Fintan Warfield (Sinn Fein) | Oireachtas source

Section 18 provides for an extension to the measure, the special assignee relief programme, for a further three years until 2025. In addition, in the interests of improving the economic efficiency of the scheme, the Bill provides that for new entrants there will be an increase from €75,000 to €100,000 in the income threshold to avail of the scheme. Existing claimants will not be impacted by the change but Sinn Féin has consistently pointed out, time and again, that there are significant equity issues inherent in the special assignee relief programme, notwithstanding that no cost was provided for the extension of this measure in budget 2023.

The relief provides significant tax benefits to high-income individuals which are not afforded to other workers. The cost of the relief has increased significantly since its introduction. More than €38 million in 2019 in the relief was claimed in respect of 50 individuals earning in excess of €1 million with combined costs of €5.5 million in 2019. Significant issues have been raised with respect to the relief, not least by the Commission on Taxation and Welfare, including the fact that many multinationals tend to use tax equalisation, where an employee pays no more or no less tax while on international assignment than they would have paid had they remained in their home country, such that the benefit in these cases is actually passed on to the corporate employers.

Some 24% of the special assignee relief programme claimants in 2019 reported that they operated through the relevant employees payroll on a tax equalisation basis. The Commission on Taxation and Welfare recommended a number of changes with respect to the special assignee relief programme, including the application of a higher effective tax rate with respect to employees, a further reduction in the upper threshold, and restricting allowable expenses, including private school fees. None of these recommendations was implemented in the Fnance Bill 2022 and I call on the Minister to implement those recommendations. Sinn Féin will be opposing this section on the special assignee relief programme.