Ireland has for a long time positioned itself as a key entry point into Europe and has had virtually no treaties into Africa. Given that one of its key industries is the aircraft leasing business, with virtually every major aircraft and helicopter leasing company being based in Ireland, it was a strange oversight. This has proved problematic for aviation companies basing themselves in Ireland to service African aviation business and in particular the oil and gas business there.
Recently, however, the Irish have signed a number of double tax treaties into Africa. These include Botswana, Morocco and more recently Zambia. Whilst this is hardly following the oil and gas business they are quite interesting and very useful.
We highlight some features here:
Morocco treaty:
The domestic withholding tax on dividends is 15% and on interest is 10%. This is reduced under the Irish treaty to 6% and 10%. This makes the withholding tax paid on dividends to Ireland at one of the lowest available out of Morocco.
Zambian treaty:
The domestic withholding tax on dividends is 15% and on interest is 15%. This is reduced under the Irish treaty to 7.5% and 10%. This makes the withholding tax paid on dividends to Ireland a fairly respectable one but still not the lowest available which quite bizarrely belongs to Seychelles at 5%.
Botswana treaty:
The treaty entered into force in February 2016 and provides for a rate of withholdings on dividends of 5% and interest of 7.5%. It is only one of 9 treaties that Botswana has signed and is somewhat better than the one that Mauritius has managed which has 5% and 12% respectively.
Perhaps with all the pressure that Ireland has been facing in Europe with Google and Facebook etc there has been a move to build somewhat bigger links. We hope that this is the case and the Irish will finally start to support their aviation industry with a better all-round treaty network and not just a Euro-centric one.