Vol. 466 No. 6
36 Miss Harney asked the Minister for Finance the reason Irish persons working in Great Britain but subject to Irish tax are not eligible for a foreign earnings allowance; the plans, if any, he has to amend these regulations; and if he will make a statement on the matter. [12079/96]
A special foreign earnings deduction was introduced in section 154 of the Finance Act, 1994. That section introduced the deduction for persons resident in the State who work outside it for significant periods. It is aimed at those committed to working aboard for significant periods. It applies to persons who work aboard, other than in the UK, for a least 90 days in a period of 12 months in continuous periods of at least 14 days at a time. The relief operates on a proportionate basis related to the amount of time spent abroad in a year. Thus, broadly speaking, if a person works abroad for six months the relief is equivalent to half of the person's income for the year. The relief is not available to persons employed in the public sector.
Extending the relief to income earned in the UK would make the relief available to residents of this State crossing the Border to work in Northern Ireland. This would be likely to give rise to widespread abuse leading to significant Exchequer cost. It would also carry some risk of a relocation of economic activity north of the Border with further adverse consequences for Exchequer revenue.
