Willie O'Dea (Limerick City, Fianna Fail)
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To ask the Minister for Defence item 6.10 vote number 36 Defence 2011 refers to payment totalling €1,461,965 which was made to the Offices of the Revenue Commissioners in 2011 in settlement of the liability which arose in respect of the taxation of the Reserve Defence Forces Cadre daily allowance for the period January 2007 to February 2011; If he will explain the way a personal tax liability for each of those in receipt of this allowance was paid to the Revenue Commissioners from the Exchequer; if he will confirm the number of personnel involved, their rank and advise if they were in receipt of other taxable or un-taxable allowances for this period; and if he will make a statement on the matter. [48217/12]

Alan Shatter (Dublin South, Fine Gael)
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The Reserve Defence Force Cadre daily allowance was introduced many years ago to compensate members of the Permanent Defence Force who were attached to the Reserve Defence Force for expenses incurred in training reservists and ancillary administrative duties. Historically, due to the nature of the allowance, it was not regarded as being subject to tax or income levy. During the course of a routine Revenue audit, when the Deputy was Minister for Defence, the taxation status of the allowance was raised as a possible issue. Following technical assessment, the Revenue Commissioners determined that the allowance, as then paid, constituted a ‘round sum’ and was liable to taxation. The Revenue Commissioners determined the liability on the Department as employer for the years in question based on this ‘round sum’ determination and payment was made in settlement. The allowance was re-configured as a taxable allowance from 1st March 2011 and since that date any personal tax liability is met by the individual members of the PDF who are in receipt of the allowance.

The number and rank of personnel in receipt of the allowance during the years in question and the duration for which the allowance was held varied according to postings into and out of Reserve Units. The numbers and ranks for the years in question are shown in the table.

Number and rank of PDF Cadre attached to the RDF (includes Naval Service equivalents) in receipt of RDF allowance

Some of the personnel would also have been in receipt of other taxable and un-taxable allowances during the period in question, depending on the nature of their duties and other factors. The Department has tax compliance procedures in place and as part of those procedures it is reviewing all non-taxable allowances in order to ensure that payments made to employees are fully tax compliant.