A bilateral deal with the UK on the taxation of cross-Border workers is being sought by Minister for Finance Simon Harris.
The talks, which will be detailed by Harris on the fringes of the UK-Ireland summit in Cork on Friday, could benefit hybrid workers living in Northern Ireland but working remotely for companies based in the Republic.
The Republic provides tax relief for individuals who live in the State but work abroad. However, there is no equivalent relief available under the UK tax system.
The Government believes this has caused challenges for such individuals who are part of a cross-Border workforce estimated to be up to 20,000 people.
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Hybrid working across borders can cause headaches such as potential tax liabilities for workers and employers, and have implications for exchequer revenues.
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It also raises complex issues around double taxation, and is being examined at international level through discussions at the Organisation for Economic Co-operation and Development (OECD).
In Cork on Friday, Harris is expected to announce that officials in the Department of Finance have engaged with their counterparts in the UK treasury and Revenue and Customs to explore whether an interim approach can be agreed on a bilateral basis.
The Labour Employer Economic Forum (LEEF) – the Government’s employers and workers policy exchange – is looking at the issue as part of the Shared Island programme of cross-Border issues.
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While discussions have progressed at OECD level, there is no timeline for thrashing out the complex issues involved, which also extend to competitiveness and equity issues for all taxpayers resident in a particular jurisdiction.
It is expected that officials will aim to reach a decision in principle with the UK following discussions that will continue across this year.
