Tax sweetener for foreign bosses gets sour response
THE Government's sweetener to foreign executives fell flat on its face last year -- less than 10 highly skilled executives thought a boost to tax breaks for foreigners in 2009 justified a move to Ireland.
In December 2008, Finance Minister Brian Lenihan partly revived the tax breaks for foreign executives that were abolished by his predecessor, Brian Cowen, in 2006.
However, it appears the limited reintroduction of the tax breaks -- under the remittance scheme -- attracted only a handful of professionals to the country last year.
"Anecdotal evidence indicates that very few people availed of the scheme in 2009 -- possibly in single digits," said a spokesman for the Department of Finance.
Before last December's Budget, multinationals urged Lenihan to improve the remittance scheme as recent tax hikes made it almost impossible to attract talent here.
Last week's Finance Bill enhanced the scheme to allow executives who come from the European Union and European Economic Area to claim tax breaks -- which was not previously the case.
The bill also reduced the number of years that executives had to remain in Ireland to avail of the scheme. "The number of people who could avail of the remittance scheme in 2009 was very limited," said Brian Keegan, director of taxation with Chartered Accountants Ireland.
"It was largely confined to people from the US and Australia. People like that are highly mobile so last year's three-year restriction was a real impediment to taking up the scheme."
Executives must now only stay in Ireland for one year to be eligible for the tax breaks.
As well as being unable to attract foreign talent to Ireland last year, about 13,400 Irish jobs were lost to companies supported by the IDA.