Joan Burton (Dublin West, Labour)
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Question 83: To ask the Minister for Finance if he has received a report from the Chairman of the Revenue Commissioners on the monitoring the Chairman had been asked to undertake of the application of the current non-residency rules for tax purposes; if not, when he expects to receive the report; if he anticipates any changes in regard to non-residency status in the next Finance Bill; and if he will make a statement on the matter. [26620/05]

Brian Cowen (Laois-Offaly, Fianna Fail)
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I have asked the Chairman of the Revenue Commissioners to monitor the application of the current non-resident rules through examination of cases handled in the Revenue large cases division and to provide me with a report once this examination is complete. The Chairman has confirmed to me that this work is under way and that he will report to me as soon as possible.

I am informed by the Revenue Commissioners that the procedures adopted with regard to validating a claim to non-residence status depend on the circumstances in each case. The administration of the validation procedures is a matter for the Revenue Commissioners and I am informed by them that these procedures are kept under review. I am, however, informed that the methods used to verify claims to non-residence include a range of tests and an intelligence dimension which for obvious reasons they do not publicise. In addition, the revenue has statutory powers to make all relevant inquiries concerning any aspect of tax returns, including claims to non-residence status. I am further informed that a number of audits are under way into claims to non-residence and that these audits will be a regular feature of the risk-based programmes operated by Revenue. In accordance with normal practice it is not appropriate for the Minister to comment on possible changes to tax in the run up to the annual budget and Finance Bill.

Joan Burton (Dublin West, Labour)
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The Minister outlined his request of the Revenue Commissioners to monitor the application of the current non-residency rules. Was there any time limit to that request? From a management point of view, did the Minister ask the Chairman of the Revenue Commissioners to report within six months, for example? In most organisations, if a report is requested, an indication is given as to when it will be completed. How many people are we discussing in terms of the large cases division and the intelligence dimension of the examination by Revenue? Could the Minister clarify the Cinderella rule? Is it true that one may leave this jurisdiction just before midnight for an unspecified period which could consist of one day or 30 minutes and at midnight this absence counts as non-residence? The Revenue report referred to in earlier discussions indicates that some people pay no tax because they are non-resident for tax purposes, yet appear to live here.

Brian Cowen (Laois-Offaly, Fianna Fail)
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The Deputy should be aware that the full residency rules were last updated in the Finance Act 1994 when Fianna Fáil and Labour were in Government, following a comprehensive review of the matter by the Revenue Commissioners and the Department of Finance. She knows what the rules are and we have discussed them on a number of occasions. The 183-day rule which 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 rules we have are in line with international practice. There is nothing unusual about that.

I do not have details of particular cases. As I said in my reply, I spoke to the Chairman concerning the report. He said that they were satisfied with the way matters were progressing. I asked him to monitor the situation and to forward a report to me in due course when he has completed it and he said he would. I can talk to him again about it.

Joan Burton (Dublin West, Labour)
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Will the Minister answer the question? If a person who is non-resident for tax purposes departs this jurisdiction at one minute before midnight for an undetermined duration, does that count in terms of non-residency? I understand that to be a critical part of Revenue's intelligence examination of non-residents. The Minister talks about chatting to the Chairman of the Revenue Commissioners, who will bring forward a report in due course. Does this entail two months or four years? Will the Minister indicate the numbers that Revenue has identified as falling within this category?

Brian Cowen (Laois-Offaly, Fianna Fail)
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I think the Deputy already knows.

Joan Burton (Dublin West, Labour)
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I am entitled to the courtesy of an answer.

Brian Cowen (Laois-Offaly, Fianna Fail)
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Of course the Deputy is. If I had the information available, I would give it to her. As I have not, I undertake to provide it if possible. She will understand from previous replies that there is no collation system within Revenue which could provide her with that figure immediately. It is another issue when she asks me a question to which she knows I do not have the answer.

In terms of the Cinderella rule, she is also aware from lengthy discussions on previous occasions that, by leaving before midnight, one is not deemed to have stayed in the country on that day. That is a well known fact which was agreed by Dick Spring in 1994, when Deputy Burton was a Minister of State.

Joan Burton (Dublin West, Labour)
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May one return ten minutes later? Is the Minister confirming that one can simply be out of the jurisdiction for a short artificial period, which would mean that a coach and four is being driven through any normal understanding of the non-residency rules?

Brian Cowen (Laois-Offaly, Fianna Fail)
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The Chairman of the Revenue Commissioners never indicated to me that a coach and four is being pushed through the non-residency rules. He makes clear that this matter is being monitored carefully by Revenue's own intelligence systems. I told him that this matter had arisen in the Dáil on previous occasions and asked him to forward me a report on the matter as soon as he possible can. I believe it will take a matter of months rather than years.

Séamus Pattison (Carlow-Kilkenny, Labour)
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I remind Members that a maximum of one minute is allowed for supplementary questions and replies thereto.