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- Ceisteanna Eile - Other Questions: Tax Reliefs (10 Apr 2024)
Pearse Doherty: This is in relation to the benefit-in-kind, BIK, exemption for employer contributions to PRSA legislation that was introduced in the Finance Act 2022. It appears to me that this is facilitating aggressive tax planning. It also appears to me that the Department was warned this was happening, probably on more than one occasion. It was also warned prior to its introduction that it would or...
- Ceisteanna Eile - Other Questions: Tax Reliefs (10 Apr 2024)
Michael McGrath: Section 22 of the Finance Act 2022 removed the difference in treatment between PRSAs and occupational pension schemes in relation to the funding rules, by abolishing the BIK charge on employer contributions to an employee's PRSA. In addition, employer contributions to an employee's PRSA are no longer counted towards an employee's age related and salary percentage limits on tax deductible...
- Ceisteanna Eile - Other Questions: Tax Reliefs (10 Apr 2024)
Pearse Doherty: ...equity in our tax system, to control revenue and to prevent abuse. The changes made by the Minister, Deputy Donohoe, undermined all of those objectives. Previously, employer contributions to PRSAs were subject to income tax and USC. While a portion of those contributions could receive tax relief under the age-related percentage limit – something the Minister, Deputy Donohoe,...
- Ceisteanna Eile - Other Questions: Tax Reliefs (10 Apr 2024)
Michael McGrath: This was a policy decision that was taken following careful examination by the interdepartmental group. The final conclusion of the report was that the differential treatment of the PRSAs for funding purposes should be abolished and employer contributions to PRSAs should not be subject to BIK. The interdepartmental report was subject to a public consultation. The responses to the...
- Ceisteanna Eile - Other Questions: Tax Reliefs (10 Apr 2024)
Pearse Doherty: ...of the interdepartmental group on pensions and tax reform but it is a clear misunderstanding of the reading of the group's recommendation, which was to abolish the differential treatment of the PRSA for funding purposes compared to occupational schemes. That was not done. Occupational schemes are benefit-limited. The changes made to PRSAs has totally reversed the position rather than...
- Ceisteanna Eile - Other Questions: Tax Reliefs (10 Apr 2024)
Michael McGrath: ...aware of the proposal made by the society at the time. That was considered. A number of alternative options were explored, including an additional separate BIK limit for employer contributions to PRSAs and the new PRSA product mimicking the salary-based limits on occupational pension schemes to be used where an employer wished to make contributions to an employees PRSA. However, both...