Gerald Nash (Louth, Labour)
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Question 11: To ask the Minister for Finance if he intends to undertake a review process and consultation exercise with regard to residency laws and taxation, in view of the poor tax take from the domicile levy; when such a process will conclude; the amount the State expects to raise from the levy in 2012; and if he will make a statement on the matter. [14804/12]

Michael Noonan (Limerick City, Fine Gael)
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As I stated in my recent Budget speech, I intend to keep the contentious issue of so-called "tax exiles" under constant review, and to that end a public consultation will be undertaken on possible changes to our tax residence rules to ensure such individuals make a fair contribution. Measures which will be considered will include possible changes to the day counting rules for residence, supplementing the day counting rules with other criteria, and examination of other related measures, including the Domicile Levy. There was much comment on Committee Stage of the Finance Bill about the small number of individuals who paid the Domicile Levy and the low yield from the tax. It should be noted that if an individual pays more than €200,000 in income tax in a particular year he or she will not be required to pay the levy, even if he or she meets the other conditions. So it is not necessarily the case that certain individuals whom one might expect to pay the levy are not otherwise making a significant tax contribution. An individual can also use any income tax paid in the tax year as a credit against his/her Domicile Levy liability.

The Domicile Levy is payable by an individual who is both an Irish citizen and Irish domiciled whose Irish assets exceed €5 million, whose worldwide income exceeds €1 million and whose liability to Irish income tax for the relevant year is less than €200,000. One reason the levy yield was relatively small is that the combination of the various conditions meant that very few people were obliged to pay it. My announcement in the Budget that the citizenship condition will be removed should have the effect of increasing the number of people who are eligible to pay the levy.

The small number of taxpayers means the levy yield is particularly vulnerable to volatility in the economy which would lead to changes in an individual's income and asset values. I therefore do not propose to project the yield from the levy in 2012. However, the removal of the citizenship condition will only apply from the 2012 tax year onwards. Since the levy for a particular year is payable on or before 31 October of the following year, the removal of the citizenship condition will only affect the Domicile Levy yield from 2013 onwards.