis, by Ireland in the case of a resident
of the United States.
(3) In the application of the provisions of the present Convention
by one of the Contracting Parties any term not otherwise defined shall,
unless the context otherwise requires, have the meaning which it has
under the laws of that Contracting Party relating to the taxes which are
the subject of the present Convention.
* * * * *
Article VI
(1) The rate of United States tax on dividends derived from a United
States corporation by a resident of Ireland who is subject to Irish tax
on such dividends and not engaged in trade or business in the United
States shall not exceed 15 per cent: provided that such rate of tax
shall not exceed five per cent if such resident is a corporation
controlling, directly or indirectly, at least 95 per cent of the entire
voting power in the corporation paying the dividend, and not more than
25 per cent of the gross income of such paying corporation is derived
from interest and dividends, other than interest and dividends received
from its own subsidiary corporations. Such reduction of the rate to five
per cent shall not apply if the relationship of the two corporations has
been arranged or is maintained primarily with the intention of securing
such reduced rate.
(2) Dividends derived from sources within Ireland by an individual
who is (a) a resident of the United States, (b) subject to United States
tax with respect to such dividends, and (c) not engaged in trade or
business in Ireland, shall be exempt from Irish surtax.
(3) Either of the Contracting Parties may terminate this Article by
giving written notice of termination to the other Contracting Party,
through diplomatic channels, on or before the thirtieth day of June in
any calendar year after the calendar year in which the exchange of the
instruments of ratification takes place and in such event paragraph (1)
hereof shall cease to be effective as to United States tax on and after
the first day of January, and paragraph (2) hereof shall cease to be
effective as to Irish tax on and after the 6th day of April, in the
calendar year next following that in which such notice is given.
Article VII
(1) Interest (on bonds, securities, notes, debentures, or on any
other form of indebtedness) derived from sources within the United
States by a resident of Ireland who is subject to Irish tax on such
interest and not engaged in trade or business in the United States,
shall be exempt from United States tax; but such exemption shall not
apply to such interest paid by a United States corporation to a
corporation resident in Ireland controlling, directly or indirectly,
more than 50 per cent of the entire voting power in the paying
corporation.
(2) Interest (on bonds, securities, notes, debentures, or on any
other form of indebtedness) derived from sources within Ireland by
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a resident of the United States who is subject to United States tax on
such interest and not engaged in trade or business in Ireland, shall be
exempt from Irish tax; but such exemption shall not apply to such
interest paid by a corporation resident in Ireland to a United States
corporation controlling, directly or indirectly, more than 50 per cent
of the entire voting power in the paying corporation.
Article VIII
(1) Royalties and other amounts paid as consideration for the use
of, or for the privilege of using, copyrights, patents, designs, secret
processes and formulas, trade-marks, and other like property, and
derived from sources within the United States by a resident of Ireland
who is subject to Irish tax on such royalties or other amounts and not
engaged in trade or business in the United States, shall be exempt from
United States tax.
(2) Royalties and other amounts paid as consideration for the use
of, or for the privilege of using, copyrights, patents, designs, secret
processes and formulas, trademarks, and other like property, and derived
from sources within Ireland by a resident of the United States who is
subject to United States tax on such royalties or other amounts and not
engaged in trade or business in Ireland shall be exempt from Irish tax.
(3) For the purposes of this Article, the term ``royalties'' shall
be deemed to include rentals in respect of motion picture films.
Article IX
(1) The rate of United States tax on royalties in respect of the
operation of mines or quarries or of other extraction of natural
resources, and on rentals from real property or from an interest in such
property, derived from sources within the United States by a resident of
Ireland who is subject to Irish tax with respect to such royalties or
rentals and not engaged in trade or business in the United States, shall
not exceed 15 per cent; provided that any such resident may elect for
any taxable year to be subject to United States tax as if such resident
were engaged in trade or business in the United States.
(2) Royalties in respect of the operation of mines or quarries or of
other extraction of natural resources, and rentals from real property or
from an interest in such property, derived from sources within Ireland
by an individual who is (a) a resident of the United States, (b) subject
to United States tax with respect to such royalties and rentals, and (c)
not engaged in trade or business in Ireland, shall be exempt from Irish
surtax.
Article Xx
(1) Any salary, wage, similar remuneration, or pension, paid by the
Government of the United States to an individual (other than a citizen
of Ireland who is not also a citizen of the United States) in respect of
services rendered to the United States in the discharge of governmental
functions, shall be exempt from Irish tax.
(2) Any salary, wage, similar remuneration, or pension, paid by the
Government of Ireland to an individual (other than a citizen of the
United States who is not also a citizen of Ireland) in respect of
services rendered to Ireland in the discharge of governmental functions,
shall be exempt from United States tax.
(3) The provisions of this Article shall not apply to payments in
respect of services rendered in connection with any trade or business
carried on by either of the Contracting Parties for purposes of profit.
* * * * *
Article XII
(1) Any pension (other than a pension to which Article X applies),
and any life annuity, derived from sources within the United States by
an individual who is a resident of Ireland shall be exempt from United
States tax.
(2) Any pension (other than a pension to which Article X applies),
and any life annuity, derived from sources within Ireland by an
individual who is a resident of the United States shall be exempt from
Irish tax.
(3) The term ``life annuity'' means a stated sum payable
periodically at stated times, during life or during a specified or
ascertainable period of time, under an obligation to make the payments
in consideration of money paid.
* * * * *
Article XV
(1) Dividends and interest paid, on or after the first day of
January in the calendar year in which the exchange of instruments or
ratification takes place, by an Irish corporation shall be exempt from
United States tax except where the recipient is a citizen of or a
resident in the United States or a United States corporation.
(2) Dividends and interest paid, on or after the 6th day of April of
the first year of assessment specified in Article XXII(2)(b), (i) of
this Convention, by a United States corporation shall be exempt from
Irish tax except where the recipient is a resident of Ireland.
* * * * *
[[Page 53]]
Article XX
(1) The taxation authorities of the Contracting Parties shall
exchange such information (being information available under the
respective taxation laws of the Contracting Parties) as is necessary for
carrying out the provisions of the present Convention or for the
prevention of fraud or the administration of statutory provisions
against legal avoidance in relation to the taxes which are the subject
of the present Convention. Any information so exchanged shall be treated
as secret and shall not be disclosed to any person other than those
concerned with the assessment and collection of the taxes which are the
subject of the present Convention. No information shall be exchanged
which would disclose any trade secret or trade process.
(2) As used in this Article, the term ``taxation authorities''
means, in the case of the United States, the Commissioner of Internal
Revenue or his authorized representative and, in the case of Ireland,
the Revenue Commissioners or their authorized representative.
* * * * *
Article XXII
(1) The present Convention shall be ratified and the instruments of
ratification shall be exchanged at Washington, District of Columbia, as
soon as possible.
(2) Upon exchange of ratifications, the present Convention shall
have effect:
(a) as respects United States tax, for the taxable years beginning
on or after the first day of January in the calendar year in which the
exchange of instruments of ratification takes place;
(b)(i) as respects Irish income tax, for the year of assessment
beginning on the 6th day of April in the calendar year in which the
exchange of instruments of ratification takes place and subsequent
years; (ii) as respects Irish surtax, for the year of assessment
beginning on the 6th day of April immediately preceding the calendar
year in which the exchange of instruments of ratification takes place,
and subsequent years; and (iii) as respects Irish corporation profits
tax, for any chargeable accounting period beginning on or after the
first day of April in the calendar year in which the exchange of
instruments of ratification takes place, and for the unexpired portion
of any chargeable accounting period current at that date.
Article XXIII
(1) The present Convention shall continue in effect indefinitely but
either of the Contracting Parties may, on or before the 30th day of June
in any calendar year following the calendar year in which the exchange
of instruments of ratification takes place, give to the other
Contracting Party, through diplomatic channels, notice of termination
and, in such event, the present Convention shall cease to be effective:
(a) as respects United States tax, for the taxable years beginning
on or after the first day of January in the calendar year next following
that in which such notice is given;
(b)(i) as respects Irish income tax, for any year of assessment
beginning on or after the 6th day of April in the calendar year next
following that in which such notice is given; (ii) as respects Irish
surtax, for any year of assessment beginning on or after the 6th day of
April in the calendar year in which such notice is given; and (iii) as
respects Irish corporation profits tax, for any chargeable accounting
period beginning on or after the first day of April in the calendar year
next following that in which such notice is given and for the unexpired
portion of any chargeable accounting period current at that date.
(2) The termination of the present Convention or of any Article
thereof shall not have the effect of reviving any treaty or arrangement
abrogated by the present Convention or by treaties previously concluded
between the Contracting Parties.
(b) As used in this subpart, unless the context otherwise requires,
the terms defined in the above articles of the convention shall have the
meanings so assigned to them.
Effective Date Note: By T.D. 8734, 62 FR 53497, Oct. 14, 1997,
Sec. 513.1 was removed, effective Jan. 1, 1999. By T.D. 8804, 63 FR
72183, Dec. 31, 1998, the effective date was delayed until Jan. 1, 2000.
By T.D. 8856, 64 FR 73408, Dec. 30, 1999, the effective date was delayed
until Jan. 1, 2001.