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Ireland – Germany Double Tax Treaty

Ireland – Germany Double Tax Treaty

German investors interested in performing business activities in Ireland should know that they can benefit from the provisions of the Ireland – Germany double taxation agreement (DTA), a document signed between the representatives of the two states in order to avoid the double taxation on income incurred by the investors, residents of the two countries. At the same time, the treaty provides a legal framework for the avoidance of tax evasionOur team of lawyers in Ireland can offer legal assistance on the main regulations of the agreement and the ways in which they are applied by each country. 

Taxes covered by the Ireland- Germany DTA  

The taxation system is applicable only to the residents of Germany or Ireland, who can be natural persons or legal entities. 

The taxes which are the object of the treaty are the following in the case of Ireland

Although the states are supposed to apply the same taxes, the differences which appear between the taxes imposed are given by the national legislation of each country. However, the authorities are applying similar taxes, as agreed on the Article 2(4); our team of attorneys in Ireland can offer more details in this sense. 

Irish tax residents will be taxed on their income incurred in Germany for the following: 

  • the income tax;
  • the corporation tax;
  • the trade tax;
  • the capital tax. 

German investors in Ireland can reach out to our team of accountants in Ireland for more information about the DTA. Our accountancy services are suited for limited liability companies that are locally registered, as well as for foreign companies doing business in Ireland through a branch or a subsidiary. You can reach out to us for more information about our services.  

Taxation of business profits under the Irish – German DTA 

The concern of the treaty is the taxation of a foreign national residing in one of the contracting states, who creates taxable income in the other contracting state. As such, the general rule is that an Irish investor with operations in Germany will be taxed only in Ireland. However, the rule no longer applies if the Irish investor operates on the German market through a permanent establishment. 

In this case, the business profits will be taxed in Germany and, according to the Article 7(1), the taxation will be imposed only to the profits obtained in Germany. The same regulations are applicable for German investors operating on the Irish market

Businessmen who are interested in receiving more details on the Ireland – Germany double taxation agreement, can address to our Irish law firm for assistance concerning the main benefits.