Thursday, 29 April 1999
Dáil Éireann Debate
Minister for Finance (Mr. McCreevy): I have no plans to change the income tax reliefs for seafarers which were introduced in 1998 and extended in the 1999 Finance Act. These reliefs are as follows. The 1998 Finance Act provided for a new seafarers tax allowance of £5,000 per annum. This allowance is available in respect of seafaring earnings, and is conditional on a seafarer being at sea on a voyage to or from a foreign port for at least 169 days in a tax year on a passenger or cargo ship which is registered in an EU member state's shipping register. The 1998 Finance Act also allowed voyages to offshore servicing installations outside Irish waters to be allowable for the purposes of this seafarers tax allowance. This allowance has now been extended in the 1999 Finance Act to the crews of vessels servicing such rigs within Irish waters.
Certain long-haul seafarers, who do not meet the requirements outlined above, may qualify under the foreign earnings deduction scheme (FED) which applies generally to any persons working abroad for a substantial part of the year. To qualify for this deduction an employee must spend at least 90 qualifying days abroad in a tax year or 12 month period, and each period of absence must be for a minimum of 14 days at a time. A long-haul seafarer can claim either the seafarer allowance or the FED, but not both.
The FED does not apply to the UK due, inter alia, to its proximity and the fact that extension  to the UK would bring Northern Ireland within its scope, leading to possible abuse which would be difficult to control. However, I did make an exception last year to cater for the special circumstances faced by seafarers on long-haul voyages who happen to make an incidental stop en route at a UK port. This concession is, therefore, consistent with the overall aim of the deduction as already outlined.
The Irish shipping sector is in a position to avail of an attractive mix of incentives. These incentives cover both employers and employees and include not only the 1998 and 1999 Finance Acts measures outlined above but also the employers' PRSI exemption that currently applies to the Irish maritime transport sector. These provisions are also consistent with the European Commission's guidelines on State aids to the maritime transport sector and I believe that the measures will help improve the competitive position of the Irish shipping sector in the years ahead.
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