Recent Decisions On International Taxation Porus F Kaka Advocate

1. Recent Decisions On International Taxation Porus F Kaka Advocate

2. Case Study 1 Kinsella vs Revenue Commissioners (2007) IEHC 250 Irish High Court Commission Division

3. In 2002 Mr Shane Ryan owned substantial share holding in Ryan Holdings PLC • March 2002 Plaintiff & Mr Ryan contacted Tax Experts to advise on opportunities to avoid tax on disposal of shareholding • 16-07-2002 Plantiff marries Mr Ryan

4. September 2002 on request of Tax Adviser, Revenue Commissioner replied that Irish capital gains tax covered under Italy/Ireland DTA • December 2002 Revenue Commissioner’s reply on definition of “Day” under DTA

5. 13-06-2003 Plaintiff obtained a Permesso di soggiorno • 24-06-2003 she let a tiny apartment and was registered on the anagrafe • 25-09-2003 purchased shares in Ryan Air Holdings from husband in excess of 18 million euros. No monies changed hand

6. No CGT as transaction between spouses • On 10-10-2003 sold shares to third party for a sum in excess of 19 million euros • Return filed claiming Plaintiff’s residence in Italy and no CGT in Ireland. Return accompanied by an “expression of doubt”

7. Questions before the Court • Is CGT Tax on capital or Tax on income ? • Is it identical or substantially similar to Income Tax and therefore covered by the DTA ? • Definition of “Day” in DTA ought to have its meaning as per Irish Law or Italian Law ?

8. HELD • (a) Taking guidance from the OECD model convention – CGT is a tax on gains or profits rather than on capital wealth (b) It is substantially similar to the taxes existing and mentioned in the convention • (a) In accordance with recent 3 (2) definition of Day has to be as per Ireland’s Domestic Law (b) Court refuses to adjudicate upon other issues