Expenses incurred by non-residents travelling to Ireland for board meetings in their capacity as non-executive directors will in future be exempt from income tax and USC, under a measure in the Finance Bill.

This follows significant lobbying on the issue, with firms arguing that reimbursing the cost of directors travelling to meetings should not incur a tax liability.

“Prior to today’s legislation, there was a lack of clarity over the tax treatment of, for example, flight costs incurred by a director in travelling to a board meeting in Ireland from the UK,” said Peter Vale, tax partner at Grant Thornton.

‘Economic sense’

“The changes mean that the mere reimbursement of such costs should not be taxable, which makes economic sense.”

Daryl Hanberry, Deloitte tax partner, said it was a “positive change for FDI investment”. However, he pointed out that it creates an anomaly “that Irish non-executive directors will potentially be treated differently to non-resident directors”.

“An Irish director travelling from Galway to Dublin is taxable on expenses whereas a non-resident travelling from San Francisco to the same meeting wold not be taxable on expenses,” he said. “ It will be interesting to see if this is reviewed as the Finance Bill progresses.”