Business Irish

Saturday 17 March 2018

Ireland's 450 richest people hit for twice the tax paid in 2010

LARRY GOODMAN: Beef baron is worth about €670m
LARRY GOODMAN: Beef baron is worth about €670m


The 450 richest people in Ireland are being hit for almost twice as much tax as they paid in 2010 – the last year Fianna Fail was in power.

The taxman collected €604.2m from the super-wealthy last year – but only €337.7m was collected in 2010 from this wealthy elite.

The Revenue team charged with collecting tax from the wealthiest people in Ireland is known as the "high-wealth individuals business unit".

This team largely collects tax from people worth more than €50m and non-residents with "substantial economic interests in Ireland".

The surge in the amount of tax collected is a sign the rich are feeling the bite of tax increases – and is unlikely to be a sign that the wealthy are making more money, according to Donall Gannon, tax partner with KPMG.

"There is no evidence that the rich are getting any richer," said Mr Gannon.

"A lot of the wealthy Irish invested in property, stocks and shares – and they've been affected by the carnage that's gone on there. I think the increase in the amount of tax collected from the wealthy is down to the jump in the rates of tax charged, and the tightening up of certain tax relief schemes."

A few years ago, many of Ireland's millionaires had their fortunes tied up in property and Irish bank shares.

However, the wealthiest people in Ireland today are largely making their money outside the country.

These include beef baron Larry Goodman, who is worth about €670m; and Ryanair boss Michael O'Leary, who is worth €345m, according to the latest edition of the Sunday Independent Rich List.

Over the last few years, the Government has tightened up the tax reliefs often used by the wealthy to reduce their tax bills, including the artists' tax exemption. The Universal Social Charge, first introduced in 2011, has also hit high earners. Rich people must pay Universal Social Charge of 10 per cent on anything they earn over €100,000 – combined with other charges they could lose more than half of what they're earnings to tax.

Revenue's large cases division collects tax from large corporates, banks, insurers, pension companies . That division has also seen its tax take increase in recent years – though the increase is not as marked as it has been for the high-wealth individuals business unit. The large cases division collected €21.2bn in tax last year; slightly more than the €20.8bn collected in 2011.

The amount collected by the large cases division is unlikely to increase hugely until things improve for local Irish businesses, according to Mr Gannon. "Domestic businesses are struggling," he said. "So while the large cases division might be collecting more tax from international businesses, such as multinationals or exporters, the amount of taxes being collected from businesses in the local economy is falling."

Ireland's reputation took a battering earlier this year after the country was labelled a tax haven at a high-profile US Senate hearing.

Sunday Independent

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