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PaperclipPerfector  3d ago (text post)   2130 thread views

Small-Scale Question Sunday for February 9, 2025

Do you have a dumb question that you're kind of embarrassed to ask in the main thread? Is there something you're just not sure about?

This is your opportunity to ask questions. No question too simple or too silly.

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This is funny to read about, given that there's a growing industry of Ireland based ETFs due to its more favorable tax considerations (compared to the US) for non-resident aliens.

Yeah, I think given Ireland's reputation as a low-tax jurisdiction it's often surprising to those abroad to learn how selectively this low-tax regime applies.

Income tax is genuinely super low for low earners, but the technical "higher band" of income tax (42%) kicks in at just €35k, and increases incrementally up to 52% at €70k - ie every euro over that is taxed at 52% for most workers. Most people working in the tech sector are paying quite high income tax in Ireland, and very high (by European standards) tax on financial products and investments. Even though the corporate tax rate is one of the lowest in Europe, that's just to get companies in the door - we are certainly NOT Dubai on like a personal scale, contrary to what some of our peer countries imagine.

Also the weather is shit and there are too many foreigners (25% approx foreign-born), in a sort of Canadian social-anomie sense.

So is that why Ireland's policies just turned it into an offshore tax haven rather than attracted foreign businesses?

Can you suggest some of these Irish ETFs? Would I be charged at the upper tax band if I invested in an Irish ETF, as opposed to an American one?

There's no distinction in taxation of ETFs based on their location for people currently living in Ireland. There ARE distinctions between Irish, UK, EU and global individual shares which I can't recall off-hand - something about reporting cadences though I might well be wrong on that. In practice it has made very little difference for me. There are no specific incentives to hold Irish shares, for example - though there are some "investment schemes" that amount to an incentive for Irish investment in practice. Not an expert and they get kind of complicated

Can you suggest some of these Irish ETFs?

They are called UCITS funds, the best known ones are CSPX and CSNDX, which are S&P500 and Nasdaq funds, respectively, there is also some which replicate the indexes through total return swaps, which have different tax implications.

It's also worth considering that these funds have higher fees and lower liquidity than the typical ones.

Would I be charged at the upper tax band if I invested in an Irish ETF, as opposed to an American one?

My knowledge of Irish tax law is insufficient for me to help you here, sorry. The biggest implication for me (as a non-american, non-irish) is the lack of inheritance tax (which is brutal in the US for non-citizens).

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