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Dáil Éireann debate -
Tuesday, 13 May 1997

Vol. 479 No. 2

Written Answers. - Cross-Border Workers.

Cecilia Keaveney

Question:

69 Cecilia Keaveney asked the Minister for Finance the advances, if any, which have resulted from his recent meeting with his counterpart Minister on Article 18 of the bilateral agreement with the United Kingdom regarding cross-Border workers; and if he will make a statement on the matter. [12716/97]

Cecilia Keaveney

Question:

70 Cecilia Keaveney asked the Minister for Finance the exact groups of workers currently covered by Article 18 of the 1976 bilateral agreement with the United Kingdom; and if he will make a statement on the matter. [12717/97]

I propose to answer Questions Nos. 69 and 70 together.

Article 18 of the Ireland-UK double taxation agreement is concerned with the taxation of governmental employees and it generally provides that they should only be taxable in the State of the government for which they work. To qualify under this Article, the employees must be rendering services to the Government or a local authority and must be discharging services of a governmental nature. Not all public service type employments would involve the discharge of services of a governmental nature. It was affirmed by a decision of the High Court that a health worker employed by a regional health board in Northern Ireland is not covered by the Article. In that case it was held that "functions of a governmental nature" means related to governing the country, which would include the functions of the ordinary Civil Service and of local government administrators, but would not include everyone paid out of the public purse.
In recent years, mainly as a result of changes in local government structures in Northerrn Ireland, problems have arisen concerning whether teachers who are employed by local education boards can be regarded as rendering their services to the UK Government or to a local authority. The UK tax authorities took the view that they were not and were accordingly not covered by Article 18.
I met Chancellor Gordon Brown in Brussels on Monday, 12 May at an ECOFIN meeting. I discussed this matter with him. He has undertaken to look at the issue following my representations.
Discussions are currently in progress at official level between the Irish and UK tax authorities on the scope of Article 18 and whether it should be amended to make it clearer what categories of employment are covered by the said Article.
While a number of other technical difficulties have been raised by the UK authorities, it is hoped that these discussions will be concluded satisfactorily shortly.
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