Pearse Doherty (Donegal, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

153. To ask the Minister for Finance the cost or revenue raised by a policy of a 5% income levy on income above €140,000 for individual income based on the latest available individualised data together with the tapering of tax credits on individual income between €100,000 and €140,000 at the rate of 2.5% per €1,000. [48932/18]

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I am advised by Revenue that to calculate a combined cost for the proposals described by the Deputy, it is necessary to base all costs and calculations on 2016 tax return data. An exercise was undertaken on 2016 data to break down the gross incomes of taxpayer units to an individualised level and a manual estimation process (outside of Revenue’s usual tax modelling software) was required. As the exercise can only split gross incomes, this estimation process requires certain assumptions to be made in relation to the distribution of credits for the tapering on individual income.

Furthermore, it is assumed that the 5% levy on income above €140,000 proposed by the Deputy will not be subject to any credits, reliefs or exemptions.

Subject to these assumptions the estimated yield from these changes is set out in the table below.

Pearse Doherty (Donegal, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

154. To ask the Minister for Finance the revenue raised by increasing the rate of exit tax to be introduced in the Finance Bill 2018 from 12.5% to 20%, 25%, 30% and 33% respectively. [48961/18]

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

As part of Ireland’s commitment to ongoing corporate tax reform, including the implementation of the Anti-Tax Avoidance Directives (ATAD), Finance Bill 2018 introduced a new ATAD-compliant exit tax regime with effect from Budget night.

The ATAD exit tax regime will apply a charge to tax at 12.5% on certain unrealised capital gains where companies migrate or transfer assets offshore, without a disposal of the assets, such that they leave the scope of Irish tax. It replaces a pre-existing, more narrowly focused exit charge that was designed as an anti-avoidance measure following the identification of a number of transactions whereby Irish companies migrated their residence to avoid the charge to Irish Capital Gains Tax, disposed of an asset, and then subsequently migrated back into the State.

The new ATAD-compliant exit tax is a broad-based measure and it is expected that in time it will give rise to Exchequer revenue. However the nature of the charge is such that it will arise on occasional, stand-alone transactions – a charge will arise where a company migrates residence while holding assets, or transfers assets abroad, such that the assets leave the Irish tax net, in cases where those assets have increased in value and therefore hold an unrealised gain.

An estimation of the future recurring annual yield would require predicting future changes in asset values, in addition to projections as to future restructuring of companies. As any such estimate at this point would be highly theoretical, no specific provision was made in the Budgetary arithmetic for future exit tax yield, and equally it would not be possible to estimate the change in revenue if an alternate tax rate were to be applied.

With regard to the rate of exit tax, I am aware that the Deputy has queried the number of submissions to my Department’s public consultation on ATAD implementation which recommended a 12.5% exit tax rate. In total, 22 submissions were received in response to the consultation document, of which 15 responded to the question on exit tax. Of those 15, 12 proposed a rate of 12.5% and the remaining 3 responses did not make a recommendation with regard to the rate. All the submissions received are published in full on my Department’s website.