DRAFT LEGISLATION was submitted to the Department of Finance by accountancy firms KPMG and Deloitte as part of the lobbying for a new scheme that will allow foreign executives working here pay less income tax.
The documents, released under the Freedom of Information Act, reveal the extent to which large professional services firms influence policymaking.
Tax partner with KPMG John Bradley and national tax partner with Deloitte Padraig Cronin separately submitted draft legislation as part of the process that led to the new measure.
The special assignee relief programme gives tax relief to foreign managers and executives who come here to work.
It applies to 30 per cent of all income between €75,000 and €500,000 and is worth €52,275 to an employee earning €500,000 per annum.
The measure also allows for vouched school fees of up to €5,000 per year to be free of benefit-in-kind tax. It is designed to encourage foreign direct investment into Ireland by making it cheaper for foreign firms to send top staff here.
The measure as introduced was not the same as outlined in the draft legislation sent to the department.
Documents relating to the measure have been released to The Irish Times on foot of a Freedom of Information request.
Mr Bradley sent draft legislation by email to Gary Tobin, head of the business tax team in the Department of Finance, in March 2011. The email referred to discussions the two men had had a week earlier and included suggested changes to section 825 B of the Taxes Consolidation Act 1997.
"I also attach a marked-up copy of how the existing section might look after these amendments were incorporated into a new section 825C," he wrote.
In September 2011 an assistant secretary in the department, Derek Moran, received a sizeable submission from Mr Cronin.
"Following our meeting of September 8th, I am providing additional details as requested regarding the expatriate tax comparisons that we presented to you," Mr Cronin wrote.
He pointed out that multinationals sending senior staff to foreign countries have to ensure they do not end up suffering financially because of higher tax rates in those countries, and so have to compensate the employees for any extra tax they have to pay.
"Based on our experience of workings with MNCs [ multinational corporations] and their employees, attracting such organisations to Ireland will be assisted if our taxation for expatriate employees were more beneficial. This would supplement the attractiveness of our Corporate Tax rate."
The day after the publication of the Finance Bill on February 8th last, Conor O'Brien of KPMG emailed Mr Tobin to say he had been involved in a conference call with members of the International Asset Finance subgroup (which is concerned with the aircraft leasing sector) and that there had been a "great deal of disappointment" in relation to the measures in the Bill.
The following day Mr Bradley emailed Mr Tobin to say that a number of multinationals had expressed their disappointment with the tax relief measures and suggesting that matters could be addressed with a few Committee State amendments.
