The dramatic growth of remote and hybrid working since the COVID-19 pandemic has significant potential to help create a more inclusive labour market, to widen access to talent for employers and to improve regional balance in the economy, including the Border region.
I am aware, however, that this expansion of remote and hybrid working has introduced a new context for cross border workers and for employers based in the State employing - or seeking to employ - workers residing outside the State, particularly in relation to taxation.
While the current position does not preclude an Irish employer from allowing an employee to work remotely, such an arrangement may result in implications for the employer and the employee from a tax perspective.
It is important to emphasise that the State cannot move unilaterally on this issue and that consideration must be given to International Tax Law, Double Taxation agreements and any changes are subject to international negotiation. Clearly, these are matters that rest primarily with the Minister for Finance.
I am actively engaged with colleagues across Government and other public bodies on a range of issues relating to cross-border working on the island of Ireland and I will continue to work to address any further issues emerging. In this context, I would highlight the following:
- My officials have maintained engagement with the Department of the Taoiseach and the Department of Finance to address tax matters and other related concerns raised to date. The issues that were identified in the All-Island Labour Market Study 2024 commissioned by the Labour Employer Economic Forum (LEEF) Shared Island Working Group remain a live concern and my officials will continue to engage with both Departments on this matter.
- Agencies under the aegis of my Department are engaged with their client companies, and with the relevant state bodies on matters relating to cross-border remote working.
- The Government is actively seeking to obtain better data on the nature and extent of cross-border working, including by commissioning ESRI research on the issue. Revenue continues at ways to minimise the administrative burden of cross-border working insofar as possible.
- On 4 April last, a Plenary meeting of Labour Employer Economic Forum discussed the potential to strengthen the all-island labour market for the benefit of employers and workers on the entire island. It was agreed that LEEF would put a sustained focus on this important agenda. The LEEF Shared Island working group is consulting with a number of Government Departments, including this Department and the Department of Finance on cross border worker mobility matters.
- The Department is also co-funding to the Working in Ireland Survey, undertaken by University College Dublin. This is the second iteration of the Survey, first undertaken in 2021, and aims to interview persons across the island of Ireland about their experiences of working life - including remote working. I understand that the fieldwork has been completed and that we can expect research output in the coming months which will yield important insights to help inform future policy.
The policy implications of the expansion of remote working for cross-border workers, for both employers and employees, particularly in relation to taxation, are also being considered at an EU and international level. The Government is participating in this process and will monitor and assess any developments very closely.
