Monday 25 March 2019

Comment: Generous GAA gesture from JP McManus comes with a caveat

JP McManus
JP McManus

Cormac Byrne

If you wish to thank JP McManus in person for his generous donation to every GAA club in the land you will have to catch him on one of the 182 days he is allowed to spend in Ireland each year while he retains his status as a tax exile.

The Limerick businessman was so moved by his native county's All-Ireland triumph and the glory of the 2018 hurling championship to donate €100,000 to each of the 32 county boards to be dispersed equally among their clubs.

Rural counties with fewer clubs will see parish teams receive almost €4,000 each. That equates to a lot of local lotto ticket sales.

McManus has been lauded for his gesture.

He has given large sums to charitable organisations, particularly in his locality.

He has pumped a lot of money into Limerick GAA (including €5m for the refurbishment of the Gaelic Grounds), a large number of smaller horseracing trainers rely heavily on the fact that they have thoroughbreds that carry the green and gold silks and a huge investment in Adare Manor has seen the Limerick venue become one of the finest golf courses on the planet and a contender to host a future Ryder Cup.

Bringing the Ryder Cup here would be an enormous boost for the local economy and Ireland as a whole, but the fact is JP McManus doesn't pay tax here and hasn't done so for over two decades. No amount of altruism will change that.

Would we utilise the global tax system if we were in his position? Probably. But most of us don't have that luxury.

The loopholes benefit the rich but they must choose to use them.

In 2011, he said: "I'm proud to be Irish. I'm doing the country more good by being abroad earning a few quid if I bring it back and decide to spend it whatever way I like, at least I am improving the economy.

"Do they not want you to come back and try and support the local economy, try to earn some money abroad and then put it in the local economy. That's what I like to do."

We don't have the luxury of pumping money into our hobbies. If we did, our local GAA club would probably be equipped with an Olympic-sized swimming pool.

A large proportion of our money goes into the public exchequer to keep our schools open, our streetlights on, our roads in order, our sewerage system flowing etc.

We don't get to pick and choose who benefits from our toil.

Call me a whinger or a begrudger but these are the facts.

JP McManus has been a tax-resident in Switzerland since the 1990s.

Last year, he lost a US legal action to recover $5.2 million (€4.9 million) in tax withheld from his winnings on a three-day backgammon match in 2012. He had won $17.4m in the game.

He had claimed that he was exempt from American income tax under the US-Ireland double taxation treaty because in 2012 he paid the €200,000 domicile levy, the Irish Government’s charge for Irish-domiciled individuals with substantial worldwide income and Irish property.

The US government argued that Mr McManus, a tax resident of Switzerland, could not benefit from the 1997 treaty because he was not a resident of Ireland for tax purposes in 2012.

McManus is well within his rights to avoid tax but that doesn't mean he avoids the criticism that comes with it.

Cash-strapped clubs will be delighted with the added cash but this money comes with a caveat.

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