Declan Breathnach (Louth, Fianna Fail)
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491. To ask the Minister for Jobs, Enterprise and Innovation if her attention has been drawn to the unfair situation whereby self employed persons are unable to avail of trans-border workers relief; her proposals to address this unequal situation; if she has discussed this matter with the Minister for Finance; and if she will make a statement on the matter. [33314/16]

Mary Mitchell O'Connor (Dún Laoghaire, Fine Gael)
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I am informed by Revenue that Section 825A of the Taxes Consolidation Act 1997 (TCA) (as inserted by section 13 Finance Act 1998), which provides relief for trans-border workers, is confined only to employees holding certain employments outside the State. The scheme was originally introduced in response to concerns raised by cross border workers concerning the tax position of employees resident in the State and employed in Northern Ireland.

The purpose of section 825A TCA is to give relief to those workers who commute to a place of work outside the State and who exercise the duties of their employment wholly outside the State. The relief therefore is not easily aligned in a self-employed context as many elements of a self-employed business of an Irish resident would most likely be carried on from within the State. This could include for example, planning and organisation of activities and jobs, as well as various other ancillary and administrative functions. Therefore, unlike a foreign employment which is a clear, discrete activity carried on in wholly in another jurisdiction, self-employment assignments are much less defined and could present control issues. It should be noted of course that the employees of a self-employed contractor would be eligible for the relief.

In addition, an extension of the relief to the self-employed would likely provide an incentive for businesses to relocate north of the border in circumstances where the Irish income tax rates compared unfavourably with the prevailing UK rates.

Finally, self-employed individuals have the option to incorporate and benefit from lower corporate tax rates whereas employees have no such option. One of the reasons for introducing the relief for cross-border employees was to shield their exposure to the higher rates of Irish income tax. There are no such exposures for a self-employed individual who incorporates his/her sole trade.

The Minister for Finance is aware of this position.