Joanna Tuffy (Dublin Mid West, Labour)
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Question 107: To ask the Minister for Finance if there are any bands of income that avoid paying the minimum rate of tax; and if he will make a statement on the matter. [36475/12]

Michael Noonan (Limerick City, Fine Gael)
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I understand that the Deputy is referring to the restriction on the use of reliefs by high income individuals which was introduced with effect from 2007. As indicated in my reply of 17 November 2011, to which the Deputy refers, the objective of the restriction for the years 2007, 2008 and 2009 was to ensure that individuals with adjusted income of €500,000 or more paid an effective rate of tax of approximately 20% on that income. Following a tightening of the restriction in Finance Act 2010, the objective from 2010 has been to ensure that individuals with adjusted income of €400,000 or more pay an effective income tax rate of approximately 30% on that income. For the years 2007, 2008 and 2009, where adjusted income was between €250,000 and €500,000, a graduated application of the restriction meant that the effective rate of tax increased towards 20% as adjusted income increased towards €500,000. For 2010 and later years, the graduated application of the restriction is designed to ensure that the effective rate of tax increases towards 30% as adjusted income increases towards €400,000. Details of the number of individuals who were subject to the restriction and to whom the tapering system applied for the years 2007, 2008 and 2009 are available on individual reports headed "Analysis of High Income Individuals' Restriction" on my Department's website at: http://taxpolicy.gov.ie/restriction-of-reliefs/. Statistics are given in each report in relation to a number of bands of income under €500,000 and include the average effective rate of tax that applied to individuals within each band both before and after the application of the restriction.

Details of the number of individuals who were subject to the restriction in 2010 and to whom the tapering approach applied in that year will be included in a further report on the application of the restriction for 2010. This report is currently being finalised and will be made available on my Department's website in the coming weeks.

The particular circumstances of each taxpayer will determine the effective income tax rate in any year.