Róisín Shortall
Question:68. Deputy Róisín Shortall asked the Minister for Finance if he is now in a position to provide the details requested in Parliamentary Questions Nos. 202, 203, 204 and 205 of 1 December 2015. [2509/16]
View answerWednesday, 20 January 2016
Questions (68)
Written answers
In relation to questions 202 to 205 of 1 December 2015, the collation of the relevant details has taken some time. However, I am now in a position to provide the information requested by the Deputy.
I am advised by the Revenue Commissioners that the table below sets out, within each of the income ranges requested, the number of income earners, the average effective income tax rate and the number of income earners who had effective income tax rates of the levels specified.
Numbers of Income Earners at each Effective Income Tax Rate*
|
Taxable Income Range |
Numbers of Income Earners |
Average Effective Income Tax Rate |
< 1% |
Between 1% and 2% |
Between 2% and 5% |
Between 5% and 10% |
Between 10% and 15% |
|
€100,000 to €250,000 |
85,300 |
27% |
80 |
20 |
90 |
410 |
530 |
|
€250,000 to €500,000 |
7,900 |
35% |
16 |
4 |
10 |
20 |
20 |
|
> €500,000 |
2,300 |
37% |
5 |
2 |
3 |
10 |
10 |
*As a percentage of taxable income, and excluding USC.
The figures are in respect of the 2013 tax year, the most recent year for which data are available.
I am further advised by the Revenue Commissioners that included within the cases above are an estimated 50 income earners who had taxable income in excess of €100,000 but who had no final income tax liability in Ireland for 2013. These cases had their tax reduced as a result of the following reliefs and credits which are not included in calculating 'Taxable Income':
- Double Taxation Relief, whereby relief is allowed against Irish tax payable for tax paid on the same income in another jurisdiction.
- Trans-border Relief, which may apply where an individual who is resident in Ireland and commutes daily/weekly to his/her place of work abroad and who pays tax in the other country on the income from that employment.
- Top Slicing Relief, which was a relief granted in respect of the tax payable on a lump sum payment on redundancy or retirement (abolished with effect from 2014).
- Medical Insurance Credit
Double taxation relief and trans-border relief are also likely to be a major factor in the calculation of the net liability in Ireland for the cases outlined in the table above. Therefore, while it appears that these individuals have a low effective income tax rate income tax in Ireland, it is likely that they are also paying income tax in other jurisdictions.
Furthermore, the Deputy will be aware that in view of the difficult circumstances and fluctuating incomes that taxpayers can experience, successive Governments have provided for marginal rated tax relief for, inter alia, nursing home fees and personal pension contributions. The limits for tax relief on the latter increase in line with the age of the individual concerned, in recognition of the possibility that the individual may not have had the requisite income to make sufficient contributions in earlier years. The claiming of such reliefs acts to reduce the effective income tax rate paid by those individuals. In this regard it is worth pointing out that not all tax reliefs are 'specified reliefs' for the purposes of the high earners restriction.
Information provided by the Revenue Commissioners in respect of taxes paid, is non-specific in nature and therefore it would not be appropriate to seek definitive details in relation to the specific reliefs claimed by the relevant individuals.
"Taxable Income" is that part of income on which tax is actually calculated. It is thus the total income of taxpayers less personal reliefs and other deductions but prior to the application of tax credits and reliefs at the standard rate, which are given by way of a reduction of tax chargeable.