OPPOSITION POLITICIANS have heavily criticised measures included in the Finance Bill 2012 which provide tax exemptions for foreign executives who come to work in Ireland.
Under the ‘Special Assignee Relief Programme’ (SARP) employees from overseas who sign up for at least one year or at most five years will be exempt from income tax on 30 per cent of salaries between €75,000 and €500,000.
Socialist Party TD Joe Higgins and Sinn Féin’s Pearse Doherty criticised the tax break, saying that they left Irish employees at a disadvantage while favouring foreign workers.
“Fine Gael and Labour are repeating the mistakes of Fianna Fáil,” Doherty said this evening.
“They are introducing a Finance Bill that will heap more taxes on low- and middle-income families while at the same time giving a tax break amounting to millions of euros to high earners. They are doing so without any guarantee that this new tax break will result in a single job being created.”
Meanwhile, Fianna Fáil’s Michael McGrath TD said that while the Bill contained some welcome measures such as changes to the R&D tax credit system, overall, it “lacks ambition and has a distinct lack of creative thinking.”
‘Incentive’
Responding to the criticism, Minister Michael Noonan told RTÉ’s Six One News that the IDA requested this added incentive for foreign executives to encourage foreign direct investment in Ireland.
He said that Irish people get “very good employment” from this area of investment in Ireland, and that the incentive will only apply to people whose skills are not available here.
The American Chamber of Commerce in Ireland welcomed the move. Head of the Chamber’s taxation group Anna Scally said that it was not simply “a matter of creating a special incentive to attract high earners into Ireland – it is a talent and competitiveness issue”.
“There is huge competition in this area and it is critical that Ireland can offer an attractive and effective system if we are to compete for serious talent and key decision makers,” she added.
Asked about the introduction of a Foreign Earnings Deduction for income earned abroad by Irish workers, Noonan said that export-led growth has been identified as Ireland’s path for economic recovery and that ”this is a small incentive” for Irish businesses who are selling products in China or India.
The minister also said that the extension of Mortgage Interest Relief to first-time buyers who bought between 2004 and 2008 will help those who bought their home at the height of the property boom.
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