Number of tax exiles rises by 27% in two years

The number of people in Ireland who are non-resident for tax purposes increased by 27.15 per cent between 2009 and 2011, according to information released by Minister for Finance Michael Noonan.

People who spend less than 183 days in Ireland during the tax year (January 1st to December 31st) are considered non-resident for tax purposes.

This also applies to people who spend less than 280 days in Ireland over a period of two consecutive tax years.

Mr Noonan, who released the information in reply to a parliamentary question, said it was likely a high proportion of those opting to become non-resident for tax purposes were doing so for non-tax reasons. He suggested the higher number of Irish people emigrating and taking up employment abroad was one possible explanation for the rise.

Tax returns
In 2009 almost 10,300 people filed tax returns indicating that they were non-resident for tax purposes, according to figures provided by the Revenue Commissioners.

This increased to 11,594 in 2010 and 13,093 in 2011, the most recent year for which information is available.

The Department of Finance said the taxation of individuals in Ireland was "broadly in line with [that] prevailing in most other OECD jurisdictions". It said it was not possible to ascertain the reasons for the increase.

Asked whether measures were planned to reduce the number of persons non-resident for tax purposes, the department said taxation “rules are constantly kept under review”.

Tax breaks
Micheál Collins of the Nevin Economic Research Institute offered two possible reasons for the increase. Firstly, people eligible to apply for the Special Assignee Relief Programme – which offers specific tax breaks to certain employees of multinational corporations – was extended to include people from a European Economic Area nation working on shorter contracts.

Secondly, the 2010 Finance Act abolished the remittance basis of taxation for Irish citizens who are non-resident in Ireland for three consecutive years or more. Prior to this, people who were non-ordinarily resident and non-domiciled in Ireland only had to pay tax on foreign-sourced income if it was remitted into the State.

Alan Moore, a tax consultant and author of several books on the Irish taxation system, said people also chose to become non-resident for tax purposes to avoid capital gains tax.