Dáil Éireann Debate, Tuesday - 18 May 2010
197 Deputy Michael McGrath asked the Minister for Finance the position regarding a person who is employed in the UK but lives in Ireland with their family and who wishes to pay income tax in Ireland rather than to the UK authorities. [20478/10]
Amharc ar fhreagraI am informed by the Revenue Commissioners that it is not open to an individual to choose to pay income tax in any particular jurisdiction. Rather, the individual's income tax liabilities and obligations are governed by the domestic tax legislation of the particular jurisdiction. Relevant factors in this regard include:
where the individual is resident for tax purposes;
where the income arises; and
where the duties of a trade, profession or employment are exercised. In the type of case described, there are generally two scenarios—
Scenario A
If the individual to whom the Question refers is not, under the rules of tax residency, resident in the State for tax purposes and exercises the duties of his or her employment in the UK, then the UK employment income is not taxable here.
Scenario B
If the individual to whom the Question refers is, under the rules of tax residency, resident in the State for tax purposes and exercises the duties of his or her employment in the UK, then he/she has an obligation to submit a tax return in the State and is liable to tax here on his or her UK employment income. However, it is likely that the UK employment income will remain liable to UK tax. Put simply, in this scenario, the individual's UK employment income is taxable both in the UK and here.
This ‘double taxation' of the same income may be relieved either under a relief found in Irish domestic tax legislation or under the terms of the Ireland / UK double taxation agreement. I am further informed by the Revenue Commissioners that the relief most likely under Irish domestic tax legislation to be relevant in such a case is the relief known as the ‘transborder relief' which is designed to give income tax relief to individuals who are resident in the State for tax purposes but who commute daily or weekly to their place of work abroad and who pay tax in the other country on the income from that employment. Under the Ireland / UK double taxation agreement, in general, the double taxation is relieved by way of Revenue granting a credit against Irish tax due on the UK salary for final UK tax paid on the same salary. The individual concerned may wish to consult with the Department of Social Protection as regards the PRSI implications of his or her situation.
