Ireland has officially enacted the Double Taxation Relief (Taxes on Income) (Jersey) Order 2024, paving the way for the ratification of a protocol to its 2009 tax treaty with Jersey. This protocol, signed on 23 November 2023, represents the first amendment to the original treaty, which was initially designed to address limited cases of double taxation.

Previously covered, Ireland and Jersey amended their tax treaty agreement on 23 November, 2023. The details of the amendments have recently been revealed.

The protocol updates the preamble to include not only the intention to eliminate double taxation but also to prevent opportunities for nontaxation or reduced taxation through tax evasion or avoidance.  It amends definitions of Article 3, particularly the meaning of the terms Ireland and Jersey; Mutual Agreement Procedure (Article 9) has been revised to allow for cases to be submitted to the competent authority of either Contracting Party; and Entitlement to Benefits (Article 9A) is has been introduced.

The tax agreement between the two nations was signed on 26 March 2009, and has been operational since 2010.

The new provisions will come into effect once both parties exchange ratification instruments and will apply from 1 January of the year following its enactment. This update is crucial for aligning the agreement with international standards, particularly those set by the OECD’s Base Erosion and Profit Shifting (BEPS) initiative.

The protocol aims to enhance tax compliance and prevent aggressive tax planning strategies by incorporating updated measures that reflect current global practices. This move underscores Ireland’s commitment to maintaining robust tax treaties that facilitate fair taxation for individuals and businesses operating across borders.