One in eight of our super-rich are tax exiles, reveals Revenue
Of the 450 “high wealth” individuals, 54 are resident abroad for tax purposes.
This is the first time the tax authorities have released figures relating to how many Irish tax exiles are in the super-rich league.
Revenue said that last year its “high wealth” section dealt with 450 individuals who have net assets worth more than €50m and non-residents with “substantial economic interests” in Ireland.
It said the “number of non-resident individuals that are considered by Revenue to be high-wealth individuals is currently 54”.
Membership of the “54” club is confidential. But some of Ireland’s biggest business figures are known to have moved their bases to generous foreign tax shelters. This means they only have to pay tax on Irish earnings and not on their worldwide income.
Denis O’Brien, the telecoms entrepreneur and significant stakeholder in Independent News & Media (INM), is tax resident in Malta. Dermot Desmond, the founder of NCB stockbrokers and another shareholder in INM, is tax resident in Gibraltar.
Michael Smurfit, the paper packaging tycoon, has moved to Monaco while the racehorse magnates JP McManus and John Magnier are both tax resident in Switzerland. The supergroup U2 moved part of their business from Ireland to Holland after the Government capped the tax exemption scheme for artists.
In contrast, Michael O’Leary, the Ryanair chief executive whose wealth is estimated at €438m by rich lists, famously said he is happy to pay his taxes here.
While the official number of “tax exiles” is 10,781, some are people who moved abroad, rent their homes and pay tax here on the rental income. Others are foreigners working for multinationals here, or who have investments here.
Collectively they generated €49m in tax last year although it’s not clear how much the super-rich club of 54 contributed.
The issue of tax exiles has riled the taxpaying public, according to recent research by the Labour Party which showed that tax exiles were one of the main issues exercising voters. The Government plans to examine the issue of tax exiles in the Budget, with Labour pressing to tighten up the residency rules.
To qualify as “non-resident”, they must spend less than 183 days a year in Ireland, or 280 days over two years.
Michael Noonan, the Finance Minister, has been lobbied by business interests claiming that any attempt to tighten tax exile rules would scare off investors. A “domicile levy” of €200,000 imposed on wealthy Irish citizens living abroad for tax purposes raised just €1.6m in 2010.
Gerald Nash, a Labour TD for Louth, said: “While it is a fact that Ireland now has a taxation system that is considered by international standards to be among the fairest in the world, the system at the higher end needs to be radically altered to ensure that exacting standards are applied to so-called tax exiles in terms of their treatment for tax purposes.”
Posted on October 29, 2012, in Government and tagged Dermot Desmond, Gerald Nash, Independent News & Media, Ireland, Irish, Irish News, John Magnier, labour, Michael Smurfit, Monaco. Bookmark the permalink. Leave a comment.