The special £5,000 seafarer's income tax allowance referred to by the Deputy and the correspondent concerned is a unique, sector specific, fiscal incentive aimed at reducing EU seafarer labour costs in accordance with EU maritime policy. The allowance operates as follows: section 472B of the Taxes Consolidation Act, 1997, provides for a seafarer's allowance of £5,000 for seafarers absent from the State for at least 169 days in a tax year for the purposes of performing duties of employment on a sea-going ship on an international voyage. Section 472B(2) specifically defines absence from the state for a day as absence from the State at the end of the day. This is in line with the definition of presence in the State for residence purposes contained in section 819(4) of the Taxes Consolidation Act, 1997.
Following approval of the allowance by the European Commission under EU maritime state aid guidelines in December 1998, I successfully secured an extension of the allowance to qualifying seafarers working on board vessels servicing mobile or fixed rigs and platforms of any kind in any areas designated under the Continental Shelf Act, 1976, that is, in Irish waters. This amendment was included in the 1999 Finance Act and it received European Commission approval in June 1999.
My Department and the Department of finance keep the range of fiscal allegation measures applicable to the shipping industry under continuous review having regard to their objective to maximise employment of Irish seafarers and support and facilitate the development of a competitive Irish flagged and owned shipping sector. The measures involved, as well as the special seafarer's tax free allowance, include beneficial rates of corporation tax and PRSI refunds to employers of seafarers. The views of the person in question will be taken fully into account in the context of this ongoing review and in light of the need to encourage greater productivity and competitive manning practices in our shipping sector.
