NON-RESIDENT CITIZENS:IRISH CITIZENS who are non-resident for tax purposes but who make frequent visits to Ireland will be affected by a new provision in the Finance Act.

Such people are only allowed to be in the State for up to 183 days in a single year if they are to retain their non-residency status for tax reasons.

Up to now a person is deemed to be in the State if he or she is present at midnight, but under changes in the Bill, a person's presence in the State at any time in a day would count for the determining of tax residency.

According to an explanatory document issued yesterday by the Department of Finance, the scheme as currently constructed "allows individuals to avoid becoming tax resident by ensuring that they leave the jurisdiction prior to midnight.

"They can return immediately after midnight and, although they are in the State for both days, they are not regarded as being in the State for tax purposes."

According to the Revenue, 5,142 people filed returns in 2006 in which they declared themselves to be non-resident for tax purposes.

However, it is not known how many of these make regular returns to Ireland or maintain homes here.

Some of Ireland's richest business figures, including Sir Anthony O'Reilly, Dermot Desmond, Denis O'Brien, Michael Smurfit and JP McManus, are regular visitors to Ireland but are understood to be non-resident for tax purposes.

Speaking to the press about the Finance Bill, Minister for Finance Brian Lenihan said it was difficult to assess how many people would be affected by the measure.

He said he wanted to put an end to the practice whereby people who left the State before midnight did not have their presence here counted for the purposes of the non-residency rules.

The Minister said tougher restrictions could not currently be put in place because Ireland had so many double taxation agreements with other countries, which would have to be reopened for negotiation.

The new income levies do not apply to non-resident citizens.