Jan O'Sullivan (Limerick East, Labour)
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Question 217: To ask the Minister for Finance the reason the €3,500 limit whereby a PAYE worker can declare income in relation to a holiday home in Ireland through the PAYE system is not the same for a person who receives income on such a home in another EU country; the further reason such a person has to use Revenue Form 11E rather than the PAYE system; and if he will make a statement on the matter. [15222/10]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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I am advised by the Revenue Commissioners that the rules on when a person is a "chargeable person" for the purposes of the self-assessment system, and is liable to make a return under that system rather than under the PAYE system, were amended in Finance Act 2005. These rules were further clarified in Tax Briefing No. 62 which is available on the Revenue website at the following link: http://www.revenue.ie/en/practitioner/tax-briefing/62/tb05.htm

In summary, an individual who is in receipt of income chargeable to tax under the PAYE system but who is also in receipt of income from non-PAYE sources will not be regarded as a "chargeable person" if:the total gross income from all non-PAYE sources is less than €50,000, the net assessable income (e.g. after allowable deductions) is less than €3,174, and the non-PAYE income is coded against PAYE tax credits.

An individual who is in receipt of income chargeable to tax under the PAYE system but whose gross income from non-PAYE sources is €50,000 or more will always be regarded as a "chargeable person" for the purposes of the self-assessment system. This rule applies even if the net amount of the non-PAYE income is less than €3,174 or even if it is Nil.

These rules apply regardless of the country in which the non-PAYE income arises.

Where a person is a "chargeable person" for the purposes of the self-assessment system then the person must make a self-assessment tax return.