Revenue Tax Briefing

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Revenue Tax Briefing Issue 56, July 2004

“Not Resident Elsewhere” S. 195 and S.234 TCA 1997

Meaning of “Not Resident Elsewhere” for the purposes of Sections 195 and 234 Taxes Consolidation Act, 1997.


To qualify for artist exemption relief, Section 195 TCA, 1997 an individual must, inter alia, be “resident in the State and not resident elsewhere” or “ordinarily resident and domiciled in the State and not resident elsewhere”. Similarly, the exemption of income derived from certain patent royalties Section 234 TCA, 1997 is also conditional on a person being a resident of the State which is specifically defined as “any person resident in the State for the purposes of income tax and not resident elsewhere”. The purpose of this note is to clarify what is meant by “not resident elsewhere”.

Residence in the State

Irish rules of residence are set out in Section 819 TCA, 1997. The section provides that an individual is resident in the State if he/she spends 183 days or more in the State in a tax year. Alternatively, residence is established if an individual spends 280 days or more in the State over two years. There is also provision for an individual to elect to be resident, for example, in the year of arrival in the State if he/she has the clear intention of being resident in the State the following year. However, the focus of Section 819 is on residence in the State and it provides no assistance as to whether or not an individual is also resident elsewhere.

Residence Elsewhere

Whether an individual is resident elsewhere or not is a question of fact based solely on the tax laws of other relevant jurisdictions. Because of the diversity of countries’ residence rules and the fact that residence in the State does not preclude residence elsewhere in the same year, cases of double residence arise from time to time. Such cases may arise for a variety of reasons. An individual, for instance, electing to be resident in the State in the year of arrival from another country is quite likely to be resident also in the other country because of the number of days spent there etc. in the particular tax year. Where a move to the State involves living here on a full-time basis double residence is likely to arise only in the year of arrival. However, where an individual continues to spend time in another country, double residence may arise on an ongoing basis.

Treatment of Double Residence Cases

As indicated already, the legal provisions governing artists exemption, Section 195, and the exemption of certain income from patent royalties Section 234, require an individual to be resident in the State and not resident elsewhere. To deal with cases of double residence, Revenue has decided to look beyond the particular provisions in question and further consider such cases against the background of any relevant double taxation treaty provisions where a double taxation treaty is in place. Thus, in the circumstances of a particular case, if the double taxation tie breaking rules between the contracting states determine residence in Ireland, Revenue is prepared to accept that the individual or person is resident in the State and not resident elsewhere for the purposes of Section 195 or Section 234. If, on the other hand, the tie breaking rules determine residence to be in the other state, then residence elsewhere will have been established and no exemption will apply.