MORE than €312m was netted by some of the country's biggest earners by taking advantage of tax breaks, new details from the Revenue Commissioners reveal.
According to the figures, the tax breaks were claimed by 423 people who earn at least €250,000 a year. The average claim was for just over €737,000, though it is likely that those on much higher incomes received more. The figures are for 2008 as the annual tax returns for high earners in 2009 have yet to be scrutinised.
Thirty-two artists, writers and composers benefited to the tune of nearly €21m, the Revenue Commissioners data shows. No names were disclosed by the Revenue, but it is understood the individuals involved are all household names. Many artists pay no tax at all because of their low incomes.
The biggest claim, by both value and volume, was for relief on the capital writedown of hotels and holiday camps, with 148 people claiming €58.4m, or nearly €400,000 each.
The majority of the 54 exemptions and most of the biggest claims were for property-related reliefs. The government-appointed experts into the causes of the banking crisis, Klaus Regling and Max Watson, said the widespread use of reliefs contributed to the property bubble.
Some €35m in relief was claimed for the payment of dividends from exempt patent income. About €15m was claimed for relief on interest payments on loans used to acquire shares in companies, while a further 13 high-income earners claimed €4.5m in relief for "investment in significant buildings and gardens".
Some of the breaks cost the state relatively little in tax forgone. Exempt stallion income relief was claimed by four people and cost just €673,690 and tax breaks for investing in multi-storey car parks cost the state €807,605.
In 2006, the government moved to limit the amount wealthy individuals could claim by using the various relief schemes to reduce their tax bill. The changes in successive Finance Acts meant that those on the highest incomes would pay tax at a rate of at least 20%.
According to the Revenue's analysis of high-income earners, the effective tax rate for 234 people earning between €250,000 and €500,000 a year was 13.8%. By restricting the reliefs these people could claim the state received an extra €6.5m in tax from them.
For the 189 individuals paid over €500,000 the effective tax rate was 19.8% and the tax netted by limiting their relief claims amounted to €33m. Most of those earning more than €500,000 paid tax at a rate between 15% and 20%.
Before restricting the use of relief schemes, the effective tax rate for all those earning more than €250,000 was just under 8%. In 2008 there were 38 people with an income between €1m and €1.5m, 11 with an income of €1.5m and €2m and 23 people who earned in excess of €2m. The extra tax netted by limiting the amount wealthy individuals could claim in 2008 was roughly the same as in 2007.