Michael McGrath
Question:193. Deputy Michael McGrath asked the Minister for Finance the tax arrangements that apply in the scenario outlined in correspondence (details supplied); and if he will make a statement on the matter. [42349/15]
View answerTuesday, 1 December 2015
Questions (193)
Written answers
Under section 819 of the Taxes Consolidation Act 1997 an individual is resident in the State where the individual is present in the State for 183 days or more in the year of assessment; is present for 280 days or more in total in the year of assessment and the preceding year; or where they elect to be resident. A day is defined as one on which the individual is present in the State at any time during the day.
Individuals who are tax resident in the State are charged to tax on all income, whether earned or arising in Ireland or abroad, including income derived from an employment or a profession.
I am informed by the Revenue Commissioners that, in relation to the case outlined in the details supplied by the Deputy, it would appear that, notwithstanding the proposed relocation of the place of work to Belgium, the individual in question will continue to be resident in Ireland for tax purposes and, therefore, taxable here on all income. Under the provisions of the Ireland Belgium Double Taxation Convention, Belgium will also tax the income derived by an Irish resident individual from a place of work in Belgium. Belgium will tax any income derived by an Irish resident from an employment which is exercised in Belgium if the individual spends more than 183 days there; the employer is tax resident there; or the income is directly borne by the employer's place of business there.
However, I am further informed by the Revenue Commissioners that under the provisions of the Ireland Belgium Convention, which seek to avoid or relieve double taxation, credit for any tax paid by the individual in Belgium will be granted against his or her tax liability in the State. The Irish resident may claim credit for such tax in their annual self assessment return or, if an employee, by way of a review of tax liability at year-end. If, however, the individual becomes resident for tax purposes in Belgium rather than Ireland, he or she could only be taxed in Ireland on so much of the income from any of his or her professional activities or duties as is derived from the performance of those activities or duties in Ireland.
In relation to the provision of information to taxpayers by the Revenue Commissioners, I am also informed that opinions or confirmations are provided to taxpayers in order to provide clarity and certainty in relation to the applicable tax/duty rules so that taxpayers can file a correct tax return and comply fully with their tax and duty obligations. While opinions/confirmations are not binding on Revenue, and it is open to Revenue officials to review the position when a transaction has been completed and all the facts are known, generally Revenue will follow an opinion/ confirmation once it can be shown that all relevant information was disclosed and the position did not diverge or deviate from that which was outlined in the information provided in relation to the request for the opinion/confirmation.
I am further informed that where, following a review or further consideration, Revenue revises its position, the taxpayer will be given notice of the revised position. In such a case, Revenue will not seek to retrospectively apply a tax/duty charge where it can be shown that all relevant information was disclosed, either at the time the application was made or following a request from Revenue for clarification, and that the information as then disclosed does not diverge from the actual facts.
I am informed also that, as part of its strategy to deploy compliance resources appropriately in order to maximise tax recoveries from the non-compliant and to minimise the administrative burden placed on largely compliant customers, the Revenue Commissioners, in 2013, initiated a programme of interventions to address non-compliance by some individuals who were providing their services through personal services companies. In 2014, over 400 audits of contracting companies and a further 300 audits of their directors were concluded, yielding €10.5 million. Over 80% of the audits conducted on companies and their directors resulted in a tax settlement. In its Report on the Accounts of the Public Services 2014, the Comptroller & Auditor General found that the audits carried out by Revenue under this initiative were targeted effectively.
Should the Deputy and the individual wish, I will pass further details of the case to the appropriate area in the Revenue Commissioners who will be glad to assist the individual concerned in determining his or her tax position taking account of his or her particular circumstances.