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Ireland's Rich Take Advantage of Tax Breaks
By Andrew Bushe
DUBLIN - Eleven Ireland-based people recently earned over a million euros yet did not pay a single cent in tax, while a mystery "artist" made 10 million euros and kept the lot. Generous relief provisions under Ireland's tax laws are allowing some of the country's super-rich to bank all of their gross earnings.
With Finance Minister Brian Cowen due to present Ireland's latest annual budget to parliament on Wednesday, revelations about a range of quite legal tax relief deals have been thrust into the political spotlight.
A series of parliamentary questions tabled by opposition MPs have led to disclosures from the country's tax-collecting authority, the Revenue Commissioners, about just how valuable relief is for the very wealthy.
Since the revelations, an opinion poll in one of the country's newspapers showed 74% of voters want Cowen to close off the tax loopholes.
The years of the Celtic Tiger economic boom has resulted in a jump in the numbers of what the tax collectors call "high wealth individuals".
In recent years Ireland has been grappling with the scandal of so-called "legacy" tax problems - widespread illegal evasion dating back decades. But now fortunes are being saved as big earners take advantage of legal loopholes. Artists' earnings are exempt, stallion owners get a free ride on stud fees and there are over 30 other reliefs involving areas like film making, multi-storey car parks, pensions' investment, business expansion, historical homes, holiday cottages and private health clinics.
The most recent year for which Revenue figures are available - an eight month taxable period in 2001 during a transitional switch to calendar taxation - showed 11 people declared earnings of over a million euros without any liability.
Labour finance spokeswoman Joan Burton was outraged when she was supplied with the details. "When you think of a lone parent with a job earning about 340 euros a week and the fact they end up in the tax net, the figures are absolutely stunning."
Cowen told her the gross incomes were reduced by various "relevant deductions and allowances" and in some cases the result was "nil" taxable income.
It has also emerged that a tax break introduced in 1969 to help struggling artists resulted in 1,323 exemptions granted at a cost of 80 million euros in 2001. Writers, painters, sculptors, composers and lyricists - 28 of them with earnings of between 500,000 and 10 million euros - paid no tax on their artistic income. There were few high earning artists when the scheme was introduced.
Not any more, however, as Irish bands including U2, the Corrs, Boyzone and Westlife, and singers such as Enya, Van Morrison and Chris de Burgh have all earned superstar wages in recent years.
Ireland also has very successful writers and one of those benefiting from tax breaks is Cecelia Ahern, daughter of Prime Minister Bertie Ahern. She recently claimed relief for the reported one million euros earned from sales of her best-selling first novel "PS I love you".
--AFP
By Andrew Bushe
DUBLIN - Eleven Ireland-based people recently earned over a million euros yet did not pay a single cent in tax, while a mystery "artist" made 10 million euros and kept the lot. Generous relief provisions under Ireland's tax laws are allowing some of the country's super-rich to bank all of their gross earnings.
With Finance Minister Brian Cowen due to present Ireland's latest annual budget to parliament on Wednesday, revelations about a range of quite legal tax relief deals have been thrust into the political spotlight.
A series of parliamentary questions tabled by opposition MPs have led to disclosures from the country's tax-collecting authority, the Revenue Commissioners, about just how valuable relief is for the very wealthy.
Since the revelations, an opinion poll in one of the country's newspapers showed 74% of voters want Cowen to close off the tax loopholes.
The years of the Celtic Tiger economic boom has resulted in a jump in the numbers of what the tax collectors call "high wealth individuals".
In recent years Ireland has been grappling with the scandal of so-called "legacy" tax problems - widespread illegal evasion dating back decades. But now fortunes are being saved as big earners take advantage of legal loopholes. Artists' earnings are exempt, stallion owners get a free ride on stud fees and there are over 30 other reliefs involving areas like film making, multi-storey car parks, pensions' investment, business expansion, historical homes, holiday cottages and private health clinics.
The most recent year for which Revenue figures are available - an eight month taxable period in 2001 during a transitional switch to calendar taxation - showed 11 people declared earnings of over a million euros without any liability.
Labour finance spokeswoman Joan Burton was outraged when she was supplied with the details. "When you think of a lone parent with a job earning about 340 euros a week and the fact they end up in the tax net, the figures are absolutely stunning."
Cowen told her the gross incomes were reduced by various "relevant deductions and allowances" and in some cases the result was "nil" taxable income.
It has also emerged that a tax break introduced in 1969 to help struggling artists resulted in 1,323 exemptions granted at a cost of 80 million euros in 2001. Writers, painters, sculptors, composers and lyricists - 28 of them with earnings of between 500,000 and 10 million euros - paid no tax on their artistic income. There were few high earning artists when the scheme was introduced.
Not any more, however, as Irish bands including U2, the Corrs, Boyzone and Westlife, and singers such as Enya, Van Morrison and Chris de Burgh have all earned superstar wages in recent years.
Ireland also has very successful writers and one of those benefiting from tax breaks is Cecelia Ahern, daughter of Prime Minister Bertie Ahern. She recently claimed relief for the reported one million euros earned from sales of her best-selling first novel "PS I love you".
--AFP
