Michael McGrath (Cork South Central, Fianna Fail) | Oireachtas source

I move amendment No. 97:

In page 119, between lines 24 and 25, to insert the following:“Amendment of Taxes Consolidation Act 1997
92. The Taxes Consolidation Act 1997 is amended by the insertion of a new section after 195A—

“Non residents: certain expense payments
195B. (1)In this section—

‘associated company’ has the same meaning as in section 432; ‘company’ has the same meaning as in section 4 disregarding (a) to (e);‘director’ and ‘employee’ have the meanings respectively assigned to them by section 770(1); ‘relevant meeting’ means a meeting in the State of the board, or a subcommittee thereof, of a company of an associated company.

(2) This section applies to payments made by a company to or on behalf of a director or employee in respect of expenses of travel and subsistence incurred where—

(i) the director or employee is not resident in the State,
(ii) the director or employee travels to the State to attend relevant meetings, and
(iii) the expenses are incurred in connection with the attendance of the individual at relevant meetings.

(3) Payments of expenses to which this section applies shall be disregarded for all the purposes of—

(i) the Income Tax Acts, and
(ii) the Social Welfare Acts.”.”.

This issue was brought to my attention by tax practitioners and I would be interested to hear the Minister's response to it. The point being made to me is that, for example, if a company in Ireland appoints an overseas director, who flies into Ireland several times a year for board meetings, the Revenue's current position is that the director's flight and hotel costs are a benefit in kind and he or she ought to be subject to income tax on that. In contrast, if European civil servants comes to Ireland for a meeting with the Department of Finance, they would not pay BIK, so there is inequality of treatment with businesses seeking to avail of overseas expertise to improve their firm. Although Revenue claims this has always been its view, many industries have had specific rulings from Revenue to the contrary. It is an interesting question. Should a director of a company here, who is living abroad and travelling to and fro, be subject to BIK on costs which were incurred necessarily in order to attend meetings here?