France-Ireland Double Tax Treaty
France-Ireland Double Tax TreatyUpdated on Wednesday 13th April 2016
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French investors interested in the business environment available in Ireland should know that they can benefit from the provisions of the double taxation treaty (DTA) signed by France and Ireland. The treaty between the two states was signed in March 1968 and it entered into force in 1971. The agreement stipulates the taxes applied by the French and Irish parties, in order to avoid the double taxation of individuals and legal entities carrying out various taxable activities on the territory of the both countries. French businessmen who want to find out more details on the tax deductions they are entitled to, can receive an in-depth presentation from our team of Irish solicitors.
Taxes under the France- Ireland DTA
French entrepreneurs who want to establish a company in Ireland can benefit of several tax exemptions for the taxes specified by the DTA.
It is important to know that France will impose the following income taxes, as prescribed by the local legislation:
• the tax on income of individuals;
• the complementary tax;
• tax on companies, which refers also to the withholding tax.
According to the agreement, Ireland will impose the following two taxes:
• the income tax;
• the corporation profits tax.
The difference between taxes applicable in the two contracting states is given by the local taxation system available in each country, but it should be mentioned that the parties have agreed to impose similar taxes; our team of Irish attorneys can provide more information in this sense.
The permanent establishment under the DTA
The France-Ireland DTA provides a definition for the understanding of the permanent establishment (PE), which can be a fixed place of business in which a company carries out its operations (the meaning is still applicable for companies which carry only parts of their operations in one of the contracting state).
A PE can refer to a branch, an office, a factory or a mine, but also a construction site in which the operations are carried out for a period longer than a year. The term is very important for the France-Ireland DTA because if a French company operates in Ireland through a PE, its business profits will be taxed in Ireland, but only for the income obtained through the PE; but as a general rule, a French company will be taxed for its income in France.
If you need further information on the France-Ireland double tax treaty, please contact our team of solicitors in Ireland, for legal assistance related to this subject.