Elite foreign workers to save on tax
The finance minister yesterday announced a series of measures aimed at increasing Ireland’s attractiveness as a place to do business and creating employment.
They included generous tax breaks for key staff who relocate from abroad to the Irish-based operations of their employer for between one and five years and who earn more than €75,000.
Under the special assignee relief programme, the executive will have 30% of their salary above €75,000 up to €500,000 — a maximum of €425,000 — exempted from income tax.
This means an executive earning €500,000 would not pay income tax on €127,500 (30% of €425,000) of that salary.
This would save them €52,275 in a single year and as much as €261,375 if they stayed for the full five years.
Mr Noonan announced the breaks in the Finance Bill, the legislation to give effect to taxation measures announced in the budget.
He fulfilled his pledge to introduce extra tax relief for first-time buyers who purchased their houses at the height of the boom.
Those who bought between 2004 and 2008 will see their mortgage interest relief increased to 30% and will be entitled to this rate until 2017. This means some married couples could save up to €2,000 a year, while individuals could save up to €1,000.
Potential buyers are also being offered incentives, meanwhile, in a bid to kick-start the property market. Those who buy a house for the first time this year will receive mortgage interest relief of 25% rather than 15%, which could make a difference of up to €4,100 for a married couple and €2,050 for an individual.
Elsewhere, the bill makes provision to raise the income threshold at which people must begin paying the universal social charge from €4,004 to €10,036.
Mr Noonan said this would remove 330,000 people from the charge.
He defended the tax breaks for executives, saying these workers would still pay large amounts in tax and that similar incentive schemes were in place in countries competing with Ireland for investment.
“We must do everything to get extra growth and extra jobs in the economy.”
He also announced an array of other measures aimed at boosting foreign direct investment, small and medium enterprises, and the financial services industry.
Taoiseach Enda Kenny will seek to publicise these measures when attending a conference in New York today organised by Bill Clinton and aimed at securing new investment for Ireland.
Opposition politicians criticised the Finance Bill.
Fianna Fáil finance spokesman Michael McGrath said that while it contained some welcome measures, the bill overall was the “final chapter of a regressive and deeply unfair budget which has hit low and middle-income families the hardest”.
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