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Tax breaks helped to keep our biggest stars at home

He may be off to France to become a kicking coach, but Ronan O'Gara is the latest Irish rugby player to become eligible for a major tax break on income earned in Ireland during his career, having retired as a player with Munster.

Rugby in Ireland has for over a decade benefited from tax breaks aimed at encouraging most of our best domestic players to ply their trade here at home.

Under the scheme, introduced in 2002 by Charlie McCreevy, the then finance minister, key sportsmen who end their playing careers in Ireland can claim back 40 per cent of the tax they paid over a 10-year period.

Such tax breaks helped to keep some of Ireland's biggest stars – including O'Gara, Brian O'Driscoll and Paul O'Connell – at their provinces, but the pending high-profile departure of Jonathan Sexton to Racing Metro has raised calls for the system to be extended.

According to figures obtained from the Revenue Commiss-ioners, the estimated cost of the tax breaks has been over €1.7m, but a more detailed breakdown of what individual players received was not available.

Speaking recently, former Irish player turned consultant, Niall Woods, said the tax break had helped significantly in developing the reach of rugby in Ireland.

"The real benefit of this tax relief is that it enables the public to see their heroes playing in Ireland. This has been very important in growing the game, particularly when you compare it to soccer, where most of the big stars play in the English Premiership."

By keeping most Irish players at home, the IRFU has been able to rest important international players before Six Nations matches – a key gripe of other rugby unions.

In March, it was reported in this newspaper that O'Gara's company, Stand Off Promotions, had agreed a settlement with the Revenue Commissioners.

A recent review of the accounts for Ronan O'Gara's company shows it booked a loss for the year to April 30, 2011, of €1.1m, wiping out the firm's previous accumulated profits. In 2010, there were profits of almost €812,000 and there was a healthy €500,000 on the balance sheet a year earlier.

Irish Independent