For many years Ireland has pursued a policy of expansion and maintenance of its tax treaty network; a policy which has supported the competitiveness of Irish companies and facilitated inward investment and trade into Ireland.
Ireland currently has signed double taxation agreements with 74 countries, of which 73 are in effect.
More recently, international tax reforms, most notably the OECD Base Erosion and Profit Shifting (BEPS) Initiative, have led to an evolution in the role of double taxation agreements and a desire that they should not be used to facilitate double non-taxation.
The Department of Finance believe now is an opportune time to review Ireland’s tax treaty policy, and to update it where appropriate. For example, are there sectors of the economy for which our current tax treaty policy may not facilitate access to broader economic opportunities? The Department of Finance note that it is timely to consider the merits of pursuing such industry-specific outcomes in conjunction with broader policy goals.
The consultation includes a number of questions for interested parties to consider. We recommend that Irish companies consider how Ireland’s double taxation treaties impact on their business, whether the current treaty network sufficiently covers their business sector, whether there are gaps that should be addressed etc. and reply to the consultation.
The consultation period will run to 7 May 2021. Link to the consultation document here.