asked the Minister for Finance if he will grant double taxation relief to a person (details supplied) in County Galway who works permanently as a surgeon in the Faroe Islands and is subject to tax in both countries; and, if double taxation relief is granted, if a refund of taxes will be paid to date in this country, while he works in the Faroe Islands; and if he will make a statement on the matter.
Written Answers. - Double Taxation Relief.
763.
As an Irish resident the taxpayer is liable to Irish income tax on his total income regardless of source. Under the terms of the Ireland/Denmark Double Taxation Convention the taxpayer, if employed in Denmark, would be taxable in Denmark on his Danish income but would be entitled to credit such tax against his Irish liability. However, in this case, the taxpayer is employed in the Faroe Islands, a semi-autonomous region of the Kingdom of Denmark which has local independence in the matter of taxation and which is specifically excluded from the operation of the Ireland/Denmark Convention. The extension of the convention to cover the Faroe Islands is a matter which would require the agreement of the Danish and Faroese Governments.
As regards present liability to Irish tax, there is no provision in Irish tax law under which a credit in respect of Faroese taxation may be granted. However, some measure of relief is being afforded to the taxpayer. Firstly, he is being subjected to Irish tax only on so much of his income as is remitted to this country. Secondly, following correspondence between the Revenue Commissioners and the Danish and Faroese authorities, the latter have concessionally agreed to grant the taxpayer a tax allowance for payments to his children corresponding to the standard allowance in the Faroe Islands. Under normal circumstances, as the taxpayer's wife and children reside permanently in Ireland, the Faroese authorities would regard him as a single person for Faroese tax purposes and would not recognise his family status in any way.
As regards the question of a refund of tax, no Irish tax has yet been paid by the person concerned in respect of his Faroese income as the assessments are under appeal.