The accountancy profession has made submissions to the Minister for Finance which focus on the need to attract and retain highly skilled individuals to work in the economy.
CCAB-I argues that while there remains a clear need for Ireland to attract high skilled personnel to live and work in Ireland because of the contribution they make to the economy as a whole, any incentives which did exist in our tax system for such individuals have lost coherence. In particular, the current limited remittance basis does not work as an incentive. It should be either adjusted to make it workable, or scrapped in favour of an alternative incentive mechanism. The alternative proposed by CCAB-I is a targeted form of income disregard for Schedule E purposes.
The Minister also proposed increasing the effective rate of tax to 30% for individuals who are subject to the High Earners Restriction in using tax reliefs. The submission contains an analysis of the likely outcome of such an increase, and finds that it will discourage tax efficient investment in the economy.
The Criminal Justice (Money Laundering and Terrorist Financing) Bill 2009 modifies the concepts of what is a reportable suspicion for Anti Money Laundering purposes and in what circumstances such reports need to be made. CCAB-I draws the Minister's attention to the consequences of these changes to the Qualifying Disclosure regime, and that it may discourage taxpayers from coming forward voluntarily to arrange settlements of underpaid tax, interest and penalties.
The submission also picks up on matters proposed by the Minister in his Budget speech. In regard to the Irish Domicile annual levy of €200,000, it points out that such an arrangement runs counter both to best international practice and to the advice of the Commission on Taxation. It will be costly to administer and collect, and compliance levels will be over-reliant on the voluntary behaviour of the levy payers involved. The merit of this proposal should be reconsidered.
The full submission is available here