New tax treaty with Ireland

26th of June 2019 | Door:  Barry Scheer

On 13 June 2019, a new tax treaty between the Netherlands and Ireland has been signed. This treaty replaces the old tax treaty from 1969.

Source: Taxence, 14 June 2019

The tax treaty contains agreements that must prevent individuals and/or companies from paying double tax on the one hand and the avoidance of taxation on the other. New agreements have also been made on the taxation of pensions.

The treaty includes an anti-abuse clause that prevents the benefits of the treaty from being used solely to avoid taxation. If this is the case, the possibility of invoking the benefits of the tax treaty lapses. With this anti-abuse provision and a few other adjustments, the tax treaty meets the minimum standards from the so-called BEPS project of the OECD / G20 against tax avoidance.

Pensions

In addition, the distribution of the right to tax over pensions is particularly being adjusted. Under the new treaty, the right to levy tax on pensions of more than € 25,000 per year will be assigned to the source state under certain conditions. For existing cases, a transitional arrangement has been made on the basis of which the provisions of the old tax treaty remain applicable.

In addition, the treaty has been modernized in a large number of parts, with links being sought with the OECD Model Tax Convention.