Where a professional service is provided to accountable persons, which in the main include State and Semi-State bodies, these persons are required to deduct from the payments made appropriate tax which is a sum representing income tax at the standard rate in force at the time of payment. This tax is known as Professional Services Withholding Tax (PSWT).
I note the Deputy wishes to exempt non-EU persons from the operation of this tax. However, if an exemption were to apply to non-residents, whether based in other EU States or outside the EU, domestic companies providing similar professional services would be placed at a competitive disadvantage in tendering for contracts with State bodies. In addition, in some instances a non-resident person provides the professional service from a fixed place of business within the State and the income therefore would be subject to tax this State. The operation of PSWT assists in the collection of tax in such circumstances. Furthermore if exemption were to be provided to non-EU persons it would permit persons who are resident in jurisdictions which do not have a double taxation treaty with this State to avoid taxation on Irish source income and I do not consider that to be appropriate.
The Deputy will be aware that it is the standard practice for the Minister for Finance to review all taxation policy in the run up to the annual Budget. It is also a longstanding practice of the Minister for Finance not to comment, in advance of the Budget, on any tax matters that could be the subject of Budget decisions. However, it would not seem to me that there is a compelling argument for the change the Deputy suggests.