Dáil Éireann debate -
Tuesday, 27 Mar 2001

Vol. 533 No. 3

Written Answers. - Tax Reliefs.

Richard Bruton

Question:

166 Mr. R. Bruton asked the Minister for Finance if he will consider amending tax laws in order that members of the public service or of the Garda Síochána who take up posts abroad, particularly where they are contributing to Ireland's obligations under United Nations membership, should be able to avail of the tax arrangements that apply to private sector workers working overseas, whereby after a certain number of days abroad they are no longer taxable in Ireland; and if he will make a statement on the matter. [8548/01]

Minister for Finance (Mr McCreevy)

Section 823 of the Taxes Consolidation Act, 1997, provides tax relief by way of a deduction against earnings in the case of certain Irish resident employees who work overseas, other than in the UK, during a tax year. The relief does not apply to employees paid out of the public revenue of the State, for example, civil and public servants, military personnel or employees of any State board or bodies. Thus, to qualify, a person must work abroad for at least 90 days in a tax year or in a relevant period. A relevant period is a continuous period of 12 months straddling two tax years. However, no one day can form part of two relevant periods. Each period of absence must include a continuous period of at least 11 consecutive days referred to in law as qualifying days. The amount of the deduction is related to the time spent on a foreign employment but there is an overall cap of £25,000 on the amount of the deduction which may be availed of by the individual in any one tax year.

In relation to employees of a public body, however, where such employees are seconded to a subsidiary of that body they will qualify for the foreign earnings deduction in respect of that employment. It is not necessary that the employees be transferred to the payroll of the subsidiary, provided they are seconded to the subsidiary and their salary is recharged to the subsidiary. They can therefore remain in the pen sion scheme, etc. of the public body which will recharge the costs of these employees to the subsidiary. In calculating the foreign earnings deduction the employment income includes income from the public body prior to the secondment but days abroad prior to the secondment are ignored.

I have no plans to make any amendments to the legislation as proposed by the Deputy. However, I should point out that this relief has had to be amended in the last two Finance Bills and the current Finance Bill to combat abuses and a termination date of 2003 has now been introduced to enable the relief to be reviewed.