Mary Upton (Dublin South Central, Labour)
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Question 191: To ask the Minister for Finance the steps he has taken to ensure that tax exiles pay tax here; if he has examined tax systems in other countries that have been successful at tackling the tax exile phenomenon; and if he will make a statement on the matter. [3129/09]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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I am advised by the Revenue Commissioners that individuals who are resident in Ireland for tax purposes are taxable here on their worldwide income; and individuals who are not resident here for tax purposes pay tax here only on income arising in the State.

An individual is resident in the State if he or she spends 183 days or more (approximately six months) in Ireland during a tax year; or spends 280 days or more in Ireland over a period of two consecutive tax years. This approach to determining residence status is broadly in line with most other OECD countries and I have no plans at this stage to make further changes in this area.

As the Deputy will be aware, I have recently made a change to the so-called "midnight rule". Up until 1 January 2009, an individual was regarded as present in the State for a day, for tax residence purposes, only if he or she was present in the State at midnight on that day. Section 15 of the Finance (No. 2) Act 2008 amended the tax residence rules to provide that an individual will now be regarded as present in the State on a day if he or she is in the State at any time during the day, not just at midnight. This will apply for the 2009 tax year and subsequent tax years.