Section 15 of the Finance Act 2006 enacted my Budget Day announcement providing for the discontinuance with effect from the current tax year of the remittance basis of assessment for income tax in respect of employment income insofar as that income relates to the performance in the State of duties of the employment.
I am informed by the Revenue Commissioners that individuals charged to tax on the remittance basis of taxation pay tax on the income concerned under the self-assessment system. The Revenue Commissioners further inform me that the data sought by the Deputy on the numbers of workers affected by the measure cannot be separately identified because all foreign-sourced income, including income charged on the remittance basis, is grouped together and assessed for income tax under what is termed Case III of Schedule D. In addition, those individuals chargeable on the remittance basis are obliged to declare only so much of the foreign income received in, or remitted to, the State. Accordingly, details of un-remitted employment income under foreign contracts, in respect of which Irish tax was forgone, are not required.
Therefore, while the Revenue Commissioners cannot quantify the exact number of employers and employees who were using the remittance basis, it was clear from information derived from normal Revenue operations that remuneration structures using the remittance basis were widely promoted. In particular, some offshore agencies targeted professionals such as pharmacists, doctors, dentists, engineers and architects, and others working in Ireland, offering foreign "off the peg" contracts purporting to ensure entitlement to the remittance basis.