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Wednesday 29 November 2023 Dublin: 2°C
high worth individuals

New report shows that 83 of Ireland's wealthiest people pay lower rate of income tax than average worker

The Chairman of the Public Accounts Committee said people would be “shocked” by the report.

NEARLY 90 OF Ireland’s wealthiest people pay income tax at a lower rate than those on the average industrial wage.

A new report from the Comptroller and Auditor General has revealed that 83 ‘High Worth Individuals’ (HWIs) used tax credits and reliefs to declare a taxable income below that of the average worker.

The report examined how the Revenue taxed Ireland’s 334 HWIs – defined as those worth more than €50 million – in 2015.

Approximately €473m in income tax was paid by the 334 HWIs that year, an average of €1.4m each.

However, 140 HWIs (42% of the total) were found to have a taxable income of less than €125,000, while 83 had taxable income of less than the average industrial wage, which is just over €36,500.

And when the nine highest taxpayers – described as “outliers” – were not accounted for, the average of income tax paid by the HWIs was €230,750.

Meanwhile, ten of these individuals claimed tax relief for maintenance, significant buildings and gardens relief, venture capital relief and trans-border relief, which gave them in benefits which averaged €167,000 each.

The report also found that Ireland’s definition of a HWI is high compared with other countries.

While criteria vary from country to country, HWIs are generally considered to have assets of between $1 million and $50 million, while ultra-High Worth Individuals have assets of over $50 million

However, the Revenue defines HWIs as those with assets of more than €50m.

By comparison, HWIs in the UK are classed as those worth more than €23m, while HWIs in Spain are worth more than €10m. 

In the report, the Comptroller and Auditor General called for the threshold to be reviewed to assess whether Ireland’s assessment of a HWI is appropriate.

Commenting on the report yesterday, the Chairman of the Public Accounts Committee Sean Fleming questioned why 140 of Ireland’s richest taxpayers paid less than the average industrial wage.

“There are 480 individuals in this category, and unbelievably 120 of these have declared taxable income below the average industrial wage,” he said.

“Another 201 of this group report taxable income of below €125,000. Most people will be shocked to hear this.”

Meanwhile, the report also found that the average income tax bill paid by all taxpayers in the State is €5,985.

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