Written Answers. - Taxation of Cross-Border Workers.
Dermot Ahern
Ceist:
69
Mr. D. Ahern
asked the
Minister for Finance
the current position regarding the implementation of the recommendations from the committee set up by him to investigate the case of changed taxation regime for cross-Border workers; and if he will make a statement on the matter.
[6069/96]
John Ellis
Ceist:
86
Mr. Ellis
asked the
Minister for Finance
the plans, if any, he has to remedy the problems being experienced by cross-Border workers.
[6576/96]
I propose to take Questions Nos. 69 and 86 together. Last year I established an inter-departmental committee to thoroughly investigate the issues involved in the taxation of cross-Border workers and to make recommendations. Shortly before this year's budget, the committee presented its report to me.
The committee's main finding was that the treatment of cross-Border workers for the purposes of income tax is fair and reasonablevis-à-vis other Irish taxpayers. Consequently, the committee felt that there is no justification for any special income tax treatment of these workers as compared to any other category of Irish resident taxpayers. However, the committee recommended the following: that cross-Border workers should be exempted from paying the 1.25 per cent health contribution and the 1 per cent employment and training levy on their Northern Irish income; cross-Border workers should avail of the direct debit system as a means of paying their Irish tax liability which should help ease the compliance problems; and that consideration should be given to the renegotiation of the Irish/UK 1976 Double Taxation Treaty with a view to resolving differences of interpretation which exist at present, (i.e. the precise categories of workers covered by the Governmental Service Article).
Having studied and accepted all the findings of the committee, I announced on budget day that from 6 April 1996 the Northern Irish earnings of cross-Border workers will be exempted from the payment of the health and employment and training levies. For a person with a yearly earnings of £15,000, the savings is £337.50 per annum.
In addition, I have been informed by the Revenue Commissioners that the direct debit system which cross-Border workers can avail of in order to pay their Irish tax liability now applies for the preliminary tax payment due on 1 November 1996 and on 1 November of subsequent years. Full details of this system, including an explanatory leaflet, are available from the Revenue Commissioners.
I also understand that the Revenue Commissioners have been in negotiations with their UK counterparts with a view to resolving the differences of interpretation which exist in the present treaty. Given that these negotiations are ongoing, it would be inappropriate for me to speculate at this stage as to the possible outcome of such negotiations.
Finally, I would like to put on record that I am satisfied that the committee on cross-Border taxation approached the issues involved in a fair and reasoned manner. I have accepted the committee's findings and recommendations and, where possible, I have acted upon them without undue delay.
