The euro’s recent decline in value against other major currencies is viewed as a good thing for the country’s exports and tourism industry.

It has also bolstered the spending power of employees in Ireland – mostly working for US multi-nationals or the American Government – on dollar contracts.

This is neatly captured in a recent fact alert by Michael Rooney, who is head of global mobility services at KPMG in Dublin.

“On July 23rd 2014, the US dollar was worth 74 cent against the euro. On January 23rd 2015, it was worth 89 cent. An increase of 20 per cent – what a difference six months makes,” Rooney stated.

There’s a similar effect for those with sterling contracts, who will have achieved an increase of about 13 per cent in that time.

This means the expats here will have more money to spend, and that the Government has more income to tax.

‘Direct cost’

“Of course, for any Irish employer getting charged for the direct cost of these employees (and there is no hedging in place) the employment costs for the Irish business will also increase,” Rooney added.

It’s not clear how many workers in Ireland are on dollar contracts but Rooney estimates that it must at least be in the hundreds given the large number of US businesses with operations here.

This might also result in more people seeking to avail of the Government’s Special Assignee Relief Programme (Sarp), where qualifying employees can get a reduction of 30 per cent on their taxable employment income in excess of €75,000.

Sarp was designed to attract key executive talent to Ireland but only 36 people availed of it in 2012 and 2013.

The terms have since been amended and with the dollar’s appreciation in value, Rooney believes more applications are now likely.