Revenue Tax Briefing Issue 43, April 2001
The 1998 Finance Act introduced this allowance for those seafarers engaged in voyages to and from a foreign port in an EU flagged ship. The allowance applies to employees on board EU registered passenger ferries and freight carrying vessels, as well as to crews of vessels servicing drilling rigs in foreign waters. The 1999 Finance Act extended the allowance to the crews of vessels servicing drilling rigs in Irish waters.
For tax years to 2000/01 inclusive, a seafarer must spend at least 169 days at sea in a tax year in order to qualify for the allowance. Section 30 Finance Act 2001 now provides that for the short tax “year” covering the period from 6 April 2001 to 31 December 2001 the figure of 169 days will be reduced to 125 days [i.e. 169 × 74%] - see following paragraph where the 125 days is reduced to 119 days subject to Ministerial Order.
However, section 30 also makes provision for a general reduction in the number of days required to be at sea in order to qualify for the allowance. For the short tax “year” 2001 qualification for the allowance will require not less than 119 days to be spent at sea, while for the tax year 2002 and subsequent tax years the number of days required to be at sea will be reduced from 169 days to 161 days. This aspect of section 30 will be activated by way of Ministerial Order following EU Commission approval for the reduction has been obtained.
Section 30 also adjusts the amount of the allowance to take account of the short tax “year” 2001. For that short tax “year” only, the amount of the allowance will be reduced to ₤3,700.
Finally, section 30 converts the allowance of ₤5,000 to 6,350 euro with effect from 1 January 2002.