Irish players tax rebate

Hi guys, can anyone explain to ne exactly how the tax break works for irish players?

Thanks

this is from their Revenue guidance

6. Example before section 480A relief claimed
Direct Income (i.e., match fees) 200,000
Less expenses (60,000)
Indirect Income (i.e., sponsorship) 70,000
Taxable Income 210,000
Tax @ 40% (2015 rate) 84,000
7. Example after section 480A relief claimed
Direct Income (i.e., match fees) 200,000
Less expenses (60,000)
Section 480A relief 200,000 X 40% (80,000)
Indirect Income (i.e., sponsorship) 70,000
Taxable Income 130,000
Tax @ 40% (2015 rate) 52,000
Repay 32,000

it is effectively a 50% bump to after-tax earnings from the best 10 years earnings out of the last 14, provided that retirement takes place while earning in Ireland. Only includes salaries from province and club, not endorsement/sponsorship. in the example above, tax rate drops from 40% to 26%

it means in take home terms that they would need to be earning roughly 100% more in France if taxed at 50% to be on the same take home money.

not just rugby either.

These are:
Athlete Badminton Player
Boxer Cyclist
Footballer Golfer
Jockey Motor Racing Driver
Rugby Player Squash Player
Swimmer Tennis Player
Cricketer

Thanks Quins, what would an Irish International earn per annum?

sin e is the keeper of those secrets.

he reckons gopperth is on an eye watering EUR275k per annum (he is not irish eligible though), Heaslip is on c500-600k Euros, and no-one is sure what Sexton is on.

Fair to assume (imo) that centrally contracted Irish players who also play provincial rugby in Ireland, are on at least 300k euros average. But its all a bit smoke and mirrors tbh

So their rebate is quite significant after ten years then

http://balls.ie/rugby/much-money-sean-obrien-turn-remain-leinster/

reckons he is on 420k eur from leinster. doesnt say whether its topped up by a central contract or not. but the tax break explains why he would have turned down any toulon offer of less than at least 900k euros

yes. when added to the already big spending budget of the irfu on irish-qualified players it explains why none of them will play overseas. but the tax break isnt available to players who dont retire in ireland from the sport, so think that would exclude non-EU foreigners. and there are strict limits on the number of non-IQ players at each province. So it is not pushing up foreign player salaries, but it is definitely making irish players very wealthy, and keeping them at home.

if other taxpayers dont mind, seems a reasonable way to go about keep irish players in ireland.

I think we should copy that system

Doesn't apply to Ulster, though which is one of the reasons we struggle to attract established players from other provinces.

Why not Ulster? Is it because it falls under Northern Ireland?

Yep. Belfast is in the UK so none of that applies. Any player looking to maximise his earnings and/or concerned about his career longevity will avoid coming North. It's easier to get into the Irish team than if you're in France, but the financial differential is exactly the same.

i always wondered whether the eire govt would give a tax rebate to income paid and taxed by UK HMRC.

does that cause any resentment from ulster fans towards other provinces?

No, not amongst 99% of fans. But it is an issue on a practical level and means that we are very much an exporter of Irish talent. Very, very few established professional Irish players come here, but players from here have no issue going South.

that would of course be completely unworkable if the provinces weren't branches of the irfu. still, i'm kinda surprised that teams competing for qualifying spots to the Champs Cup would be happy being on such an uneven financial footing. Maybe that issue will raise its head if Connacht overtook Ulster in the league and looked to threaten to take a Champs Cup spot from Ulster.

We're not delighted about it. But the reality of the situation is that we are in a separate State. There's no-one you can moan to about it. Uneven financial footing is an unavoidable outworking of being part of the UK. It's been that way since professionalism. We just get on with it.

Also, in fairness, Connacht weren't getting as much as the other three provinces until recently. Although a few years before that, we were getting less than Leinster and Munster as well.

and in ireland as a whole, is taxation based on where people live or where people work? presumably you cant commute into belfast to work and pay eire taxes? presumably most stuff is employer PAYE?

quinsforever wrote:and in ireland as a whole, is taxation based on where people live or where people work? presumably you cant commute into belfast to work and pay eire taxes? presumably most stuff is employer PAYE?

Yeah, exactly. I think specifically with sports teams there is a rule in the UK that you are liable for tax in the jurisdiction where you play the games not where your office is. I've seen that come up when it's been suggested Ulster Rugby run things out of a postbox in Donegal

Yeah, Quins - I think it's based on where your place of work is. I remember a lot of chat, involving some contributors properly in the know, when Bowe was coming back from the Ospreys. He's from the part of Ulster that's a part of the South, and we were wondering if there was any way he could find a loophole to benefit from it. There's no way to make that happen, even for those on central contracts.

I'm not too sure if this is clear, but its:

they can claim back 40 per cent on their tax paid in Ireland – their best 10 years from the 15 years pre-retirement – without having to come back, so long as they are in an EEA (European Economic Area) or EFTA (European Free Trade Association) country when they make the claim.

i.e., if they were paying 40% tax, they get back 40% of tax paid to the Irish tax man (not full earnings) and of course they do not get relief on any earnings other than from rugby (such as sponsorship, image rights, etc).

Secondly, they don't have to retire in Ireland, they can claim from any EU country.

quinsforever wrote:sin e is the keeper of those secrets.

he reckons gopperth is on an eye watering EUR275k per annum (he is not irish eligible though), Heaslip is on c500-600k Euros, and no-one is sure what Sexton is on.

Fair to assume (imo) that centrally contracted Irish players who also play provincial rugby in Ireland, are on at least 300k euros average. But its all a bit smoke and mirrors tbh

I think Sexton is 2m euro over 4 years (4 year contracts are very unusual from the IRFU).

There are a few top players who are very well paid (like Heislip, SOB, Sexton) who have signed contracts recently. The rest I'd say are probably basic enough money - 120K for a Heineken Cup play. Luke Fitz was on about 160K per annum when he got injured (and IRFU/Leinster offered him 120K).

Just checked Brian O'Driscoll's company returns. (May last year) his net worth was 3.5m euro.

quinsforever wrote:i always wondered whether the eire govt would give a tax rebate to income paid and taxed by UK HMRC.

does that cause any resentment from ulster fans towards other provinces?

No we hate them just the same.

For sportspeople it tends to be linked to the location of the home ground. If you're contracted to Ulster, that means Ravenhill is deemed to be your primary location of work. I don't think this was set up for rugby, but more general sport (and soccer).

The premise used on the sporting tax rebate is that a professional sportsperson has a short playing career and it is in this window when they earn a disproportionate amount of income compared to regular folk. As a result, if could be seen as unfair on those people to take 52% of their playing career salaries during their 10 years as a professional athlete. Better to take the 40% rebate as a lump sum the year after they retire and have them use that to set themselves up for their post-professional career.

Not sure if I'd agree with it totally (a rebate to a professional athlete vs. more money for front line services, etc.). But it keeps talent in the country. And 60% of those players taxes (after the rebate) is better than 0% of those taxes if the player moves abroad. Also, when the player is in Ireland they are paying indirect taxes, vat, excise, etc. And they provide a quality product on the field which generates gate receipts/tv viewership figures/advertising revenues and there would be associated tax revenue on all those transactions.

hey its totally fair as long as irish taxpayers are happy to keep funding it.

quinsforever wrote:hey its totally fair as long as irish taxpayers are happy to keep funding it.

The taxpayers aren't funding it, the IMF,ECB and goverment bonds are -the taxpayers money is safely in the caman islands or switzerland.

Although the Irish situation is particularly benefical most high earning sportspeople have some form of tax friendly arrangements - for example trust funds, wages paid to a company rather than to the person, payments in kind (housing/car), etc.

Not huge money on offer in Ireland going on this!

The [Kane Douglas] 24-year-old turned down an improved pay deal with the Waratahs to take up a two-year contract, with Leinster, in the region of €140,000 per season [bonuses could see it rise an additional €50k]. It is a 50% bump on his current salary and one Douglas found hard to turn down.

but the central contracts probably double the club only pay for NIQ dudes, no?

irfu's whole setup is aiming for success at national level. they are not going to p1ss away money on foreign journeymen, (unless and until they become IQ)

if i get bored in the next couple of weeks i'll do the numbers. but my guess is that irish XV starters make at least double what yer man kane douglas just signed for.

Quins - I'm seeing you in a whole new light on this thread.

Biltong wrote:I think we should copy that system

Agreed - you need to start coming up with some creative solutions to retain your top talent (although you have have Andries Strauss back for free).

quinsforever wrote:but the central contracts probably double the club only pay for NIQ dudes, no?

irfu's whole setup is aiming for success at national level. they are not going to p1ss away money on foreign journeymen, (unless and until they become IQ)

if i get bored in the next couple of weeks i'll do the numbers. but my guess is that irish XV starters make at least double what yer man kane douglas just signed for.

Kane Douglas has 14 Wallabie caps (and they want him back).

Foreign and Irish players are treated the same. They are all employees of the IRFU (IRFU contribute a certain amount per player regardless of whether they are IQ or not). The Provinces then can top up each players provincial contracts with their own resources.

Kane Douglas is on close to what Luke Fitz was offered (120K per annum) by Leinster.

From what Doug Howlett has said (he is a Corporate Ambassador for Munster), he says that the Provinces try and compete by helping the players to settle well and maybe getting jobs for their wives/girlfriends. For instance, Munster/Limerick suit CJ Stander because his wife is a swimmer and the Irish Swimming High Performance Unit is based in Limerick so she has great access to top class coaching and facilities.

quinsforever wrote:but the central contracts probably double the club only pay for NIQ dudes, no?

irfu's whole setup is aiming for success at national level. they are not going to p1ss away money on foreign journeymen, (unless and until they become IQ)

if i get bored in the next couple of weeks i'll do the numbers. but my guess is that irish XV starters make at least double what yer man kane douglas just signed for.

Sorry quins but I'm guessing there's a typo in there,can you clear that up as I just can't make out exactly what you're asking.