Monday, 15 July 2013

Prostituting Irish Citizenship

Nat O'Connor: Up until 1996, under the so-called "Passports for Investment" scheme, a wealthy investor could gain Irish citizenship as part of a deal involving an investment in Ireland of over £1 million. Some details of the scheme can be read in the Oireachtas record here.

A new proposal, raised in today's Irish Times, suggests that tax exiles could buy extra time in Ireland, while still remaining non-resident for tax purposes, would represent another bizaare and offensive example of Ireland pandering to wealthy individuals and allow them to live under a different set of laws from everyone else.

The suggestion apparently comes from the Forum on Philanthropy. While they are looking at innovative ways to encourage planned charitable giving, there is a substantial difference between providing tax breaks for charitable donations, and providing other inducements (including different laws about residence) to get people to give to charity.

For transparency: TASC is a not-for-profit charitable body (CHY 14778) that benefits from the current tax break. If anyone donates more than €250 per year, a further 31% can be claimed from Revenue, paid out of income tax paid by that donor. But whoever that donor might be, he or she must pay income tax in Ireland in the normal way.

It is noteworthy (in the above Oireachtas transcript) that the original "Passports for Investment" scheme was similar to schemes in various tax privacy and offshore finance regimes, including: The Bahamas; Belize; Panama; St. Christopher and Nevis; and Uruguay.

As the global debate continues about how to tackle tax avoidance and tax evasion by wealthy individuals and global corporations, the idea of selling time in Ireland for €36,500 a day should be treated with great suspicion if not outright disgust. It would mean that if a super-wealthy person wants to pop over for a game of golf or to do business, they would no longer have to worry about triggering the automatic requirement to pay their full share of tax in Ireland that year. Instead, the price for not having to follow the same tax residency laws as everyone else is suggested at €36,500 a day.

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