Tuesday, 17 July 2012

Questions (98)

Robert Dowds

Question:

102 Deputy Robert Dowds asked the Minister for Finance the capability, if any, he has to levy tax on Irish tax exiles who officially live abroad. [34690/12]

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Written answers (Question to Minister for Finance)

The Programme for Government indicates that, as part of its fiscal policy, the Government will ensure that "tax exiles" make a fair contribution to the Exchequer. In Budget 2012, I abolished the "citizenship condition" for payment of the Domicile Levy to ensure that "tax exiles" could not avoid the levy by renouncing their citizenship. I also stated that I intend to keep the contentious issue of the tax treatment of "tax exiles" (which is linked to the tax residence rules) under constant review. In line with the position prevailing in many other jurisdictions, the capability to impose Irish taxation on an individual is linked to the residence status (i.e. resident or non-resident) for tax purposes of that individual. In general, an individual who is not resident here for tax purposes is taxable on his or her Irish source income and gains, on income attributable to duties of an employment exercised here, and on gifts and inheritances of Irish situated property.

The Programme for Government update in March 2012 confirms the commitment to undertake a consultation process on residence issues in 2012 to inform preparation for further changes in 2013. Earlier this year, I launched a public consultation on tax residence rules wherein I invited interested parties to make submissions on possible revisions to the current residence rules for the taxation of individuals. I welcome views on:

whether or not, and how, the current day counting rules should be amended;

whether or not, and how, the day counting rules should be supplemented with other rules;

the appropriateness of citizenship as a basis for taxation;

whether or not, and how, the conditions for and/or the range of application of the Domicile Levy should be changed;

whether or not the Domicile Levy should continue in place if the rules for determining residence were modified.

Any proposals should have due regard to:

the need to ensure that Exchequer tax yields are not undermined;

the continued promotion of Ireland as a location for inward investment;

their ease of administration;

their implications for arrangements in place under double taxation agreements with other jurisdictions.

Submissions should be made, at the latest, by 1 August 2012 and may be e-mailed to residence.consultation@finance.gov.ie or posted to:

Residence Consultation

Capital and Savings Taxation Policy Unit

Fiscal Division

Department of Finance

Government Buildings

Upper Merrion Street

Dublin 2