Australian Tax Treaties
Irish Agreement
AGREEMENT BETWEEN THE GOVERNMENT OF AUSTRALIA AND THE GOVERNMENT OF IRELAND FOR THE AVOIDANCE OF DOUBLE TAXATION AND THE PREVENTION OF FISCAL EVASION WITH RESPECT TO TAXES ON INCOME AND CAPITAL GAINS
ARTICLE 11
Dividends
(1)
Dividends paid by a company which is a resident of Australia for the purposes of Australian tax, being dividends to which a resident of Ireland is beneficially entitled, may be taxed in Ireland. Such dividends may also be taxed in Australia, according to the law of Australia, but the tax so charged shall not exceed 15 per cent of the gross amount of the dividends.
(2)
(a) Dividends paid by a company which is a resident of Ireland for the purposes of Irish tax, being dividends to which a resident of Australia is beneficially entitled, may be taxed in Australia.
(b) Where a resident of Australia is entitled to a tax credit in respect of a dividend under paragraph (3) of this Article, tax may also be charged in Ireland and according to the laws of Ireland on the aggregate of the amount or value of that dividend and the amount of that tax credit at a rate not exceeding 15 per cent.
(c) Except as aforesaid, dividends paid by a company which is a resident of Ireland for the purposes of Irish tax, being dividends to which a resident of Australia is beneficially entitled, shall be exempt from any tax in Ireland which is chargeable on dividends.
(3)
A resident of Australia who receives dividends from a company which is a resident of Ireland shall, subject to the provisions of paragraph (4) of this Article and provided he is the beneficial owner of the dividends, be entitled to the tax credit in respect thereof to which an individual resident in Ireland would have been entitled had he received those dividends, and to the payment of any excess of that tax credit over his liability to Irish tax. Any such credit shall be treated for the purposes of Australian tax as assessable income from sources in Ireland.
(4)
The provisions of paragraph (3) of this Article shall not apply where the beneficial owner of the dividends (being a company) is, or is associated with, a company which either alone or together with one or more associated companies controls directly or indirectly 10 per cent or more of the voting power in the company paying the dividends. For the purposes of this paragraph two companies shall be deemed to be associated if one controls directly or indirectly more than 50 per cent of the voting power in the other company, or a third company controls more than 50 per cent of the voting power in both of them.
(5)
The term " dividends " in this Article means income from shares and includes any income or distribution assimilated to income from shares under the taxation law of the Contracting State of which the company paying the dividends or income or making the distribution is a resident.
(6)
Where the company paying a dividend is a resident of one of the Contracting States and the beneficial owner of the dividend, being a resident of the other Contracting State, owns 10 per cent or more of the class of shares in respect of which the dividend is paid, paragraphs (2) and (3) of this Article shall not apply to the dividend to the extent that it can have been paid only out of profits which the company paying the dividend earned or other income which it received in a period ending 12 months or more before the relevant date. For the purposes of this paragraph the term " relevant date " means the date on which the beneficial owner of the dividend became the owner of 10 per cent or more of the class of shares in question: provided that this paragraph shall not apply if the shares were acquired for bona fide commercial reasons and not primarily for the purpose of securing the benefit of this Article.
(7)
The provisions of paragraphs (1), (2) and (3) of this Article shall not apply if the person beneficially entitled to the dividends, being a resident of one of the Contracting States, carries on business in the other Contracting State of which the company paying the dividends is a resident, through a permanent establishment situated therein, or performs in that other State independent personal services from a fixed base situated therein, and the holding in respect of which the dividends are paid is effectively connected with such permanent establishment or fixed base. In such a case, the provisions of Article 8 or Article 15, as the case may be, shall apply.
(8)
Dividends paid by a company which is a resident of one of the Contracting States, being dividends to which a person who is not a resident of the other Contracting State is beneficially entitled, shall be exempt from tax in that other State except insofar as the holding in respect of which the dividends are paid is effectively connected with a permanent establishment or fixed base situated in that other State: provided that this paragraph shall not apply in relation to dividends paid by any company which is a resident of Australia for the purposes of Australian tax and which is also a resident of Ireland for the purposes of Irish tax.
The Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (the MLI) has modified the application of this tax treaty. A synthesised text of the MLI and this tax treaty is available to facilitate the understanding of how the MLI modifies this tax treaty.
Dividends paid by a company which is a resident of Australia for the purposes of Australian tax, being dividends to which a resident of Ireland is beneficially entitled, may be taxed in Ireland. Such dividends may also be taxed in Australia, according to the law of Australia, but the tax so charged shall not exceed 15 per cent of the gross amount of the dividends.
(2)
(a) Dividends paid by a company which is a resident of Ireland for the purposes of Irish tax, being dividends to which a resident of Australia is beneficially entitled, may be taxed in Australia.
(b) Where a resident of Australia is entitled to a tax credit in respect of a dividend under paragraph (3) of this Article, tax may also be charged in Ireland and according to the laws of Ireland on the aggregate of the amount or value of that dividend and the amount of that tax credit at a rate not exceeding 15 per cent.
(c) Except as aforesaid, dividends paid by a company which is a resident of Ireland for the purposes of Irish tax, being dividends to which a resident of Australia is beneficially entitled, shall be exempt from any tax in Ireland which is chargeable on dividends.
(3)
A resident of Australia who receives dividends from a company which is a resident of Ireland shall, subject to the provisions of paragraph (4) of this Article and provided he is the beneficial owner of the dividends, be entitled to the tax credit in respect thereof to which an individual resident in Ireland would have been entitled had he received those dividends, and to the payment of any excess of that tax credit over his liability to Irish tax. Any such credit shall be treated for the purposes of Australian tax as assessable income from sources in Ireland.
(4)
The provisions of paragraph (3) of this Article shall not apply where the beneficial owner of the dividends (being a company) is, or is associated with, a company which either alone or together with one or more associated companies controls directly or indirectly 10 per cent or more of the voting power in the company paying the dividends. For the purposes of this paragraph two companies shall be deemed to be associated if one controls directly or indirectly more than 50 per cent of the voting power in the other company, or a third company controls more than 50 per cent of the voting power in both of them.
(5)
The term " dividends " in this Article means income from shares and includes any income or distribution assimilated to income from shares under the taxation law of the Contracting State of which the company paying the dividends or income or making the distribution is a resident.
(6)
Where the company paying a dividend is a resident of one of the Contracting States and the beneficial owner of the dividend, being a resident of the other Contracting State, owns 10 per cent or more of the class of shares in respect of which the dividend is paid, paragraphs (2) and (3) of this Article shall not apply to the dividend to the extent that it can have been paid only out of profits which the company paying the dividend earned or other income which it received in a period ending 12 months or more before the relevant date. For the purposes of this paragraph the term " relevant date " means the date on which the beneficial owner of the dividend became the owner of 10 per cent or more of the class of shares in question: provided that this paragraph shall not apply if the shares were acquired for bona fide commercial reasons and not primarily for the purpose of securing the benefit of this Article.
(7)
The provisions of paragraphs (1), (2) and (3) of this Article shall not apply if the person beneficially entitled to the dividends, being a resident of one of the Contracting States, carries on business in the other Contracting State of which the company paying the dividends is a resident, through a permanent establishment situated therein, or performs in that other State independent personal services from a fixed base situated therein, and the holding in respect of which the dividends are paid is effectively connected with such permanent establishment or fixed base. In such a case, the provisions of Article 8 or Article 15, as the case may be, shall apply.
(8)
Dividends paid by a company which is a resident of one of the Contracting States, being dividends to which a person who is not a resident of the other Contracting State is beneficially entitled, shall be exempt from tax in that other State except insofar as the holding in respect of which the dividends are paid is effectively connected with a permanent establishment or fixed base situated in that other State: provided that this paragraph shall not apply in relation to dividends paid by any company which is a resident of Australia for the purposes of Australian tax and which is also a resident of Ireland for the purposes of Irish tax.
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