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Ireland Italy Double Taxation Agreement

In particular, through a detailed analysis of specific cases and international agreements between Italy and other countries, we give advice on how to fulfil their tax obligations in the country where they work or in their country of residence for tax purposes, thus avoiding sanctions, when there was no capital gains tax at the time of the negotiation of the double taxation agreement. , provides for the agreement: the High Court`s decision in the Lorraine Kinsella/The Revenue Commissioners (1) case concerns the application of the double taxation agreement between Ireland and Italy to Irish capital gains tax under a scheme set up to avoid it. Double taxation refers to cases in which two different countries have the right to collect taxes on income collected on their territory by the same subject. On the one hand, there is the country where the income is produced and, on the other hand, the state of residence for tax purposes. In the case of double taxation of the same income (between Italy and a foreign country), the person can claim foreign tax breaks for taxes paid abroad. The tax exemption can only be invoked if foreign taxes are paid “definitively” by the presentation of the Italian tax return. Foreign tax relief is calculated on a certain formula. In conclusion, Mr. Justice Kelly stated that, since the applicant had succeeded on both issues of interpretation, there was a declaration that the agreement between Ireland and Italy, signed on 11 June 1971 and enshrined in Irish law by the provisions of Statute 64 of 1973, aimed at avoiding double taxation and preventing tax evasion, would apply to Irish capital gains tax, in accordance with Article 2 of the Convention. Furthermore, within the meaning of Article 3.1, paragraph (e), e), of this article, it is appropriate to: bb) of the aforementioned convention in Ireland for the calculation of the period or days of the exercise in question, in accordance with S.819, paragraph 4, of the Tax Consolidation Act 1997, i.e. that a person is present in the State for one day if that person is in the State. At the end of the day. Lorraine Kinsella, the wife of a Ryanair shareholder, has acquired a lease for a small apartment in Italy.

She lent money to her husband to buy his shares for 18 million euros in October 2003 and then sold his shares to a third party for 19 million euros. Kinsella`s tax return was accompanied by doubts about the application of the double taxation agreement between Ireland and Italy to capital gains tax. In order to avoid the risk of double taxation, it is recommended to ask the Italian tax authorities for a certificate of residence in tax which will be presented to the foreign country where the income was collected in a given year.