Tax change lands IRFU in fight to retain players
The IRFU will be under more pressure to keep its star players in Ireland following a change to the tax code which up until now has encouraged them to play out their careers at home.
In an amendment made last week as part of the Finance Bill, players will be able to take up lucrative contracts abroad and still claim 40 per cent on their tax paid in Ireland – their best 10 years from the 15 years pre-retirement – without having to come back, so long as they are in an EEA (European Economic Area) or EFTA (European Free Trade Association) country when they make the claim.
Under a scheme introduced in 2002 by then finance minister Charlie McCreevy, professional sports people across any code could reclaim 40 per cent of the tax paid on earnings from the best 10 years of their careers so long as they were tax resident in Ireland when making the claim.
Contrary to popular belief, these 10 years did not have to be consecutive, nor did the players have to finish their careers with an Irish club, but they did have to be tax resident here before they could claim.
In rugby's case this militated against players leaving for more money-spinning deals abroad, especially in France where the financial rewards are highest, because not only could they not claim on tax paid in another jurisdiction, but they had to return home to claim.
This amendment however, could now make it much more attractive for some of our top players – many of whom are nearing the end of their current contracts – to consider moving abroad. Currently, there are at least 11 top-ranked Irish players out of contract at the end of this season, including Paul O'Connell, Rob Kearney, Jamie Heaslip, Donnacha Ryan, Rory Best and Conor Murray, and this news changes the landscape for them when they sit down to negotiate with the IRFU.
"My understanding is this (change) has yet to be ratified but this amendment is good news if it works out," John Baker, a players agent, said yesterday.
"People tend to forget the short window open to professional athletes – not just rugby players – and they're a long time out of the game when they retire. Obviously this has most relevance to rugby and I'd be delighted for those players if this comes true because they put their bodies on the line in a very dangerous sport and deserve what they can get form it."
No one from the IRFU was available for comment.
Meanwhile, Rob Flockhart, the citing commissioner on duty for Friday night's Pro12 encounter between Munster and Glasgow in Scotstoun, is understood to be looking into separate incidents of alleged foul play.
Flockhart must decide before 9.30 tonight if Glasgow scrumhalf Niko Matawalu has a case to answer over an alleged biting incident towards the end of the game, which was won by Munster.
Donncha O'Callaghan is the alleged victim. At the time he complained to one of the assistant referees. Referee Ian Davies from Wales could be heard subsequently on the referee comms link telling O'Callaghan that if there was an incident to be investigated that it was up to the citing commissioner.
Glasgow last night confirmed that they have written to the citing commissioner stating that the club believes "a dangerous act of foul play was committed by a Munster player against Niko Matawalu" during the game. A club spokesperson said they would be making no further comment while the matter is being investigated.
Connacht announced yesterday that they are releasing James So'oialo on compassionate grounds. The New Zealander arrived in Galway over the summer but needs to return home for family reasons.
"His situation was one we could sympathise with and we were able to organise a release, effective immediately," coach Pat Lam said yesterday.