The Double Taxation Treaty between the Czech Republic and Ireland has been signed at the end of 1995. The Treaty introduces a modified definition of when an Irish entity has a Czech taxable permanent establishment through the provision of services (including consultancy or managerial services) in the Czech Republic. The permanent establishment arises if such services are provided for a period exceeding in the aggregate six months within any twelve-month period and the furnishing of the services requires the use of facilities located in the other contracting state.
Dividends paid by a company which is a resident of one state to a resident of the other state are subject to taxation in the first mentioned state. However, the tax imposed in this state should not exceed:
5% of the gross amount of the dividends if the beneficial owner is a company (other than a partnership) which holds directly at least 25% of the capital of the company paying the dividends,
15% of the gross amount of the dividends in all other cases.
Interest arising in one state and paid to a resident of the other state is taxable only in that other state if such resident is the beneficial owner of the interest.
Royalties arising in one state and paid to a resident of the other state are taxed in the first state according to the laws of the state, but if the beneficial owner of the royalties is a resident of the other state the tax should not exceed 10% of the gross amount of royalties.
The content of this article is intended to provide general information on the subject matter. It is therefore not a substitute for specialist advice.
For additional information contact Paul Antrobus or Richard Fletcher on 42/2/2440 1300. Or enter text search 'Arthur Andersen' and 'Business Monitor'.
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