Tuesday 6 December 2016

PWC warned clients would leave over tax exile plan

Emmet Oliver Deputy Business Editor

Published 18/03/2010 | 05:00

The country's largest accountancy firm, Pricewaterhouse Coopers (PWC), warned the Government just before December's Budget that tougher curbs on tax exiles would lead to its clients dumping their Irish assets and selling their investments here.

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PWC, which advises the Government on the banks and NAMA, expressed concern about proposals from the Commission on Taxation in particular, which said that tax exiles should have their income assessed based on where their "vital interests" are.

The Government subsequently decided not to include this provision in the Finance Bill, which went through the Oireachtas a fortnight ago. Instead the Government has opted for a flat €200,000 charge on non-resident taxpayers.

A note of a meeting at the Department of Finance from November, in the lead up to the Budget, states: "Some of PWC's non-resident clients had contacted them in the wake of the recommendation in the report of the Commission on Taxation."

These clients had expressed concerns over specific recommendations in this report. "Initial indications were that some individuals would consider divesting themselves of Irish assets and investments if the commission's proposals were enacted."

Influence

The Department of Finance was not available to comment this week on whether the views from PWC had an influence on the decision to opt for the €200,000 levy, over other proposals.

The Commission on Taxation suggested that the thousands of non-resident taxpayers could face a new test on their income, beyond the current rule that they cannot spend more than 183 days in the country.

It said the Government could use a new "place of abode" or "centre of vital interests" test to do this.

This change would have forced more non-resident taxpayers into the tax net in Ireland, a senior tax adviser told the Irish Independent. These new tests would have been in addition to the existing 183-day rule.

The Government, however, is keen not to discourage investment in Ireland at a difficult time for the economy.

The meeting with PWC was attended by two of the Department of Finance's most senior tax officials, Derek Moran and Liam Smith.

The meeting makes it clear that PWC continues to provide advice to the department on tax issues.

The firm advises the Government on a range of issues, and won the contract to advise on the taxation aspects of NAMA.

The firm has also done stress tests of several Irish banks to see what their capital needs are.

Irish Independent

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