Sinn Féin tells multinationals it will 'abolish tax deal' for high-earning executives
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Sinn Féin has told large multinational companies based in Ireland it is “committed to a high-wage economy”, but will abolish special tax breaks for highly paid executives if elected to government.
Senior party figures, including its finance spokesman Pearse Doherty, have engaged with large employers, including the likes of Facebook and Google and other major tech firms, in recent weeks amid rising expectation the party will be in government after the next general election.
The firms have been keen to understand what is likely to happen to Ireland’s corporation tax rate under a Sinn Féin government as well as seeking to maintain such preferential tax arrangements for certain high-income earners, some of whom earn between €1m and €3m a year.
In the line of fire for the party is the controversial Special Assignee Relief Programme (Sarp), established in 2012 to entice entrepreneurs and social innovators into Ireland by providing additional tax relief on high incomes for up to five years.
Such tax breaks have cost the exchequer up to €42m a year.
In such meetings, the party has made clear it will abide by the OECD tax agreement on corporation tax and it is committed to allowing high wages and a sustainable tax base.
Mr Doherty and the party have made clear to the companies, though, that Sinn Féin does not support such a tax break that in one year gave 55 millionaires breaks worth more than €111,000 each.
In a statement to the , the party said it engages with stakeholders across every sector — that includes employers in the multinational sector.
“In our engagement with employers, we have stated our commitment to a high-wage economy and sustainable tax base,” it said.
“That includes increasing research and development through changes to the tax system, implementing the OECD international tax agreement and maintaining the current 12.5% rate, and protecting Ireland’s competitiveness by tackling long-run failures in housing and childcare.
“It also includes recognising that there are areas of expenditure that must be prioritised and others that cannot be sustained, such as the Special Assignee Relief Programme,” the party said.
However, business groups have said such tax breaks are crucial to enable Ireland to compete internationally for such talent.
Gerard Brady, Ibec's head of national policy and chief economist, said abolishing Sarp “would risk damaging Ireland’s ability to compete for highly skilled staff”.
He said highly skilled and increasingly mobile workers are the key to competitiveness in an age where knowledge and intangible capital are driving global growth.
For this reason, temporary schemes to attract highly mobile skilled workers exist in 25 EU countries including competitors in the Netherlands, the UK, Denmark, Sweden, France, Italy, Spain, Portugal and Belgium.
“Abolishing SARP, on top of existing challenges in the rental market, public infrastructure, and quality of life, would risk damaging Ireland’s ability to compete for highly skilled staff and the investments they are crucial in delivering,” he added.
According to the most recent data, 50 executives earning between €1m and €3m benefited from Sarp in 2019, with significant tax write-offs available on a large chunk of their income.
The scheme also allows write-offs of private schooling fees up to €5,000 and the cost of a return trip home once per year, if paid for by the person’s employer.
In 2019, a total of 1,574 people were enrolled on Sarp, with 433 in finance and insurance, 337 in technology, and 258 in wholesale or retail trades. Of those benefiting, 27% were from the United States, 14% from the UK, 13% were Irish people returning to work at home and 8% were from India.
Mr Doherty has also said the party will not increase tax on the profits of SMEs, and has “long argued” for enhanced research tax credits for them.
Finance Minister Paschal Donohoe is reviewing Sarp ahead of the budget.