Mairead Farrell (Galway West, Sinn Fein) | Oireachtas source

I move amendment No. 17:

In page 20, between lines 25 and 26, to insert the following: “Report on Trans-Border Workers’ Relief in the context of Cross-Border Workers

16. The Minister shall, within six months of the passing of this Act, prepare and lay before Dáil Éireann a comprehensive report on the Trans-Border Workers’ Relief in the context of people who reside in the State and work in the North and the tax status and options of people who reside in the North and work in this State.”.

This amendment seeks that a report on the trans-border workers' relief in the context of cross-border workers be put before the Dáil within six months of the passing of this legislation.

I know this is an issue that Deputy Pearse Doherty has been raising a lot in recent years and it was also discussed on last year’s Finance Bill. It was raised in the context of those people who reside in the State but who work in the North and who avail of the trans-border workers’ relief. Obviously, this tax relief is not normally available for Irish residents who work from home in the State but, in the unprecedented circumstances arising due to the Covid-19 pandemic and the resulting public health restrictions to limit movement, for the tax years 2020 and 2021 Revenue confirmed that a concessional treatment for this relief would apply whereby, if employees are required to work from home in the State due to Covid-19, such days working at home in the State will not preclude an individual from being entitled to claim this relief, provided all other conditions of the relief are met. It should be noted that cross-border workers face the prospect of working from home in the context of continued public health advice possibly into 2022, with no real clarity on the future of the scheme and its operation.

The relief effectively removes the earnings from a qualifying foreign employment from liability to Irish tax where foreign tax has been paid on those earnings and such tax is not refundable. The effect of the measures means that individuals who qualify for the relief will not pay any Irish tax on their employment income, and that tax will only arise where the individual has income other than income from the qualifying foreign employment. There are a number of criteria that have to be satisfied in this regard.

The Minister undertook that the operation of the trans-border workers’ relief would be examined as part of the Tax Strategy Group in 2021, which would consider all relevant matters, including the equity of treatment between Irish residents who pay tax in the State, the competitive position of Irish employers and the established principles of international tax. Given the fact people are likely to continue to work from home in the coming months, it would be good to have this section included. I note the tax strategy paper reached a number of conclusions, and I am not going to go through them. Nonetheless, there are issues in the paper that are warranted and required and I would be interested to hear the Minister's views in this regard.

Section 6 of the paper considered the issue of social insurance and noted that social insurance rates in the North are higher than those in the South. However, the example at section 3.2, which considered equity, failed to take account of employees’ social contributions when comparing the effective tax rates paid in both jurisdictions. I would like a comment from the Minister on that because it could be a flaw that perhaps undermines the comparison.

The proposal of the Cross-Border Workers Coalition was to limit the number of days cross-border workers could work from the State to 183 while still being able to claim the relief. It proposed that other controls could be introduced, such as limiting the scope to those in non-executive roles and the potential consideration of a salary threshold. Given this is the case, and given the importance of developing the all-island economy and the move to remote working, further examination of this relief is warranted, and its extension is also warranted given the prospect of continued public health guidance.

I ask the Minister to accept the amendment and to go back to the drawing board and re-examine the issue, which is affecting cross-border workers, families and businesses, and to consider extending the relief in the context of Covid-19. I ask him to undertake work with my colleague, the Minister, Conor Murphy, in the context of the North-South Ministerial Council.