Dáil Éireann debate -
Wednesday, 27 May 1992

Vol. 420 No. 4

Written Answers. - State-Sponsored Bodies' Overseas Account.

Pat Rabbitte

Question:

18 Mr. Rabbitte asked the Minister for Finance if his attention has been drawn to the decision by four State-sponsored bodies to open an account in a bank in Jersey to facilitate tax-free payments to employees and consultants working abroad; if his approval was sought and given for this move; if he will outline his views on the purpose for which the account was opened; and if he will make a statement on the matter.

Minister for Finance (Mr. B. Ahern)

I take it that the Deputy is referring to the fact that International Development Ireland Ltd. (IDI) operate an account in a bank in Jersey. IDI is jointly owned by four State-sponsored bodies, the Industrial Development Authority, An Bord Tráchtála, the Shannon Free Airport Development Company and the Industrial Credit Corporation, and was set up to promote, on a commercial basis, overseas consultancy activities by the four bodies.

The Jersey account was opened by IDI in 1989. The approval of the Minister for Finance was not sought for the opening of the account, nor was it necessary to seek it. Central Bank approval was obtained. The Revenue Commissioners were notified of the Company's intention to set up the account.

The Deputy's question seems to refer to Irish residents going to work on consultancy assignments abroad for IDI. Briefly, if the period of employment abroad covers a period including a full tax year, the individual is considered non-resident in Ireland for the period and no liability to Irish tax will arise on the salary or fee earned abroad. On the other hand, where an individual is working abroad in a country other than the UK on a short term contract for less than a full tax year and is paid from a foreign pay point, liability to Irish tax is in practice confined, under Section 76 (4) of the Income Tax Act, 1967, to amounts remitted to Ireland. An individual liable to Irish tax on such remitted amounts is obliged to declare these amounts to the Revenue Commissioners and pay tax on them in accordance with the self-assessment system. I am informed that the purpose for which the IDI account was opened was to establish a valid foreign pay point so as to bring such payments through it within the scope of Section 76 (4) of the Income Tax Act, 1967. The account is also used to pay non-resident consultants and companies, and to receive some of IDI's overseas receipts.