The extent to which an individual's income is liable to Irish Income Tax depends on three functions:-
a) his/her residence
b) his/her ordinary residence
c) his/her domicile
RESIDENCE
An individual's residence is determined for each tax year separately. An individual will be resident in Ireland if he/she is either:-
a) is present in Ireland for a total of 183 days or more during that tax year, or
b) is present in Ireland for a total of 280 days or more in the current and previous tax years, provided that where an individual is present in the State for only 30 days or less in a tax year (i) he/she will not be Irish resident in that year, and (ii) no account will be taken of that period in calculating the aggregate of 280 days over two tax years.
An individual is present in Ireland for a day if he/she is in Ireland at the end of the day i.e. if he/she is in Ireland at midnight.
An individual may elect to be Irish resident for a tax year if:-
a) he/she is not resident in Ireland in the tax year, and
b) he satisfies the Revenue that he/she is in Ireland with the intention of and in such circumstances that he/she will be resident in Ireland for the next tax year.
An individual might want to be Irish tax resident for the following reasons:-
i) To qualify for full tax credits
ii) To avail of Ireland's network of double taxation agreements
iii) So that the individual and his/her spouse can qualify for joint assessment. The Irish Revenue view is that both must be Irish resident to qualify.
ORDINARY RESIDENCE
An individual's ordinary residence is determined for each tax year separately. An individual is ordinary resident in Ireland for a tax year if he/she has been resident in Ireland for each of the last three years. An individual does not stop being ordinarily resident in Ireland unless he/she has been non resident for the preceding three tax years.
DOMICILE
Domicile is a legal term. A person is domiciled in the country of which he/she is a national and in which he/she spends their life. However a person may have two homes but can only have one domicile. An individual is born with a domicile known as his/her domicle of origin. A child at birth dons the domicile of his/her father and if his/her parents are not married he/she dons the domicile of his mother. An individual's domicile of origin can be rejected and a new domicile acquired. In order to abandon the domicile of origin the individual must prove conclusively that he/she has severed all links with the country in which his domicile of origin lies. A domicile of origin cannot be lost by a mere abandonment. It can only be lost by the acquisition of a domicile of choice.