Varadkar says high Irish tax rates are a problem – is he correct?

Smart Money: Tax rates are only part of the story

Facebook’s Dublin headquarters. The group has decided to  allow some of its employees to work from overseas permanently. Photograph: iStock

Facebook’s Dublin headquarters. The group has decided to allow some of its employees to work from overseas permanently. Photograph: iStock

In a comment on the decision by Facebook to allow some of its employees to work from overseas permanently, Tánaiste Leo Varadkar said the Republic’s high tax rates will be a “major disincentive” when competing for remote workers. If employees working for companies based here locate themselves overseas permanently, then Ireland will lose the associated income tax revenues – and the spending here by these more highly paid employees. But are tax rates here really that high by international standards?

1. Irish income tax is about more than rates

Irish income tax rates are, indeed, high by international comparison. Most of the employees in the multinationals where remote working will be an option will face a marginal rate – the amount they pay on their next euro of income – of around 52 per cent. Those earning at higher levels – well over €100,000 – will face income tax bills at the higher end of the international average, especially if they are single. But tax rates are only part of the story in terms of how people pay tax.

The Irish Times
Please subscribe or sign in to continue reading.
The Irish Times

How can I keep reading?

You’ve reached an article that is only available to Irish Times subscribers.

Subscribe today and get the full picture for just €1 for the first month.

Subscribe No obligation, cancel any time.