Foreign executives could get €635k tax-free

High-earning foreign executives could make up to €635,000 in tax-free payments in Ireland under measures announced in the budget.

It was also claimed last night that a similar tax break to attract top executives was reversed in Spain after the ‘Beckham rule’ was exploited by 340 footballers.

Sinn Féin finance spokesman Pearse Doherty criticised the Finance Bill as it passed the second stage in the Dáil last night. He argued that tax breaks afforded to highly paid individuals under the special assignee relief programme would be exploited here.

Under the measure, an executive will have 30% of their salary above €75,000 and up to €500,000 — a maximum of €425,000 — exempted from income tax. They may avail of this for up to five years.

Mr Doherty claimed the individual could then earn up to €635,000 in tax-free payments over the period.

He said a similar tax break had been exploited in Spain. It became known as the Beckham rule after 340 international footballers used the tax break. Spanish authorities had been forced to reverse the tax break, Mr Doherty warned.

He said it was a Finance Bill of “two Irelands” which hit the low paid and rewarded the rich.

There was no requirement in the bill for individuals to create jobs, as was claimed by ministers, he added.

“It’s named after David Beckham. Of the 500 people who availed of the tax break in Spain, 340 of them are professional footballers. I don’t think that they’re renowned for their job creating skills in Spain and that’s why Spain has brought in legislation to change the rule,” Mr Doherty said.

Michael Noonan, the finance minister. has claimed the tax break will be policed by the IDA and is only being introduced on a temporary basis.

Mr Noonan earlier told the Dáil that individuals using the tax break would still have to pay small amounts of health and employment related taxes out of their salary.

He said: “However, PRSI and USC will be payable on all of the income. Let me make it clear to the deputies, this incentive is about reducing the costs to businesses of attracting key individuals from abroad to work in the Irish-based operations of their employer.

“The relief is designed to help firms who wish to assign employees from other parts of their company to come here to expand or develop their Irish operations which will help retain or increase employment here.”