47 – 49 Pearse Street, Dublin 2

Special Assignee Relief Programme Consultation,

Income Tax Incentives Section,

Fiscal Policy Division,

Department of Finance,

14-16 Upper Merrion Street,

Dublin 2

9 May 2014

By email to: taxpolicy@finance.gov.ie

Dear Sir/Madam,

Consultation on Special Assignee Relief Programme

We refer to the public consultation which commenced on 31 March 2014.

Your consultation paper requests views on Special Assignee Relief Programme (SARP), its operation, views on whether the programme should be extended or not and suggestions for changes should the programme be extended. In summary, our position is that SARP is in principle a worthwhile tax relief which Ireland requires to compete for FDI. However, the relief as it is currently designed is too restrictive and requires substantial amendment to make it best in class for the purposes of attracting international assignees and their corresponding business into Ireland.

The SARP is not a tax expenditure item. It actually contributes to the national Income Tax take because it generates income tax from individuals who otherwise would be outside the charge to Irish income tax.

The regime introduced in FA 2012 has failed to generate any significant level of economic activity because of the following restrictions:

• The emphasis on basic pay as a qualifying criterion for entitlement is contrary to the tax equalisation arrangements in place with many multinationals,
• Over a certain threshold, less tax relief is available than was available in the pre-2012 scheme,
• No relief is offered either from the USC or PRSI,
• The requirement that the assignee must be non-resident elsewhere is too restrictive and the relief should be made available to all assignees to Ireland once they become tax resident in Ireland,
• The existing condition of at least 12 month's prior service with the foreign employer should be relaxed and the relief should be open to all new hires,
• Overseas travel is an integral part of any business which operates across borders and the relief should not operate in a way which restricts normal business travel, and
• The application and reporting requirements of the relief should be simplified as much as possible.

The SARP is a means of attracting highly skilled workers to Ireland who in turn will act as magnets in bringing more business and investment into the country but only if SARP can hold its own against competing jurisdictions. The relief should aim to be best in class or at least internationally competitive. This can be achieved by removing the restrictions outlined above. In addition, the relief should be increased to 35% of qualifying income and the maximum earnings limit should be removed.

About CCAB-I

The Consultative Committee of Accountancy Bodies – Ireland is the representative committee for the main accountancy bodies in Ireland. It comprises Chartered Accountants Ireland, the Association of Chartered Certified Accountants, the Institute of Certified Public Accountants in Ireland, and the Chartered Institute of Management Accountants.

Brian Keegan, Director of Taxation at Chartered Accountants Ireland (brian.keegan@charteredaccountants.ie, 01-6377347) may be contacted if any further details in relation to any points made in this submission are required.

Freedom of Information

We note the scope of the Freedom of Information Act in regard to the submission. We have no difficulty with this response being published on the Tax Policy website of the Department of Finance. This response will be published on our own website and will be available to all of our members and the general public.

Yours faithfully

Paul Dillon, Chairman, CCAB-I Tax Committee

Source: Chartered Accountants Ireland. www.charteredaccountants.ie