Business Irish

Friday 19 September 2014

Super-rich pay highest taxes yet

Published 10/08/2014 | 02:30

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The amount of tax collected from the super rich is rising almost twice as fast as previous years.

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The Revenue Commissioner's 'high wealth individuals' business team', which was set up to stockpile tax from the super rich, collected €644.8m from Ireland's wealthiest individuals last year, according to the latest figures. This was about €40m more than the amount collected in 2012.

In 2012, the tax-take from the rich came to €604.2m - about €22m more than collected in 2011.

This means the increase in the tax-take from the super-wealthy is now running at twice the pace it did during the depths of the recession.

The Revenue Commissioner's high wealth individuals' business unit only deals with individuals who have net assets worth at least €50m and non-residents with substantial economic interests in Ireland. Over the last three years, 450 individuals have paid tax to this unit - as well as 600 partners of the nine largest accounting and law firms.

The increase in the tax-take from the super wealthy suggests that the recent measures taken by the government to close off tax shelters and other loopholes is working, according to Pat O'Brien, tax director at Ernst & Young.

"The higher tax-take is probably down to the continued impact of changes made to tax shelters - many of which expired in recent years," said O'Brien. "The impact of ring fencing provisions, which restrict the ability to claim tax relief against certain income, could also be starting to filter through. It could also be down to the economy - a case of the rising tide rising all boats."

Despite the increased tax take from the rich, their average tax bill is still a tiny fraction of their overall wealth.

The richest 450 individuals, as well as the 600 partners of the top legal and accounting firms, paid an average tax bill of €614,095 last year. As these wealthy people are worth at least €50m each, it means their average tax bill is likely to be a tiny fraction of what their assets are worth.

Sunday Indo Business

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