Brian Cowen (Laois-Offaly, Fianna Fail)

Taxpayer confidentiality requires that a Minister for Finance does not answer a parliamentary question about the tax affairs of an individual or company, other than when the Deputy is asking the question on behalf of the individual or company. I regret I cannot comment on the tax affairs of any taxpayer.

However, by way of general comment, the Revenue Commissioners inform me that the question of whether the deduction of tax under the PAYE system applies to emoluments paid to workers brought to Ireland from a non-European country for the purpose of employment in the construction industry, or any industry, depends on the facts and circumstances prevailing in any specific case. For example, the emoluments payable to an individual working here under an Irish contract of employment are subject to deductions of tax at source under the PAYE system. Where the foreign employing company has a subsidiary company in Ireland, emoluments paid by that Irish subsidiary to individuals working here are also subject to deduction of tax under the PAYE system.

On the other hand, an employee working here under a foreign contract of employment and who is paid outside of Ireland by that foreign employer does not pay tax here under the PAYE system but rather is personally responsible for payment of Irish tax under the self-assessment system on his or her salary.

Individuals resident here who are not Irish domiciled can avail of a long standing statutory tax relief, more commonly known as the "remittance basis", against their foreign source income including employment income.

In brief, individuals resident here who may avail of the "remittance basis" relief pay tax here on the full amount of their Irish and UK source income and on that amount of their non-Irish and non-UK source income, including employment income, brought into the State.

Ireland normally includes a specific provision in its double taxation agreements dealing with the remittance basis of taxation in Ireland. It provides that where an individual is subject to tax in Ireland by reference to the amount of income or gain remitted rather than the full amount, any exemption or relief required to be granted in the other country under the double taxation agreement will apply only to the income or gains remitted to or received in Ireland. This is aimed at avoiding a situation where the income or gains are not taxed in either country. There is no double taxation agreement between Ireland and Turkey. However, negotiations are ongoing to conclude such a treaty but it is not possible at this stage to state when these negotiations will be finalised.

Issues relating to PRSI are a matter for the Minister for Social and Family Affairs. However, my understanding is that exemption from payment of social insurance employment contributions, for a period not exceeding 52 weeks, can be granted in respect of the temporary employment of persons who are not ordinarily resident in the State. Such exemptions are subject to the employee in question having a valid work permit and confirmation by the employer that social insurance contributions are paid in the employee's home country. Employees granted exemptions have no entitlement to social insurance benefits in this country during the period of the exemption. Should an employee continue to work here after the period of the exemption, PRSI contributions are payable in the normal manner through the revenue system.

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