Dáil Éireann debate -
Tuesday, 2 Mar 1993

Vol. 427 No. 2

Written Answers. - Income Tax Regime.

Gerard Collins

Question:

59 Mr. Collins asked the Minister for Finance if he will give details of the income tax regime which applies to foreign business executives living in this State and working for foreign companies; and the way in which this regime corresponds with the tax provisions for expatriate executives in other EC member states.

Minister for Finance (Mr. B. Ahern)

I understand from the Revenue Commissioners that the Irish tax treatment of an individual who comes to Ireland for employment will depend on a number of factors including:

—whether the individual is resident in Ireland for tax purposes;

—whether the individual is domiciled in Ireland; and

—the existence of a Double Taxation Agreement between Ireland and the country from which the individual has arrived.

The Deputy will appreciate that this is a complex area and that it is difficult to provide general information which will suit all circumstances. However, the following is the position in the case of certain categories of individuals who come to Ireland for employment:

—individuals who are resident in Ireland but not domiciled here are taxable on Irish and United Kingdom income and on remittances of income arising from securities and possessions outside the State;

—individuals who are non-resident in Ireland are taxable on all income arising in Ireland: income arising from securities and possessions outside the State is exempt from Irish tax; and

—individuals who are resident in Ireland and are domiciled here are taxable in full on Irish and world income. Their liability on income from an employment exercised wholly outside the State may be reduced to the amounts remitted to Ireland.

An individual who is resident in Ireland for tax purposes is entitled to full tax free allowances and reliefs. A non-resident is normally not entitled to any personal allowances or reliefs. However, certain individuals may be entitled to a portion of personal allowances — these include Irish citizens, certain British subjects and residents or nationals of a country with which Ireland has a double taxation agreement which provides for such allowances.

Ireland has double taxation agreements with 22 other countries. The provisions of a double taxation agreement will have implications for the taxation position of an individual who comes to Ireland for employment, provided the individual comes from a country with which Ireland has a double taxation agreement. Where a double taxation agreement exists, double taxation is avoided by

1. exempting the income from tax in one of the countries; or

2. allowing a credit in one country for tax already paid on the same income in the other country.

It would not be possible for the Revenue Commissioners to provide detailed information on the manner in which other EC member states tax visiting foreign executives. This is a complex subject which involves the domestic taxation rules of each of the states and the provisions of each of the bilateral double taxation treaties signed by each of those states.

If the Deputy has a specific query relating to the taxation of a certain individual, the Revenue Commissioners will be happy to provide whatever assistance is possible in that matter.