Vol. 557 No. 1
99 Mr. Timmins asked the Minister for Finance his plans to amend the legislation with respect to the fact that there is no requirement to pay tax here for some individuals who reside abroad for a certain set period, and if he will make a statement on the matter. [21389/02]
I have no plans to change the existing rules. The general position is that an Irish resident individual is liable for income tax on his or her worldwide income. An individual will be regarded as being resident in the State for a tax year if he or she spends 183 days or more in the State in that tax year or spends 280 days in the State, combining the number of days spent in the State in that tax year and in the preceding tax year.
Presence in a tax year by an individual of not more than 30 days in the State will not be reckoned for the purpose of applying the two year test. Presence in the State for a day means the personal presence of an individual at the end of the day i.e. midnight.
These particular residence rules have applied since 1994 and were part of the new comprehensive set of rules on residence that were introduced that year. Prior to that the rules of residence were based on a mixture of legislative provisions, case law and administrative practice and were generally regarded as unsatisfactory and lacking in clarity. All tax authorities have rules to distinguish between residence and non-residence for tax purposes. The majority of EU states use the 183 days, or six months, rule as a criterion of residence.
It should also be mentioned that Irish source income is generally liable to tax in the hands of a non-resident individual except where the taxing rights involved lie with that individual's State of residence under the terms of a double taxation agreement between Ireland and that other state.
