Government to extend overseas executives tax relief measures until 2020

The Government has confirmed its plan to extend the Special Assignee Relief Programme (Sarp) for overseas executives until 2020. This programme was due to expire at the end of 2017 but its extension has been included in the finance Bill, which gives effect to measures in the budget.

In a speech to the Seanad on Thursday, Minister for Finance Michael Noonan said it was extended to “remove any uncertainty for the foreign direct investment sector in the context of Brexit”.

Some 302 executives availed of Sarp in 2014, at a cost to the exchequer of €5.9 million in revenue foregone. This represented a significant ramping up of the numbers availing of the relief, which was introduced in 2012, when 11 received the tax break at a cost of about €100,000 in lost revenue. In 2013, some 121 executives availed of the scheme at a cost of €1.9 million to the State. Figures for 2015 are not yet available.

Mr Noonan announced in the budget that he was extending the relief until the end of 2020 as part of a series of measures to assist sectors of the economy that might be adversely effected by Brexit.

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Revenue figures show that 88 people in the €75,000-€150,000 income bracket availed of the programme in 2014, with 79 earning €150,001-€225,000. Sixty-three who were on incomes of €225,001-€300,000 availed of the relief, with 29 who were earning between €300,001-€375,000. In addition, 43 executives earning more than €375,000 benefited from the tax break.

According to employers, there was an increase of 126 employees as a result of Sarp in 2014, while 708 were retained as a result of the relief, employers said. The financial services industry accounted for 101 employees who availed of Sarp in 2014, followed by the IT sector at 79.

The Special Assignee Relief Programme provides for income tax relief on a proportion of income earned by an employee assigned to work in the State for their employer. They can claim to have 30 per cent of their income over €75,000 disregarded for income tax purposes. A relevant employer is a company incorporated and tax resident in a State with which the Ireland has a double taxation agreement or a tax information exchange agreement.