THE PROPOSED Irish domicile levy aimed at wealthy non-resident Irish individuals is not expected to generate substantial sums for the exchequer.
The new €200,000 levy was announced in the Budget by Minister for Finance Brian Lenihan. It is aimed at Irish nationals and domiciled individuals who are not tax resident in the State.
The levy follows a broadly comparable scheme introduced in Britain by chancellor of the exchequer Alistair Darling in March 2008.
That proposal imposed a fixed annual charge of £30,000 (€33,136) on long-term residents in Britain claiming non-resident status.
Last April, chairwoman of the Revenue Commissioners Josephine Feehily told the Public Account Committee that 5,803 Irish people have declared themselves to be non-resident for tax purposes on their tax forms.
She said that, of this total, some 440 were considered to be very wealthy individuals whose activities are closely monitored by Revenue to make sure they adhere to the residency regulations.
The rules allow them spend 183 days a year in the state or 280 days in any two year period.
The new levy, announced in the budget, would impose a charge of €200,000 on Irish individuals and domiciled individuals whose worldwide income exceeds €1 million and whose Irish-located capital is greater than €5 million.
If all the 440 wealthiest on the Revenue list were obliged to pay under the new rules, the income generated would amount to €88 million per annum.
In reality, it is conceded, the total take from the tax will be much less than that.
Mr Lenihan has promised the full details will be set out in the Finance Bill to be published in early 2010.
It is not known if those who are liable for the tax will be required to register or if they will be asked to self-declare on tax documents.
Last year, the Government introduced legislative changes to end the so-called “Cinderella rule” whereby non-resident tax exiles could spend a day in the State provided they left by midnight.
Labour finance spokeswoman Joan Burton conducted a long-running campaign against this rule which she described as a “blatant abuse”.