Simon Harris (Wicklow, Fine Gael)
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I thank the Chairman for his words of welcome. I very much enjoyed my time as a member of this committee and I look forward to working with colleagues in what will no doubt be a very busy period for this committee.

I am very pleased to be here today to introduce to the committee two draft Government orders giving force of law in Ireland to two new double taxation agreements, or DTAs, with Thailand and Botswana, and three draft Government orders giving force of law to three protocols to the double taxation agreements with Belgium, Luxembourg and Denmark.

The double taxation agreement with Thailand was signed on 4 November 2013 by the then ambassador of Ireland to Thailand, Declan Kelly. The DTA with Botswana was signed on 11 June 2014 by the then Minister of State, Deputy Joe Costello.

The protocol to the DTA with Belgium was signed on the 14 April 2014 by the former Tánaiste and Minister for Foreign Affairs, Deputy Gilmore, the protocol to the DTA with Luxembourg was signed on the 27 May by Mr. Diarmuid O'Leary, ambassador of Ireland to Luxembourg, and the protocol to the DTA with Denmark was signed by me on the 22 July in the Department of Finance's offices in Dublin.

Double taxation agreements are widely regarded as critical items of fiscal infrastructure for developing substantial bilateral trading and investment opportunities by reducing tax impediments that might otherwise deter such cross-border activity. For a small open economy such as ours, which is so dependent on trade and investment with other countries, continuing to expand our network of international tax agreements is not only necessary but vital. Double taxation agreements facilitate trade and investment by providing greater certainty to taxpayers regarding their potential liability to tax in the foreign jurisdiction; allocating taxing rights between the two jurisdictions in order that the taxpayer is not subject to double taxation; reducing the risk of excessive taxation that may arise as a result of high withholding taxes; and ensuring that taxpayers are not subject to discriminatory taxation in the foreign jurisdiction. These agreements provide benefits to both taxpayers and governments by setting out clear rules that will govern tax matters relating to cross-border trade and investment.

Tax treaties ensure predictability and fairness in the tax treatment of taxpayers and spell out clearly defined provisions that facilitate companies investing and doing business overseas. This is achieved by allocating exclusive taxing rights to one country or, where both countries retain taxing rights, by requiring the country where the taxpayer is resident to grant credit against its tax for the tax paid in the other country. Double taxation agreements cover direct taxes, which in the case of Ireland are income tax, corporation tax and capital gains tax. They are comprehensive in scope, covering both the taxation of companies and individuals, and are, in the main, based on the OECD model tax convention. Apart from relieving double taxation, the agreements also include provisions dealing with non-discrimination in respect of taxation matters. Furthermore, they include mutual agreement procedures that allow the tax authorities of both countries to consult each other in taxation matters affecting the agreement and provisions that allow for the exchange of information for the purpose of preventing tax evasion.

Ireland's tax treaty network compares very favourably with those of other, larger OECD countries. It includes most of the world's major economies and accounts, in aggregate, for more than 80% of world GDP. The Irish treaty network has grown significantly in the past three years. We have signed comprehensive double taxation agreements with 71 countries, of which 68 are in effect, and there is a strong pipeline of agreements coming down the tracks. The number of tax treaties has doubled in recent years. The Minister for Finance and I will be ensuring that we continue to prioritise the further expansion of our tax treaty network in the coming months as a central element of our integrated strategy for an export-led sustainable economic recovery for Ireland. I assure members that the Department of Finance and the Revenue Commissioners will continue to liaise with business representative bodies in identifying other countries where tax agreements would assist Irish business. Despite our best efforts, of course, there are some key jurisdictions with which we have yet to secure agreements. We will continue all diplomatic efforts to get these countries to the negotiating table.

The select sub-committee's consideration of the international agreements is an important step in the process towards their ratification. Draft Government orders confirming and giving effect in Ireland to the agreements were laid before Dáil Éireann on 22 September 2014 in accordance with the provisions of section 826 of the Taxes Consolidation Act 1997. A resolution by Dáil Éireann approving the draft orders is required before the Government proceeds to make them. The proposal for the Dáil to approve the draft orders has been referred to the select sub-committee for its consideration. When the select-sub-committee completes its deliberations, the draft orders will then be referred back to the Dáil for approval. Thereafter, the Government may make the orders and the agreements to which they relate will then be included in a Schedule to the Taxes Acts by means of a section in the forthcoming Finance Bill. At that point, the Irish ratification procedures will be complete. In the case of the bilateral agreements, as soon as both countries have completed their procedures, those agreements take effect in accordance with their entry into force provisions.

I commend these draft orders to the select sub-committee and I will be very happy to deal with any questions which members may wish to pose.