Brian Cowen (Laois-Offaly, Fianna Fail)

I saw the programme. As I indicated in my initial reply, the comment referred to was not based on any research carried out at that time. It was intended to outline the group's perception of a risk on which Revenue's new structures would need to be able to focus. Subsequently, the new structures I outlined in the reply have been doing that. Revenue have ways and means, which they do not publicise for obvious reasons, of checking and satisfying themselves as to the position. They are the people who do that.

When I outlined the position in regard to the budget last November I spoke about tax relief schemes. It was clear I was talking about tax relief schemes. As I understand it, when the Taoiseach was asked for his view on these matters in the House during the week he said he had no problem with the idea of it being monitored and reviewed. I have confirmed that the chairman of the Revenue Commissioners does that on a continuing basis through the relevant personnel who deal with these cases in the Revenue large cases division and that he will provide me with a report once an examination is complete. That can be done in the course of this tax year.

On the matter regarding the residency rule, that was updated in the 1994 Finance Act, when Fianna Fáil and Labour were in power, following a comprehensive review of the matter by the Revenue Commissioners and the Department of Finance. The person is regarded as resident in Ireland for tax purposes in a particular tax year if he or she spends 183 days in the State in that year or 280 days in aggregate in that tax year and the preceding tax year. This aggregation rule does not apply if he or she has been in the country for less than 30 days in the tax year being examined.

The key 183 day rule that contributes to determining residence in Ireland is also a key rule in other countries including Australia, Austria, Canada, the Czech Republic, Denmark, Finland, Germany, Italy, New Zealand, Norway, Portugal and Sweden. The United Kingdom, which still operates rules similar to our pre-1994 rules, published a background paper in 2003 aimed at reviewing its rules, acknowledging that its rules are complex and poorly understood.

As has been said, a person is regarded as having spent a day in the State if he or she is there at midnight. On the changes introduced by the then Government in the 1994 Finance Bill, it was the then Fine Gael spokesperson, Ivan Yates, who on Committee Stage of that Bill pointed out that the provisions as they were then drafted would render a person who stayed overnight in the State present in the State for two days rather than one. Hence the rule was changed to count only a presence at the end of a day.

See this speech in context