Pearse Doherty (Donegal, Sinn Fein) | Oireachtas source

I am sure Mr. Cody opens the purse strings and all the rest.

I saw a video on TikTok in the past couple of days on how to get money out of a company. Any company director will know about the problem of having money locked in a company that is going well. Under Irish tax law, somebody earning €18,000 does not pay income tax and they may pay USC. The point was made that, instead of giving €10,000 to a son or daughter to go to college – would it not be great to have a parent like that? – you can actually put them on the payroll of your company and give them a salary of €10,000. Obviously, it was suggested that the son or daughter would not really be working for the company. The point was that if a parent were giving €10,000 without doing what was suggested, it would cost €20,000, whereas the cost would be only €10,000 if the son or daughter were taken on as an employee. I am using that as an example because the issue of directors being able to draw money down from companies has always entailed a struggle, and Revenue has had to engage in cat-and-mouse activity.

Under current law, the challenge for a director is that if he or she draws down money from a company with millions of euro, it is taxable at the standard rate. Could a director employ his or her son and create a pension fund for him in one year worth €2 million tax free? Could the director then offset a portion of that against the company profits in the given year? Is that now permissible under tax law given the changes that happened in 2022? I am sure Mr. Cody is familiar with the issue. I have raised it a couple of times and we have received responses to parliamentary questions from the Department. I want clarity on the scenario. Can the director of an asset-rich company employ his or her son on the minimum wage, create a PRSA and put €2 million into it tax free? Would a person be able to claim €200,000 tax free and the other €300,000 at a rate of 20%, meaning that, of the €500,000, he would be paying €60,000 in tax, or tax at a rate of 12%.