Ireland’s tax exiles now number over 3,000

Ireland is home to more than 3,000 individuals or couples recognised as ‘non-domiciled’ for tax purposes, new figures from the Revenue Commissioners show.

So-called “non-doms” can avoid paying tax on their worldwide income in Ireland, thus avoiding the country’s high income and capital gains tax regime.

According to provisional data from the Revenue, 3,393 people filed their annual income return for the 2013 tax year on a non-domicile basis. Given that a tax return can apply to a couple, the true figure of those living in Ireland on a non-domiciled basis is likely to be substantially higher.

The issue of "non-doms" was brought into sharp focus earlier this week when Labour leader Ed Miliband tried to garner support ahead of the UK's general election by promising he would abolish the regime if elected.

Ireland operates the same regime – albeit an even more attractive one from a wealthy person’s perspective – as a fee of £90,000 applies in the UK, but not in Ireland.

If such a fee – even on an equivalent euro basis – was to apply in Ireland, the yield to the exchequer from those looking to live here on a non-domiciled basis could be as high as €305.4 million.

New figures from the Revenue also show that just 13 people paid the domicile levy of €200,000 in 2013, down from 14 in 2012 and 25 in 2010. The total yield from the levy for 2013 was €1.6 million, down from €1.7 million in 2012.

A credit is available on any Irish income tax paid, which means that not everyone will pay the full €200,000. For example, if someone pays €150,000 in Irish income tax in a year, their liability to the domicile levy for that year will be just €50,000.

Tax exiles

The levy applies to those with worldwide income of more than €1 million and Irish assets worth more than €5 million, but who pay Irish income tax of less than € 200,000.

It was introduced in 2009 by former finance minister Brian Lenihan as a means of getting non-resident and wealthy Irish tax exiles who paid little or no income tax to "make a contribution to the State, especially during times of economic and fiscal difficulty".

It was amended by Minister for Finance Michael Noonan to remove a citizenship clause, on the grounds that individuals couldn't avoid the tax by renouncing their citizenship.

However, the latest figures show the limited success of the regime in clawing back tax revenue from Ireland's wealthy, who may be domiciled here, but have their tax residence in a low-tax jurisdiction such as Malta or Monaco.