Tax ‘trickery’ in Ireland: A safe haven you can bank on
By Vincent Browne, The Irish Times
Lee Hadnum, a former tax specialist with Ernst and Young, author of The World’s Best Tax Havens: How to Cut Your Taxes to Zero and Safeguard Your Financial Freedom, lists Ireland among the 28 world’s best tax havens. The others include Switzerland and Cyprus, of course, and a plethora of the better known tax havens: Andorra, the Bahamas, Barbados, Belize, the Cayman Islands, the Channel Islands, Gibraltar, Hong Kong, Isle of Man, Liechtenstein, Malta, Monaco, Panama, Seychelles, and Turks and Caicos Islands.
Some of these are “nil tax havens” – no income tax, no corporation tax, no capital gains tax and no inheritance tax, no matter where income is generated. The only taxes to worry about are local sales taxes and import duties. Then there is a group of havens which impose taxes on locally generated income but none at all on income derived from outside sources. Then there are the low-tax havens where some tax is imposed, but not much. Ireland is in this latter category.
Lee Hadnum advises: “In effect, a person resident in Ireland has only needed to pay tax on income brought into Ireland (the so-called remittance basis), so most income can be kept offshore to avoid paying income tax. In fact, if a suitable distinction is made between capital and subsequent income from capital before you take up permanent residence, it may even be possible to live in Ireland almost completely tax-free.”
Lowest rates of corporation tax
He notes that Ireland has one of the lowest rates of corporation tax in Europe, just behind the Isle of Man and Channel Islands, which have a zero rate, and Cyprus and some eastern European states, with a 10 per cent rate. He writes: “Ireland has been a very popular alternative offshore choice for many multinationals, which transferred some of their operations to Irish companies to reduce their overall effective tax rates. Ireland therefore offers tax saving opportunities at both the corporate and personal level.”
Incidentally, The Worlds Best Tax Havens is published by Taxcafe UK Ltd and among its other publications are How to Avoid Property Tax. However, it is not clear if Taxcafe has heard of Phil Hogan.
The prominence given to Ireland by Taxcafe and in the recent debates on tax havens seems disproportionate given the prevalence of havens for the world way beyond the dodgy locales of the Caribbean.
In Treasure Islands: Tax Havens and The Men Who Stole The World by Nicholas Shaxson, the author, writes: “Ireland is a wonderful, special country in many ways. But when it comes to providing foreigners with lax financial regulation or tax trickery, it is a goddamned rogue state , yet it gets kid gloves treatment. ‘This is a member of the European Union or of the OECD’, the regulators will say and ‘we can’t be rude about them’.”
For more on this story go to:
