Escaping Ireland’s High Personal Tax Rates

While Ireland has a very attractive 12.5 percent corporate tax, the tax treatment of individuals is much less benign. The top tax rate on personal income is 42 percent, and capital gains are hit with a 20 percent levy. As a result, more than 3,000 of Ireland’s most productive people have become non-residents for tax purposes, including at least half of the nation’s wealthiest citizens. The Sunday Business Post reports:

Although Ireland’s tax rates are relatively low by international standards, an increasing number of high-net-worth individuals are deciding to leave the country of their birth and move to places with more welcoming and forgiving tax regimes. …New figures prepared by the Revenue Commissioners finally reveal just how many tax exiles have decamped Ireland for other jurisdictions. According to new figures obtained by The Sunday Business Post, there are 19 high-net-worth individuals who are Irish domiciled but who are legally non-resident for tax purposes. The figures, from the Department of Finance, only includes individuals whose net worth (their assets less their liabilities) is valued at more than €50 million. …Of the top 20 individuals on the Irish Rich List, at least half are tax resident outside Ireland. John Magnier and JP McManus, the Irish horseracing tycoons, are both based in Geneva, as is Hugh Mackeown, the chairman of the Musgrave Group, the €4.6 billion Cork retail giant. Michael Smurfit, the packaging magnate, is the honorary Irish consul to Monaco, while dancer Michael Flatley also pays his tax in the principality. Billionaire financier Dermot Desmond officially resides in Gibraltar. …The 19 names on the list are just the top of the tax exile iceberg, however. According to the Department of Finance, it only includes individuals who filed an annual return in Ireland for the 2005 financial year. …It is not just the high rollers who are relocating to tax-efficient economies. According to the Revenue Commissioners, Ireland now has more than 3,000 tax exiles who claim non-residency. Many of these individuals are not in the top 250, but have serious wealth nonetheless.