This Order gives the force of law to the Convention with the United States of America which is set out in the Schedule. This Convention replaces a previous Double Taxation Convention between Ireland and the United States of America which had been in effect since 1951. The effect of the new Convention is summarised below.

The Convention provides for the allocation of taxing rights between Ireland and the United States and for the relief or elimination of double taxation by:

 - exempting certain items of income from tax in the country where they arise (e.g. interest, royalties and social security payments), or

 - reducing the rate of tax on certain items of income in the country where they arise (e.g. dividends), or

 - providing guidelines for allocating profits between the two countries (e.g. in the case of a permanent establishment or inter-company sales).

Where both countries retain taxing rights on the same income or gains, for example in the case of business profits arising through a permanent establishment which a person resident in one country has in the other country or in the case of capital gains arising from the disposal of immovable property or shares linked with immovable property, the Convention provides for double taxation to be relieved by the country where the taxpayer is resident granting credit for tax paid in the source country.