Revenue eBrief No. 34/11
09 June 2011
Changes to the operation of Relevant Contracts Tax (RCT)
Revenue has published Information Note No. 3 which provides further details on the new RCT scheme and outlines the main benefits for principals and subcontractors.
The new scheme will be subject to a commencement order to be signed by the Minister for Finance but is expected to be introduced on 1st January 2012 . Principal contractors will be able to register contracts on-line in the new scheme from 28th November 2011 ("contract registration"). This will be the only part of the new scheme that will be accessible prior to 1st January 2012.
Mandatory electronic communication
All contacts between principals (or agents acting on their behalf) and Revenue will be through an on-line process. Information Note No. 3 outlines the various options for interacting with Revenue. As the new scheme will be paperless, the administration burden on principals will be reduced. Principals will need to ensure they are registered for the Revenue On-Line Service (ROS) before the new scheme is introduced.
As outlined in eBrief No. 32/2011 , in keeping with Revenue's commitment to reducing the regulatory burden on business, we do not propose to place a burden on Phase 3 Mandatory eFiling taxpayers to develop the capability to electronically file the annual RCT 35 return form for the reporting period 2011. Revenue will accept all RCT 35 returns on paper for periods up to 31/12/2011 from any principal contractor who has been informed that they are mandated to file returns and make payments electronically to us. We would of course, prefer if the return was made electronically using ROS.
In the new scheme, the standard RCT rate will be 20% (currently 35%). While it is expected that most subcontractors will qualify for either the 0% or 20% RCT rate, in certain limited cases subcontractors will be placed at 35% e.g. subcontractors who are not registered with Revenue or where there are serious compliance issues that need to be addressed. However, once these subcontractors register with Revenue and/or satisfactorily address their compliance issues, they can request a review of their RCT rate (via ROS or by contacting their Revenue District). The criteria for qualifying for the 0% or 20% rates are outlined in the legislation.
Questions/comments on the new scheme
A special email address has been set up to encourage stakeholders to send Revenue their comments and questions on the new scheme ( eRCTInfo@revenue.ie ). Although it will not be possible to reply to individual questions, we will provide answers to the main questions being raised by stakeholders in the frequently asked questions (FAQs) which will be published on our website.
Further information on the new scheme can also be accessed at: