There is a massive tax loophole you should be aware of.
A taxation change brought in by the Finance Act 2022 removed a benefit in kind charge on employer contributions to a pension pot for an employee.
The Revenue Commissioners have expressed their concern about the change and the consequent loophole.
The effect of the change is that company directors can put more than €2 million into a pension in a single year without paying any tax on it. The payment can also be used to reduce the company’s corporation tax bill.
Before the change if contributions by an employer to a PRSA (Personal Retirement Savings Account) exceeded a certain level-between 15% and 40% of net relevant earnings-the amount above the threshold was treated as a taxable benefit in kind.
The Finance Act 2022 removed this charge with a view to encouraging the use of pensions.
Revenue have contacted the Department of Finance about the change, and it is being monitored.
For now, however, the loophole is there is you are fortunate enough to be able to take advantage of it.