Brendan Griffin (Kerry South, Fine Gael)
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To ask the Minister for Finance following the recent public consultation process, if he will reform tax residence rules with a view to boosting State revenue; his views on whether the current regime is too lenient in favour of tax exiles; and if he will make a statement on the matter. [42244/12]

Michael Noonan (Limerick City, Fine Gael)
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The Programme for Government indicated that, as part of its fiscal policy, the Government will ensure that “tax exiles” make a fair contribution to the Exchequer. In Budget 2012 I abolished the “citizenship condition” for payment of the Domicile Levy to ensure that individuals could not avoid the levy by renouncing their citizenship. I also stated that I intend to keep the contentious issue of the tax treatment of “tax exiles” (which is linked to the tax residence rules) under constant review.

The Programme for Government update in March 2012 confirmed the commitment to undertake a consultation process on residence issues in 2012 to inform preparation for possible further changes in 2013. I launched the process in May this year, wherein I invited interested parties to make submissions on possible revisions to the current residence rules for the taxation of individuals.

This consultation process has now concluded. A total of eight submissions have been received and these will be published in due course, as indicated when the consultation was announced. My officials are considering the submissions and will be advising me on possible further changes as part of the preparations for Budget 2013.

As to whether our current regime is too lenient, while the application of the rules in particular circumstances is being considered, the taxation of individuals in the State is broadly in line with the system prevailing in most other OECD jurisdictions, that is to say —

(a) individuals who are resident in the State for tax purposes are taxable here on their worldwide income; and

(b) individuals who are not resident for tax purposes pay tax here only on income arising in the State and on income derived from working here.