Written answers

Tuesday, 11 May 2021

Photo of Pádraig Mac LochlainnPádraig Mac Lochlainn (Donegal, Sinn Fein)
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223. To ask the Minister for Finance when he will meet with a group (details supplied) to discuss its concerns regarding double taxation for workers in Border regions and the impact this will have on inward investment to some of the most economically disadvantaged parts of the island. [23623/21]

Photo of Paschal DonohoePaschal Donohoe (Dublin Central, Fine Gael)
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In the case of a person who lives in Ireland but who works in another jurisdiction, the general tax position is that, as an Irish resident, they would be subject to Irish tax on their worldwide income from any source, including the employment exercised outside of the State. At the same time, the employment may also be subject to tax in the country in which the work is carried out. In accordance with general principles of international tax, where instances of double taxation arise on the same income, relief against Irish tax may be claimed by way of a credit for any foreign tax already paid, subject to the terms of any applicable Double Taxation Agreement (DTA). Unilateral relief may also be available in certain circumstances under domestic Irish legislation.

In the case of a person who lives in the State but who works in Northern Ireland, the terms of the Ireland/UK DTA provide for relief by allowing the Irish resident to claim a credit for the UK tax paid against any Irish tax that may be due on the same income.

Section 825A of the Taxes Consolidation Act (TCA) 1997 provides additional Trans-Border relief and may apply, subject to certain conditions, where a person lives in Ireland but works wholly outside of the State.

I would advise the Deputy that this relief applies not only to persons with a UK based employment, but also for employments in the EU and DTA-network regions in compliance with Ireland’s treaty obligations. It therefore has broader application beyond the issues raised by the Deputy.

The conditions for this Trans-Border relief are set out in section 825A TCA 1997. In general, in order to qualify for this relief the individual must:

- be tax resident in Ireland;

- work in a country that Ireland has a Double Taxation Agreement with in an employment held for a continuous period of 13 weeks in the year;

- the employment duties must be wholly exercised outside of the State with none performed in the State, save for duties considered incidental to the foreign employment;

- have paid tax in the other country and are not due a refund of the tax; and

- be present in Ireland for at least one day for every week they work abroad.

Where the Trans-Border relief applies in the case of an Irish resident who works in the UK, it operates in such a way that only UK tax is charged on the employment income and there is no charge to Irish tax on the same income. Any additional Irish tax that may be due is foregone under the domestic Irish legislation.

This tax relief is not normally available for Irish residents who work from home in Ireland. However, in light of the COVID-19 pandemic, Revenue have confirmed that if employees are required to work from home in the State due to COVID-19, such days spent working at home in the State will not preclude an individual from being entitled to claim this relief, provided all other conditions of the relief are met. This position is outlined on Revenue's website -

The flexibility being shown in the context of the pandemic does not impact the general operation of the measure which requires that a person works outside the State and pays tax in the other jurisdiction in order to qualify for the relief.

I am aware that this issue has been raised specifically in relation to Irish residents who work in Northern Ireland and, as indicated at Report Stage of Finance Act 2020, officials have been asked to look at the operation of the measure in the context of the Tax Strategy Group (TSG) 2021 process. I am also aware that a request for a meeting has been received and this will be arranged with senior officials on my behalf in due course.

The TSG process will consider all relevant matters including the equity of treatment between Irish residents who pay tax in Ireland, the competitive position of Irish employers, and concerns regarding the potential for double non-taxation and established principles of international tax.

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