Willie Penrose (Westmeath, Labour)
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Question 56: To ask the Minister for Finance the discussions he has had with the Portuguese Government concerning the taxation agreement between Ireland and Portugal that would restrict high income Irish individuals from relocating to Portugal in order to avoid paying capital gains tax since this measure has been dropped from the Portuguese Government's legislative agenda; the status of the Irish legislation and its enforceability by the Revenue Commissioners; and if he will make a statement on the matter. [7891/06]

Brian Cowen (Laois-Offaly, Fianna Fail)
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The protocol to amend certain provisions of the Ireland-Portugal Double Taxation Convention seeks to retain Irish taxing rights on gains from the disposal of certain shares for three years after an individual ceases to be Irish resident and becomes resident in Portugal. When the protocol is ratified by Portugal these taxing rights will be enforceable. Protocols to double taxation agreements, like double taxation agreements, come into effect on 1 January of the year following ratification by both parties.

I am informed that the Portuguese Government has confirmed that the procedure to ratify the protocol between Ireland and Portugal amending the double taxation convention is under way and, on the assumption that the ratification process is completed this year, the protocol would then take effect from 1 January 2007, which is the earliest possible date from which it can take effect.

I would also refer the Deputy to the impact of section 69 of the Finance Act 2003. That section amended our legislation to impose a charge to capital gains tax on an individual in respect of a deemed disposal of certain assets on the last day of the last year of assessment for which the individual is taxable in the State, prior to becoming taxable elsewhere, where the individual disposes of these assets while resident outside the State and returns to the State within five years.