Máirín Quill
Question:27 Miss Quill asked the Minister for Finance the plans, if any, he has to introduce tax equity for cross-Border workers; and if he will make a statement on the matter. [11610/96]
Written Answers. - Taxation of Cross-Border Workers.
Desmond J. O'Malley
Question:47 Mr. O'Malley asked the Minister for Finance the plans, if any, he has to introduce tax equity for cross-Border workers; and if he will make a statement on the matter. [11609/96]
Brendan Smith
Question:48 Mr. B. Smith asked the Minister for Finance the proposals, if any, he has to amend the Irish and British double taxation agreement in 1976 in view of the fact that it affects cross-Border workers; and if he will make a statement on the matter. [11598/96]
I propose to take Questions Nos. 27, 47 and 48 together.
As the Deputies are aware, last year I established an interdepartmental committee to thoroughly investigate the issues involved in the taxation of cross-Border workers. I would like to remind the House of the main finding of this committee. This committee found that the treatment of cross-Border workers for the purposes of income tax is fair and reasonable vis-à-vis other Irish taxpayers. Consequently, the committee felt that there is no justification for any special income tax treatment of these workers as compared to any other category of Irish resident taxpayers. The committee did, however, make other recommendations, most notably, to exempt cross-Border workers from the health and employment and training levies. As the Deputies are no doubt aware, I announced such an exemption in this year's budget and this was introduced in this year's Social Welfare Act.
Regarding the question of tax equity for cross-Border workers, we must be clear as to whom we are comparing ourselves with. It is not appropriate for an Irish resident worker to compare his-her income with the income of a Northern Irish resident or other non-resident workers. We are all too aware that the income tax liabilities in this country are high but it is not true to say that cross-Border workers do not have tax equity, they do. They are treated the same for income tax purposes as any other resident taxpayer. Comparisons with nonresidents is neither appropriate nor valid.
As part of its work the interdepartmental committee examined the application of the relevant provisions of the 1976 Irish-British double taxation agreement. It recommended that consideration should be given to the renegotiation of this treaty with a view to resolving differences of interpretation which exist at present.
Since the committee reported, the Revenue Commissioners have been in negotiations with their UK counterparts with a view to resolving the differences of interpretation which exist in the present treaty. However, at this stage no decision has been taken as to the final outcome of these negotiations and therefore it would not be appropriate for me to comment further on this matter.
However, as I have said many times before, the issues involved in cross-Border taxation are complex, involving two jurisdictions, and the examination of these issues takes time. There are no easy solutions which will cater directly for the individuals affected while being fair to all the taxpayers involved i.e. both the cross-Border workers and all other Irish resident taxpayers.