U.S. GOVERNMENT PRINTING OFFICE

WASHINGTON : 

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79–112

" ! SENATE 106TH CONGRESS

1st Session

TREATY DOC.

1999

106–15

TAX CONVENTION WITH IRELAND

MESSAGE

FROM

THE PRESIDENT OF THE UNITED STATES

TRANSMITTING

CONVENTION BETWEEN THE GOVERNMENT OF THE UNITED

STATES OF AMERICA AND THE GOVERNMENT OF IRELAND FOR

THE AVOIDANCE OF DOUBLE TAXATION AND THE PREVENTION

OF FISCAL EVASION WITH RESPECT TO TAXES ON INCOME AND

CAPITAL GAINS SIGNED AT DUBLIN ON JULY 28, 1997

OCTOBER 29, 1999.—Convention was read the first time, and together

with the accompanying papers, referred to the Committee on Foreign

Relations and ordered to be printed for the use of the Senate.

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LETTER OF TRANSMITTAL

THE WHITE HOUSE, October 29, 1999.

To the Senate of the United States:

I transmit herewith for Senate advice and consent to ratification

the Convention Amending the Convention Between the Government of the United States of America and the Government of Ireland for the Avoidance of Double Taxation and the Prevention of

Fiscal Evasion with Respect to Taxes on Income and Capital Gains

signed at Dublin on July 28, 1997. The Convention, which was negotiated pursuant to the Senate’s resolution of October 31, 1997,

granting advice and consent to the 1997 Convention, modifies the

tax treatment of dividends received from Real Estate Investment

Trusts.

I recommend that the Senate give early and favorable consideration to this Convention and give its advice and consent to ratification.

WILLIAM J. CLINTON.PERSONAL COMPUTERJ079112-A015TD001-*****-*****-PAYROLL NO.: 95959 -NAME: WEST -FOLIOS: 3-7/10

-DATE: 10-29-99 -SUBFORMAT:

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LETTER OF SUBMITTAL

DEPARTMENT OF STATE, Washington, October 8, 1999.

The PRESIDENT,

The White House.

THE PRESIDENT: I have the honor to submit to you, with a view

to its transmission to the Senate for advice and consent to ratification, the Convention Amending the Convention Between the Government of the United States of America and the Government of

Ireland for the Avoidance of Double Taxation and the Prevention

of Fiscal Evasion with Respect to Taxes on Income and Capital

Gains Signed at Dublin on July 28, 1997 (‘‘the proposed Convention’’).

The Senate’s Resolution of October 31, 1997, providing advice

and consent to the 1997 Convention contained a declaration calling

for the United States to exercise its best efforts to amend the 1997

Convention in order to modify the tax treatment of dividends from

Real Estate Investment Trusts. The proposed Convention would

amend the 1997 Convention in response to the Senate’s declaration

by expanding the category of dividends from Real Estate Investment Trusts that are entitled to the same preferential tax treatment currently provided to portfolio dividends earned on other corporate securities.

Article 1 of the proposed Convention replaces Paragraph 4 of Article 10 (Dividends) of the 1997 Convention. It maintains the current rules for the treatment of dividends paid by a Regulated Investment Company, which will continue to be subject to U.S. withholding tax at a rate of 15 percent. Dividends paid by a Real Estate

Investment Trust will continue to be subject to the full U.S. domestic withholding rate of 30 percent in most cases, to reflect the fact

that an investment in a Real Estate Investment Trust is a substitute for a direct investment in real property, income from which

would be subject to the higher rate. However, a lower rate of 15

percent is provided for dividends paid by a Real Estate Investment

Trust where specified conditions are met indicating that the investment is more similar to a portfolio investment in other types of corporations than to an investment in real property. The proposed

Convention adds two additional categories of dividends that will

qualify for the reduced rate of withholding tax.

Article 2 of the proposed Convention provides that the proposed

Convention is subject to ratification, that the instruments of ratification shall be exchanged as soon as possible, and that the proposed Convention shall enter into force upon the exchange of instruments of ratification and shall have effect in respect of divi-
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dends paid on or after the first day of the second month next following the date on which the proposed Convention enters into

force.

The Department of the Treasury and the Department of State cooperated in the negotiation of the proposed Convention. It has the

full approval of both Departments.

Respectfully submitted,

MADELEINE ALBRIGHT.
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