Should I seek a 2nd opinion? International tax

H

hmmm

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I have an (Irish) brother who lives in Thailand and carries out his work entirely over the Internet. He has been living there for over 2 years now. He remits no money back to Ireland. His accountant in Ireland is telling him that he is "ordinarily resident" and must pay Irish tax on his income. From my reading of the tax code this is wrong * - the accountant is a relatively small practice so I'm not sure whether he would have much experience in this area.

Do you think it would be worth our while to get a 2nd opinion on this?


* Because the revenue guide says someone who is non-resident, but ordinarily resident & domiciled in Ireland does not pay tax on "income from a ..profession..all the duties of which are exercised outside Ireland"
 
I would just state the position in writing and ask the accountant to explain why he thinks he is taxable. The accountant seems wrong to me, but this is a very tricky area.

brendan
 
Hmmm,

Brendan is right, this is a tricky area.
However, your brother's situation is fairly straightforward.
In a case where an individual is "ordinarily resident" Ireland's tax territoriality in income tax matters extends only to Irish income and investment income where the investment income exceeds €3,810. Assuming your brother does not have investment income - including rental income over this amount - he has no notional liability to Irish tax. His accountant is wrong to believe his income is taxable across the board.
Incidentally he will cease to be ordinarily resident after three years as a non-resident.

Banton.
 
a friend of mine works on a ship and doesnt pay any tax if he is out of the country for more than 6 months!
 
I take it your brother is self employed? The reference you are quoting relates to a person who's entire duties are outside the state and subject to tax in the country were the individual is resident.

Your brother is currently ordinarily resident in Ireland and therefore should in theory return his income to Revenue. I'm not entirely sure what the double taxation treaty with Thailand.

You should seek advice from a professional tax consultant.
 
to HMMM, Ouery re brother in Thialand, not stated what periods spent in Ireland but presuming just for holidays, Your brother is not liable to Irish Tax on earnings in Thialand. He would be liable to Irsh tax on income arising in Ireland, e.g. rents from let property. Residence, ordinary residence and domicile have a big bearing on taxation and is a complex area. As a general rule, if you are deemed resident in Ireland, You are liable to Irish Tax on your worldwide income, subject to double taxation relief with countries with which Ireland has a Double Taxation Agreement. The basic tests for deciding tax residence are Rule 1. 183 days spent here in the year or Rule 2 280 days between the current year and the preceding year. Therefore if you spend 180 here in 2006, you are non- resident for 2006, but for 2007 you are resident if you spend 101 or more days here ( under rule 2) The impression is often given to queries re taxation that non -residence applies if less than 183 days are spent in the country in any year
and no reference is made to Rule 2
 
Hi thanks for the replies, yes he is self employed. I don't believe he declares any income in Thailand, he is on a tourist visa (I appreciate that means he shouldn't be working, but he is). He would have been in Ireland for less than 30 days in any year. I think we'll go get that second opinion.
 
There is no need to waste money seeking a second opinion on this matter. If your brother was not resident in Ireland and had no income arising here, he would have no liability to Irish tax on earnings in Thailand. Look up Revenue Publication, " Going to work abroad" If he was more than one complete income tax year out of Ireland, he ceases to be resident on leaving , and is non resident until he returns to live here again. Tax Practitioner.
 
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