The cost to the exchequer of a special tax relief designed to attract overseas executives and companies to Ireland rose by 12 per cent in 2022 to €48 million, according to a Revenue document published alongside the budget on Tuesday. The figure included €500,000 of tax relief on school fees.
The number of executives availing of the Special Assignee Relief Programme (Sarp) also rose sharply during the year to 2,663, up from 1,982 in 2021. The number of executives earning €3 million or more was 19 in 2022, up from 14 a year earlier, with another 66 earning between €1 million and €3 million.
There were just 11 claimants in 2012, with the number rising steadily over the past decade.
Some 13 per cent of the claimants were Irish with 17 per cent coming from the US and India. Some 23 per cent of executives were living in the US before moving to Ireland, with 17 per cent in India, 10 per cent from the UK and 5 per cent from Russia.
Introduced in 2012, Sarp provides relief from income tax on 30 per cent of a salary over €75,000, or €100,000 for those who arrived after January 1st, 2023. An upper income threshold was set at €1 million for those who began claiming from 2019 onwards and the executives are liable to pay the Universal Social Charge (USC) and PRSI.
School fees of up to €5,000 a year per child and expenses incurred on one trip home per year, where they are paid for by the employers, are not subject to tax, USC or PRSI.
The aim of the relief is to reduce the cost to employers of assigning skilled individuals in their companies from abroad to take up positions in the Irish-based operations of that entity. It was designed to facilitate development and expansion of multinational businesses in Ireland.
Revenue figures show that the number of staff employed by companies as a result of Scarp rose by 428 in 2022, down from 636 in the previous year. Some 1,569 employees were classed as “retained” as a result of the tax relief. Some 592 employers had executives claiming on Scarp.
The information and communication sector was the biggest source of claimants (830) followed by financial services (527) and manufacturing (418).
The statistics are based on an analysis of Sarp employer returns filed for the 2022 tax year and may be revised, according to Revenue.
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