Dáil Éireann Debate, Tuesday - 9 February 2010
203 Deputy Thomas Byrne asked the Minister for Finance the position regarding income tax for a person resident and working here but employed by a Northern Irish company and paid in sterling; the position regarding excise duties in view of the fact that the person would be provided with a car registered in Northern Ireland as a company car to drive here in the course of their employment. [6786/10]
View answerThe position is that an individual resident in the State is chargeable to income tax here on his or her worldwide income. In addition, even if the individual were not resident here, he or she is chargeable to tax here in respect of income and benefits arising from an employment exercised in the State. In the case outlined by the Deputy, the salary arising from the individual's employment is chargeable to income tax here under what is known as Schedule E, with the employer making deductions at source under the Pay As You Earn (PAYE) system here.
Where a car is made available to an individual by reason of their employment, a charge to income tax arises in respect of this benefit in kind and the employer must also make the appropriate deductions under the PAYE system from the "cash equivalent" of the private use of the company car. Where an employer has to convert sterling to euro for the purpose of applying the PAYE system, Revenue will accept the exchange rate at either:
(a) the date of calculation, in the Employer's records, of the tax liability related to the payment, or
(b) the actual date of payment,
provided that the method chosen is used on a consistent basis, and where the rate at (a) is used, the date of calculation of the tax liability is not later than the date of payment. In addition, a vehicle provided by a Northern Irish company to an individual resident in the State for the purposes of that individual carrying out the duties here of his or her employment here must be registered in the State and the necessary Irish vehicle registration tax (VRT) paid.
The Deputy may be aware that there is a VRT and registration exemption in respect of cars temporarily imported into the State by persons established outside the State. However, from the information supplied by the Deputy, the car in question is not a temporary import and, therefore, does not qualify for VRT exemption and must be registered in the State.
