Review of tax relief aimed to attract foreign company executives
Special assignee relief scheme designed to allow Irish businesses lure in skilled staff
Michael Noonan: only eight employees availed of his scheme in 2012, creating just five new jobs at a cost of €63,600 to the taxpayer.
A controversial scheme that allows foreign executives working here pay less income tax is to be reviewed following its poor success rate.
The special assignee relief programme, introduced by Minister for Finance Michael Noonan in 2012, is designed to allow Irish businesses lure in skilled staff from abroad in the hope they can bring in additional investment.
The most recent figures, however, show only eight employees availed of the scheme in 2012, creating just five new jobs at a cost of €63,600 to taxpayer.
Documents released under the Freedom of Information Act show accountancy firms KPMG and Deloitte lobbied the Department of Finance to have the measure – which applies to 30 per cent of all income between €75,000 and €500,000 – adopted. Yesterday, Mr Noonan initiated a six-week public consultation process to review the operation and uptake of several tax incentive schemes, including the special assignee relief programme. The process will feed into a review of the Government’s tax code for business, which will be published by the Minister in advance of the budget later this year.
Two other measures also under the spotlight are the employment and investment incentive – the successor to the Business Expansion Scheme – and the seed capital scheme, both of which provide tax breaks to individuals investing in small or start-up businesses.
The schemes, which allow for tax write-offs of up to 41 per cent on investment, form a key plank of the Government’s strategy to boost investment in the country’s SME sector.
Figures from the Revenue Commissioners indicated that in 2013, 1,021 investors made investments amounting to €41.5 million.
Critics of the schemes, however, have long maintained they merely allow wealthy individuals shelter their income from taxation without providing any real benefits to the economy.