Foreign income by non national

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Zabo11

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Hello,

I found this forum while searching Google and would like to post a few questions since I could not find a answer and I tried to read documents from the revenue sites but frankly they are too technical for me.

So my situation

1)Non Irish national (Hungary)

2)Non Domiciled born and raised in Hungary where I have an owned apartment and plan to move back there at some stage in the medium term future, (3/4 years from now probably)

3)Long time tax resident in Ireland > 183 days a year in Ireland for the last 11 years

4)My only income in Ireland is PAYE. No other income or investments in Ireland

5)I transferred some sums of my PAYE money savings back to Hungary over the years in the same account where I already had some money before leaving Hungary and reinvested
the overall capital in shares where I had some excellent gains in the last few years. I did the tax return every year there and paid the capital gain there (a flat 16% tax on the gains vs. 33% in Ireland)

6)I never remitted anything back into Ireland so I guess no tax is due on the gains, as I’m not domiciled and don’t see myself staying in Ireland forever

7)I wonder though even if I have no tax liabilities in Ireland on my Hungarian investments since I have not remitted anything. Despite that should I have also done the tax return in Ireland declaring the gains made in Hungary?

In summary I’m I supposed to declare my non-remitted foreign gains in Ireland and do a tax return in Ireland even if I am non domiciled, non national ?

I have never done it, so I wonder if I should have done it in the past and what are the consequences of failing to do a tax return when no tax is due ?

I also read the double taxation treaty between Ireland and Hungary but there is no mention of domicile etc. and some terms I find hard to grasp anyway

Thanks
Zabo
 
Hi,

There are people on this site who seem more qualified to and your query.

However from my own experience with a foreign national spouse, you are indeed liable for income tax/CGT on all worldwide income regardless of whether the income is remitted is brought back or not , if you are resident in the Rep of Ireland for tax purposes ( which at 1st glance appears to be your case).

If as is likely there is a double tax agreement between the Rep of Ireland and Hungary you can claim a tax credit on taxes paid in Hungary, is the 16% vs 33% here. You will need to declare share dividends/ rental income as income.

There has been a clampdown in this area.
See info by Revenue on foreign assets/income thanks to increased sharing of information, esp across the tax / banking data across EU. This yielded c.280 million Euro in over 2800 cases before last years 1st May deadline for so called " voluntary disclosure " of foreign assets/ income.

My experience of this is to make a disclosure as soon as you can, especially if you have done inter bank transfers in this matter, before Revenue cross check eventually.

It hurts, to comply, but at least you are clean to claim each and every tax relief benefit/ pension income which may be important in future years when or if you return to Hungary.

Fidel.
 
Hi Fidel

Thanks for your prompt reply however I have done enough research at this stage and I’m sure that being a non-domiciled I will have no tax liability on the foreign income (standard shares) in Ireland. This is very clear from a lot of documentation that I read (Revenue, accounting firms websites etc.: the Irish tax system operates a worldwide taxation only for domiciled people. I posted the question to see if someone knows whether or not non-dom people have an obligation to do a tax return on foreign income not remitted into Ireland.


Also I came across the “voluntary disclosure" that you mention and in Alan Moore website (I cannot post the link) but seems to be a highly regarded accounting firm, there is an example of a foreign French citizen domiciled in France but tax resident in Ireland and there is a clear note that says that non-domiciled were not supposed to do the voluntary disclosure as foreign income is not taxed in Ireland except for particular circumstances like inheritance , special investment funds etc. Probably the 280 million recouped were from Irish domiciled people or non-domiciled who remitted the gains back to Ireland without paying the tax

Zabo
 
If non domiciled yes I agree with you, can I ask what circumstance makes you non domiciled when you mentioned in point 3 you are long term tax resident here for 11yrs or so.
 
Fidel,

For me it's very simple

1) Born outside of Ireland from non-Irish parents
2) Non Irish national. Moved to Ireland for the first time in my late 20s
3) Retain property (bought before moving to Ireland) and bank account in my country where I want to return in the future

These elements make me a non-domiciled
 
And you're correct. Domicile of origin is not easily shed, and having always retained and indeed increased financial & property interests in your home country will definitely be persuasive in that regard.
 
Pretty clearcut scenario here.

Irish resident non-Irish domiciled individual (Hungarian in this case) with Hungarian source income.

Provided it’s not remitted (i.e. brought) into Ireland, no Irish tax arises.

It is very hard to displace one’s domicile of origin.
 
Hello,

As you are resident, ord. resident and non domiciled you are taxable on remittance basis.. so you will be taxed on gains and income remitted. I agree with Gordon’s analysis above..

I’m my view those gains and the income not remitted do not need to be reported. You might have a look at page 13 of the attached link .. it’s just guidance on completing form 11 ( the income tax return) and it deals specifically with income remitted showing how it should be reported.. by inference as it makes no mention of non remitted income I think it doesn’t have to be reported..

https://www.revenue.ie/en/self-assessment-and-self-employment/documents/guide-pay-file.pdf
 
As far as I know and defer to experts on this field if you are tax resident in Rep of Ireland you are liable for Irish taxes on all worldwide income regardless of income being remitted or not.
 
Zabo11 said:
Fidel,

For me it's very simple

1) Born outside of Ireland from non-Irish parents
2) Non Irish national. Moved to Ireland for the first time in my late 20s
3) Retain property (bought before moving to Ireland) and bank account in my country where I want to return in the future

These elements make me a non-domiciled
Click to expand...
Domicile is a very complicated legal status. You have kept your domicile of origin based on what you’ve posted. I had a meeting with one of the big four - Deloitte- about 10 years ago to prove once again that both myself and my husband still have our Irish domicile to the tax authorities here, as they were doing an audit on the status of people in my husbands company. Many failed to keep their status by not understanding how important it is to keep assets etc in country of origin.
 
hello

fidelcastro said:
As far as I know and defer to experts on this field if you are tax resident in Rep of Ireland you are liable for Irish taxes on all worldwide income regardless of income being remitted or notn
Click to expand...

This is not correct. You have to be also domiciled to be taxable on worldwide income. The remittances basis applies.
 
Thanks for replys guys as mentioned I defer to experts e.g. Gordon et al.:D

Out of interest, and as mentioned by Bronte the area is complicated.
I wonder what simple cases would lead to an individuals domicile status be changed from say this case Hungarian to Irish?

Thanks.
Fidel
 
Marriage to an Irish person
Kids in Ireland
No assets in Hungary
No intention to leave Ireland
Plans to be buried in Ireland

Etc
 
Bronte said:
Marriage to an Irish person
Kids in Ireland
No assets in Hungary
No intention to leave Ireland
Plans to be buried in Ireland

Etc
Click to expand...
Back in the day, the tax textbooks used suggest that buying a grave plot in Ireland for one's own eventual burial would be a clincher.
 
Thanks a lot for all the replies on this folks. They were indeed very useful points. It's good news that I don't have to declare the foreign gains if not remitted. It saves a big hassle.
Zabo
 
@fidelcastro Merely marrying an Irish person does not automatically make you Irish-domciled (if you are a foreigner and not Irish-domiciled before marriage). There is more to it and you should check off multiple items on the above list to become Irish-domiciled, not just one.
 
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