The financial services industry has welcomed the move by Minister for Finance Brian Cowen TD to make Ireland more ‘capital’ friendly, by removing the capital duty on shares in this year’s Budget. Last year, the duty was reduced from 1 per cent to 0.5 per cent, but over the course of the year, the industry urged the Minister to abolish the duty, as it led to an additional cost incurred by Irish companies raising capital by means of issuing shares. It is hoped that this move may pave the way for companies to locate their headquarters or holding companies in Ireland, following the introduction of the headquarter regime in Finance Act 2004.
Another welcome measure in the budget was the fact that the bank levy of 1 per cent tax on profits, which was introduced in 2002, wasn’t renewed.
However, industry is less than impressed with the Government’s proposal to abolish the ‘remittance basis’ of taxation for employment income.
The remittance basis of taxation is available at present to individuals tax resident in Ireland who are either not domiciled or not ordinarily resident in Ireland. For individuals, it has been possible to structure their employment remuneration in such a manner so as to avoid a liability to Irish tax on all or part of such income, and has been used to attract high calibre international staff to Ireland. |
