asked the Minister for Finance if he is aware of the confusion and inconvenience caused to workers from Donegal, employed in Northern Ireland, as a result of complicated income tax regulations governing such people; and if he will introduce simplified income tax legislation to ensure that ordinary people understand their income tax assessments.
Written Answers. - Border Tax Complications.
136.
I am not aware of the confusion or inconvenience to which the Deputy refers. As he knows, these workers are concerned with taxation under two jurisdictions and consequently their taxation position is not as straightforward as it would be if they were employed within the State.
The regulations governing the taxation of their remuneration arise out of the Double Taxation Agreement with the United Kingdom, signed on 2 June 1976. Under Article 15 of that agreement, Irish residents exercising an employment in the United Kingdom became chargeable to tax there on their remuneration as from 1977-78. That tax is deducted from their remuneration under the PAYE system in force there. As Irish residents, the workers continue to be chargeable to Irish tax but are entitled to double taxation relief, under Article 21 of the agreement, by the grant of a credit for the United Kingdom tax payable against the Irish tax charged on the same earnings.
The Deputy may recall that, as a transitional measure, in view of the fact that the workers became liable to United Kingdom tax under the PAYE system, special provision was made in the Finance Act, 1978 as a result of which one half year's tax was remitted.
Question No. 137 postponed.