Irish tax laws on remote working threaten NI FDI

A Cross Border group has warned that Irish tax laws on remote work could impact the attractiveness of Northern Ireland as a location for Foreign Direct Investment (FDI), calling for urgent change.

The Cross Border Workers Coalition has said that business across the island of Ireland who rely on a cross-border workforce could be restricted from offering staff remote work opportunities and unable to attract the best talent for their companies in the coming years. This comes as the Irish Government’s Shared Island Unit has published its first papers examining the attractiveness of the island to high value foreign direct investment.

Personal tax rules in the Republic can inflict a ‘double tax’ on cross border workers, who live in the Republic of Ireland but work in Northern Ireland, if they perform any work-from-home. While Irish Finance Minister Paschal Donohoe TD has temporarily waived these rules until the end of 2021, the Coalition have said that without a permanent solution, international companies will stop investing in border regions as they will be unable to offer modern, ‘blended’ working arrangements for many employees.

Irish tax laws

The Coalition is an alliance of individual employees who live in the border regions of the Republic of Ireland but work in Northern Ireland. The highly skilled talent pool of workers and professionals available in border areas has seen the growth of sectors including FinTech and cybersecurity, with the Coalition urging that the border must not act as a barrier to companies’ future hiring abilities.

Through initiatives such as the Taoiseach’s Shared Island Unit, the Dublin-Belfast Economic Corridor (DBEC), and the SDLP’s New Ireland Commission, discussions on the future of the all-island economy are growing. Now is the time, says the Coalition, for the Irish Government to change legislation to strengthen border economies, protect businesses North and South and uphold the rights of workers.

Conor Dowds, Co-Chair of the Cross Border Workers Coalition, has said: “If the Irish Government continues its inaction on these damaging Irish tax laws, Northern companies will pay the price. Remote work is here to stay, and current, outdated legislation threatens to impose an unfair tax penalty on thousands of cross-border workers seeking to work-from-home.”

“The recently published Shared Island Unit papers on enhancing the attractiveness of the island to high value foreign direct investment fail to recognise that this ambition could be stifled by restrictive Irish tax laws. If no action is taken, businesses North and South who are reliant on a cross-border workforce may be unable to offer remote work to their employees and forced to restrict their talent pool to one side of the border.”

“While Finance Minister Paschal Donohoe TD’s temporary waiver on these Irish tax laws was welcome initially, his failure to introduce permanent reform will inspire no confidence among uncertain Northern businesses. If continued, the Minister’s sticking-plaster approach will deter foreign investment into our border towns and cities, with companies seeking assurances they can offer modern working practises to all employees.

“Cross-border businesses are the backbone of our towns and cities, and Ministers North and South must listen to the concerns of their employees who could effectively be denied the opportunity of home-working. From the Shared Island Unit to the Dublin-Belfast Economic Corridor, we consistently hear about the need to strengthen the all-island economy and promote border regions without any action on these restrictive Irish Government laws. This must change.”

“If the Finance Minister is serious about protecting the all-island economy, he must introduce urgent reform before businesses across the North suffer from these unfair tax rules. Now is the time for action,” Conor Dowds, Co-Chair of the Cross Border Workers Coalition concluded.

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