DOMICILE LEVY:WEALTHY PEOPLE who are domiciled here but not resident for tax purposes may be levied at €200,000 per a year from next year.
Mr Lenihan told the Dáil that the tax treatment of non-resident individuals by Ireland was broadly in line with most other OECD countries.
“But we must ensure that every wealthy Irish domiciliary who pays little or no income tax makes a contribution to the State, especially during times of economic and fiscal difficulty.”
Accordingly, the Government is to introduce a measure to ensure that all Irish nationals and domiciled individuals whose worldwide income exceeds €1 million and whose Irish capital is greater than €5 million, will pay an Irish domicile levy of €200,000 per year, regardless of where they are tax resident.
He said the full details of the measure would be set out in the Finance Bill. He made no attempt to estimate the value of the measure in a full year.
There were mixed reactions yesterday. KPMG partner Robert Dowley said the levy was “unexpected . . . Its potential impact on investment in Ireland will need to be reviewed closely.”
Mark Barrett, taxation partner with Moore Stephens Nathans, said it was difficult to know how those being targeted would react.
“Will they simply pay the levy of €200,000, or will they reduce their capital in Ireland below €5 million? The latter is not very likely.”
He said there was a similar levy principle in the UK.
Martin Phelan, head tax adviser with solicitors William Fry, said the levy would raise little money.
“Instead, it may encourage them to close their businesses in Ireland, leading to increased unemployment within the Irish job market.”
