Joan Burton (Dublin West, Labour)

I move amendment No. 7:

In page 9, between lines 19 and 20, to insert the following:

2.—For the avoidance of doubt, nothing in respect of relief from taxation in respect of remittance arrangements is intended to constitute relief in respect of the income levy.".

With reference to the Minister's last comment, this amendment will test which of us is closer to Scandinavia and which to the Cayman Islands.

The Minister re-introduced the remittance basis. In that measure he suggested that if high rollers in the banks, the financial services industry and in research and development who were to come into Ireland and who were important to the development of a business, were non-domiciled and from outside the EU area, they would be taxed from now on according to the rules. As I understand it, they would then get a refund of tax in respect of income of more than €100,000 which they had not remitted into this country.

On the night the levy was announced, I recall the Taoiseach saying it would apply to everybody, without fear or favour. As I understand from the information presented by the Minister concerning the return of the remittance basis and tax voidance for very high rollers, these people may not incur the levy, other than in respect of the €100,000.

I would like the Minister to clarify the following point. Will someone who is on the remittance basis and who has an income from their multinational of, say, €200,000 a year pay €2,000 or €3,000 on the levy, or will that person pay just €1,000 on the remittance basis of €100,000 a year? If that person is to pay the lower amount, it is obviously a very neat piece of tax avoidance and completely gainsays what was committed to in this House on the discussion of the budget.

The purpose of this amendment is to ensure we have complete clarity and that the levy arrangements apply to the whole of such people's income. The Minister is offering them a very generous avoidance of tax based on the arrangements he brought forward. He is taxing somebody on €18,500 at 1%. What is he doing to those who are, as the Minister said, very high rollers? What are the Minister's intentions in this regard?

The Minister referred to people not conveying assets in order to avoid the levy. I did not suggest that; I referred to splitting income. I know that conveying assets can be expensive but splitting income in a family-owned company is not expensive. As I understand it, the levy applies to income. To give an example, a couple has an income of €200,000. If one person in that couple earns the €200,000, he or she pays 1% on the first €100,000, which is €1,000, and 2% on the second €100,000, giving a total levy liability of €3,000. If the couple splits the income between a husband and wife, giving each €100,000, they would both pay a 1% levy, so each would pay €1,000 and, therefore, their total levy bill as a couple is €2,000. If they split it even wider among other family members, which is perfectly allowed for, they may be in a position to diminish it even further because they could pay each of their children €17,500 and no levy would arise at all in regard to that. This facility is contained in the legislation.

The Minister referred to the Swedish model. He will tax people on €18,500 at 1% of all income, yet he is leaving wide open the capacity for perfectly legitimate avoidance by making arrangements in regard to income. He has not told us or made clear what anti-avoidance mechanisms exist.

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