Sunday 25 September 2016

Dublin and Washington enter talks to update Double Taxation treaty

Published 26/08/2016 | 02:30

Fianna Fail finance spokesman Michael McGrath Photo: Collins
Fianna Fail finance spokesman Michael McGrath Photo: Collins

Talks have begun between the US and Irish governments about updating certain elements of the Double Tax treaty between the two countries.

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The existing treaty was signed in 1997 and a Protocol to the treaty was signed in 1999.

The Department of Finance and the Revenue Commissioners are calling for public submissions from interested parties on the updated US Model Tax Treaty from an Irish perspective.

Fianna Fáil Finance spokesman Michael McGrath said the Department must ensure that any new tax treaty with the United States does not limit Ireland’s ability to attract foreign direct investment.

 “It’s right that we seek to update the Double Taxation Treaty with the US, as the world of finance has grown considerably more complex since it was signed in 1997,” he said.

“We must, however, ensure that we remain as open as possible to Foreign Direct Investment from US Multinationals. They are a source of significant employment in Ireland, and provide considerable tax receipts to the Exchequer every year.”

It comes just a day after the US Treasury published a paper into the state aid investigations being carried out by the European Commission into US companies, including Apple, is inconsistent with international norms and undermines the global tax system.

It said potentially demanding back taxes from the companies concerned would set “an undesirable precedent” for tax authorities in other countries.

Fine Gael MEP Brian Hayes said “selective bias” was driving the Commission’s probes.

“There has been a real propensity from the Commission in recent years to go after large US multinationals based in Europe due to their tax structure,” he said.

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