Brendan Smith
Question:16 Mr. B. Smith asked the Minister for Finance the proposals, if any, he has to improve the tax situation of cross-Border workers; and if he will make a statement on the matter. [11555/97]
Written Answers. - Cross Border Workers.
Mary Harney
Question:25 Miss Harney asked the Minister for Finance the proposals, if any; he has to deal with the issue of taxation on cross-Border workers; and if he will make a statement on the matter. [11669/97]
I propose to answer Questions Nos. 16 and 25 together.
As I have explained numerous times in the House, cross-Border workers are treated no differently for tax purposes than any other State resident. I therefore can see no reason for devising proposals to improve their tax situation and thus give them preferential treatment over other Irish resident taxpayers.
Indeed, the issues involved in the taxation of cross-Border workers were throughly investigated by an interdepartmental committee which I established in 1995. This committee found that the treatment of cross-Border workers for the purposes of income tax if 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.
However, the committee did make other recommendations, most notably to exempt cross-Border workers from health and employment and training levies. As the Deputy is aware, I announced such an exemption in last year's budget and this was introduced in last year's Social Welfare Act.
The committee also recommended that cross-Border workers should avail of the direct debit system as a means of paying their Irish Tax Liability and this now applies for the preliminary tax payment which was due on 1 November in 1996 and which will fall to be due on 1 November of subsequent years. Full details of this system, including an explanatory leaflet are available from the Revenue Commissers.
A further recommendation of the committee was that there should be consultation between the Irish and UK revenue authorities on the scope of Articles 18, which is concerned with the taxation of governmental employees. Discussions between the two authorities on the scope of Article 18 and whether it should be amended to make it clearer what categories of employment are covered have been in progress for some time and it is hoped, will be satisfactorily concluded shortly. However, it should be noted that this possible amendment would cover only a small class of government employees and the position of cross-Border workers generally will not be affected by the outcome of the negotiations. It is important also to add that the 1976 Irish-UK Double Taxation Agreement is a bilateral one and any changes must be agreed to by the UK Government.