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| Irish tax break scheme 'will attract top talent from Britain after Brexit' | Irish tax break scheme 'will attract top talent from Britain after Brexit' |
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| Investment agency defends decision to extend programme to 2020 after Social Democrats call for it to be scrapped | |
| Henry McDonald Ireland correspondent | |
| Mon 9 Oct 2017 05.00 BST | |
| Last modified on Mon 27 Nov 2017 15.45 GMT | |
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| As Ireland prepares for an expected tax cutting budget this week, the body credited with attracting multinationals has defended a controversial scheme for high earners, which critics have labelled a bribe for foreign bankers and investors. | As Ireland prepares for an expected tax cutting budget this week, the body credited with attracting multinationals has defended a controversial scheme for high earners, which critics have labelled a bribe for foreign bankers and investors. |
| Ahead of the budget on Tuesday, Ireland’s Social Democrats have called for the scrapping of the Special Assignee Relief Programme (Sarp), which cuts the tax of those earning between €75,000 and €500,000 a year. | Ahead of the budget on Tuesday, Ireland’s Social Democrats have called for the scrapping of the Special Assignee Relief Programme (Sarp), which cuts the tax of those earning between €75,000 and €500,000 a year. |
| Defenders of the Sarp scheme argue that its extension to 2020 will bring in even more talented bankers, executives and entrepreneurs, especially from Britain, who want to remain inside the EU after Brexit. | Defenders of the Sarp scheme argue that its extension to 2020 will bring in even more talented bankers, executives and entrepreneurs, especially from Britain, who want to remain inside the EU after Brexit. |
| The Industrial Development Authority, which has attracted multinationals to Ireland and helped create tens of thousands of jobs, said the Sarp scheme was part of a package of tax breaks that were needed to protect the Irish economy during the difficult Brexit period. | The Industrial Development Authority, which has attracted multinationals to Ireland and helped create tens of thousands of jobs, said the Sarp scheme was part of a package of tax breaks that were needed to protect the Irish economy during the difficult Brexit period. |
| Under the scheme, high earners can be exempt from paying 30% of their tax for earnings over €75,000. They can also apply to be exempted from tax on private school fees of up to €5,000. | Under the scheme, high earners can be exempt from paying 30% of their tax for earnings over €75,000. They can also apply to be exempted from tax on private school fees of up to €5,000. |
| The Social Democrats argue that foreign multinationals from Apple to Google, who use Ireland as their beachhead into the European market, already enjoy overly generous tax breaks, particularly Ireland’s comparably low 12.5% corporation tax. | The Social Democrats argue that foreign multinationals from Apple to Google, who use Ireland as their beachhead into the European market, already enjoy overly generous tax breaks, particularly Ireland’s comparably low 12.5% corporation tax. |
| Róisín Shortall, the joint leader of the Social Democrats and TD for Dublin Northwest, said Sarp was a “wheeze to allow very wealthy people to avoid paying tax”. | Róisín Shortall, the joint leader of the Social Democrats and TD for Dublin Northwest, said Sarp was a “wheeze to allow very wealthy people to avoid paying tax”. |
| According to a report by Ireland’s revenue commissioner, three years after Sarp was introduced in 2012 it was costing the Irish Exchequer €10m each year. | According to a report by Ireland’s revenue commissioner, three years after Sarp was introduced in 2012 it was costing the Irish Exchequer €10m each year. |
| “We estimate that with 600 high-earners now availing of the Sarp scheme the cost to the ordinary tax-payer is now around €15m,” said Shortall. | “We estimate that with 600 high-earners now availing of the Sarp scheme the cost to the ordinary tax-payer is now around €15m,” said Shortall. |
| “There is no no indication we are getting any benefit to the country out of this scheme. It is just another bribe for very well off individuals and an injustice inflicted on the ordinary taxpayer. | “There is no no indication we are getting any benefit to the country out of this scheme. It is just another bribe for very well off individuals and an injustice inflicted on the ordinary taxpayer. |
| “At present we have 3,000 children living in emergency accommodation in this state, these are official figures. Just think what that €15m which is lost to the state in terms of the Sarp wheeze could do to alleviate our housing crisis. Contrast the treatment of those 3,000 children to the tax breaks for private schools for those children of the high earning rich.” | “At present we have 3,000 children living in emergency accommodation in this state, these are official figures. Just think what that €15m which is lost to the state in terms of the Sarp wheeze could do to alleviate our housing crisis. Contrast the treatment of those 3,000 children to the tax breaks for private schools for those children of the high earning rich.” |
| The Social Democrats’ joint leader in the Dáil said international tax advisory companies were already “lining up and putting out advertisements” to highlight the low tax regime for high earners in Ireland. | The Social Democrats’ joint leader in the Dáil said international tax advisory companies were already “lining up and putting out advertisements” to highlight the low tax regime for high earners in Ireland. |
| Defending the scheme, Martin Shanahan, the IDA’s chief executive, said Ireland has to compete for talent across the globe and the Sarp scheme was one way to attract highly sought after people. | Defending the scheme, Martin Shanahan, the IDA’s chief executive, said Ireland has to compete for talent across the globe and the Sarp scheme was one way to attract highly sought after people. |
| “Ireland’s young workforce is capable, highly adaptable, educated and very committed to achievement. We have the youngest population in Europe with a third of the population under 25 years old,” he said. | “Ireland’s young workforce is capable, highly adaptable, educated and very committed to achievement. We have the youngest population in Europe with a third of the population under 25 years old,” he said. |
| “Being able to supplement our already dynamic workforce by attracting overseas talent is a key driver for attracting FDI and Sarp is just one of many tax incentives overseas companies can avail of to scale and grow their business in Ireland.” | “Being able to supplement our already dynamic workforce by attracting overseas talent is a key driver for attracting FDI and Sarp is just one of many tax incentives overseas companies can avail of to scale and grow their business in Ireland.” |
| Successive centrist and centre-right governments in Dublin have come under fire from EU partners over the way the state uses low taxation on corporations and their highest earners to woo foreign investors. | Successive centrist and centre-right governments in Dublin have come under fire from EU partners over the way the state uses low taxation on corporations and their highest earners to woo foreign investors. |
| Defenders of 12.5% corporation tax, however, say that it has been a vital fiscal tool in creating tens of thousands of jobs and attracting some of the largest global hi-tech companies to Ireland. | Defenders of 12.5% corporation tax, however, say that it has been a vital fiscal tool in creating tens of thousands of jobs and attracting some of the largest global hi-tech companies to Ireland. |
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