asked the Minister for Finance if he is aware that residents of the Republic of Ireland who work in Northern Ireland are obliged to pay tax under the PAYE system under the Double Taxation Convention between the Republic and the United Kingdom; and if he will make a statement on the matter.
Ceisteanna—Questions. Oral Answers. - Double Taxation Convention.
9.
(Clare): The effect of Article 15 of the double taxation convention of 1976 between this country and the United Kingdom is that an individual who is a resident of the State and who is employed in Northern Ireland is chargeable to British tax on his earnings from that employment. He is also entitled under Article 22 of the Convention to the benefit of the same personal allowances and reliefs for purposes of that tax as a British subject not resident in the United Kingdom. Such an individual is also chargeable to Irish tax on the earnings referred to but a credit is given for British tax on those earnings.
Would the Minister not agree that taxation law makers do not take into consideration the great inconvenience to people living in Border areas where they live on one side of the Border and work on the other? Does the Minister consider it fair that someone working in Northern Ireland and living in the Republic pays PAYE in the North and if his earnings exceed his tax free allowance in the Republic he must again pay additional taxation? This would be reasonable if it balanced out in reverse but the same thing applies if someone living in Northern Ireland is working in the Republic. He pays PAYE in the Republic and must then pay taxation on his earnings in the North if it exceeds his tax free allowance. Does the Minister not consider that totally unfair and insensitive as far as these people are concerned?
(Clare): A bilateral agreement has been in existence for a number of years. It is one of the many bilateral agreements in operation in this respect. With regard to people living on this side of the Border and working on the other, up to a certain level they pay more tax. In certain instances they would pay more here as their salary would increase. With regard to the person about whom the Deputy supplied details, it has been explained to that person who lives on this side of the Border. He accepts that it is a reasonable agreement.
Would the Minister agree that the taxation law makers from the Republic who deal with Britain are totally insensitive to the relationship of people living on both sides of the Border and that the laws are forcing people who work on one side of the Border to live there?
(Clare): Surely this was a consideration at the time of the drafting of the bilateral agreement and must have been the subject of discussion. The taxation law makers would not have been immune to that, yet it is accepted by many people involved that the agreement is reasonable.
Does the Minister of State accept that these laws force people to live in the area they are working in although they might not want to live there?
(Clare): If the Deputy says so, as he is from that area, I am sure it has some credence, but I was not aware that it was forcing them as to where they would live. This is a bilateral agreement and the only way that anything can be done in that respect is to renegotiate the entire agreement.
I accept that, but the laws which the Government are making are forcing people to recognise Partition. The Government are saying that if people work on that side of the Border then they must live on that side of the Border, that they are constructing more Partition by their taxation laws and every other law.
Deputy, you are making a statement.
Is the Minister of State aware that the laws which his Government enact and agree bilaterally with the British Government are partitionist laws and the Government are proclaiming——
You cannot go into that now.
This is the purpose of my questions.
(Clare): I do not accept what the Deputy said about this Government any more than I would about previous Governments.
Would the Minister of State agree to have a look at the bilateral tax agreement with Britain in regard to the points made by Deputy Harte and perhaps to refer the matter either to the Commission on Taxation or some other appropriate body so that the matter can be looked at in a dispassionate way?
(Clare): I will arrange to have it looked at to see if it should be renegotiated in view of what has been raised here.
Would the Minister make a point to the Cabinet when they are considering laws vis-à-vis the relationship between North and South, that if they take a political stand on being anti-partitionist or in favour of a united Ireland that they let the laws be consistent with that?
(Clare): I do not accept what the Deputy is saying about partitionist laws.