Gerald Nash (Louth, Labour)
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79. To ask the Minister for Finance if he is concerned at the low numbers who pay the domicile levy; if he plans to reform the levy; and if he will make a statement on the matter. [43387/23]

Gerald Nash (Louth, Labour)
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There is a growing debate in Ireland and globally about wealth inequality and the concentration of wealth in the hands of all too few people. The domicile levy was introduced in 2010 by one of the Minister’s predecessors, the late Brian Lenihan, and it was designed to get super-rich tax exiles to make some form of a contribution to the Exchequer at a difficult time for our economy. In reply to me last week, the Minister indicated that in 2021, only 13 people had paid the domicile levy, with €1.6 million collected. Does this small number, in terms of both the outturn and the number of people who paid, as well as the drop in the number of people who have paid in recent years, concern the Minister? Does he have any plans to reform the levy?

Michael McGrath (Cork South Central, Fianna Fail)
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I thank Deputy Nash for raising this issue. The domicile levy was introduced in the Finance Act 2010, as he said, to ensure Irish-domiciled individuals who met certain criteria would make a contribution to the Exchequer, irrespective of where they were resident for tax purposes. The purpose of the levy is to ensure individuals with substantial income and assets located in the State will make some sort of contribution to the Exchequer.

The levy is payable, on a self-assessment basis, on or before 31 October in the year following the valuation date. For example, the due date in respect of 2021 was 31 October 2022. Based on the most up-to-date figures provided to me by Revenue, as the Deputy noted, 13 domicile levy returns filed for 2021 incurred a liability for the levy for that year. The amount of the levy collected by Revenue in 2021 was just over €1.6 million, while returns for 2022 are not due to be filed until the end of this month.

To be liable for the levy, an individual must satisfy all qualifying criteria, one of which is that the person must have had an Irish income tax liability of less than €200,000 for the year. In cases where the individual has an Irish income tax liability that exceeds €200,000, he or she will not be liable for the levy.

The operation of the levy is kept under review by my Department and I understand Revenue carries out ongoing compliance activity in this area. The domicile levy will be further considered by my Department in the context of a planned examination and review of the remittance basis of tax in 2024. This review will include a public consultation, which will be published in the coming months.

Gerald Nash (Louth, Labour)
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I thank the Minister. As he said, the lower limit of the levy is set at €200,000 per year. Figures suggest 25 tax exiles paid it in 2011, the year of its introduction following the passing of the Finance Act 2010, but that fell to 13 people in 2021. It has effectively halved since its introduction. Why does the Minister believe that is the case? The Revenue Commissioners keep records on income tax returns and people are obliged every year to indicate to Revenue whether they are based in this country or exiled for tax purposes or what their position is. Will the Minister indicate, if he has the figures available, how many such declarations were made last year? If he does not have them, I would appreciate if he would forward them to me. The low level of return is hard to comprehend given that, according to a Central Bank report of last year, there was, for example, a huge concentration of wealth in the hands of the top 5% of income-earners and asset-owners in this country, with wealth growing appreciably.

Michael McGrath (Cork South Central, Fianna Fail)
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To clarify, what declarations or information is the Deputy looking for?

Gerald Nash (Louth, Labour)
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Declarations of income tax returns. My understanding is individuals must declare, when they are making a return, whether they are tax-resident.

Michael McGrath (Cork South Central, Fianna Fail)
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Okay. Of course, the levy applies to individuals who are resident and non-resident for Irish tax purposes, but I will respond formally to the Deputy on the specific point he raised. This is a self-assessed tax, so people are required to make the relevant return. The Revenue Commissioners are very active in the area of compliance in respect of the domicile levy and taxpayers are aware of their obligations in that regard. As the Deputy will know, it applies to individuals domiciled in Ireland whose worldwide income in the tax year has exceeded €1 million, whose liability to Irish income tax was less than €200,000 and who own Irish property on 31 December of the tax year where the market value of that property is greater in value than €5 million.

In truth, there is no doubt people engage in tax planning. These are generally high-net worth individuals with access to tax advisers who can help them minimise their tax liability legally. I have no doubt that that, in part, accounts for the reduction in the number, because it started in 2010 with 35 returns, has gradually fallen and now stands at 13 for the latest year for which we have information.

Gerald Nash (Louth, Labour)
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I hope the Minister will agree it is concerning. Given the drop in the number of both returns and outturns since the establishment and introduction of the levy, it ought to be kept under review. I hope he will agree also that high-net worth individuals should contribute more to the Exchequer and to the running of public services in this country from which they benefit.

I draw attention to comments made by the Commission on Taxation and Welfare in its report of last year, when it made the point the outturn from the domicile levy had been "negligible". There ought to be a better way of ensuring high-net worth individuals make a larger contribution, broadening the tax base and extracting more revenue from those with higher incomes and especially those with assets. That would really chime with the overall recommendation and the principles informing, for example, the Commission on Taxation and Welfare report, whereby we need to broaden the tax base and ensure a greater contribution will be made by those who have the most.

Michael McGrath (Cork South Central, Fianna Fail)
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Given the Deputy referred to the commission, it is important to point to its work. I earlier referred to the remittance basis of tax, which concerns how non-domiciled Irish residents are taxed on their worldwide income. The current rules permit long-term non-domiciled residents to avail of the remittance basis of tax, even though these individuals may have significant ties to the State. The Commission on Taxation and Welfare, which the Deputy mentioned, considered the remittance basis of tax in its report published in September of last year. As a matter of taxpayer equity, the commission recommended the remittance basis should be available only to resident but non-domiciled taxpayers for a maximum period of three years. The remittance basis of tax applies to non-domiciled but Irish-resident people, while the domicile levy applies to people who are Irish-domiciled but who may be non-resident. In the context of the commission's report, my Department will carry out a review of the remittance basis of tax next year and, as I indicated earlier, that will involve a public consultation. The domicile levy will also be reviewed, in tandem with the remittance basis of tax. I am giving a commitment to reviewing the domicile levy in that context.