RES 1

A guide to Irish income tax and capital gains tax liability based on some commonly asked questions by –

  1. individuals going to work and/or live abroad; or
  2. individuals coming to work and/or live in the State.

Introduction

The purpose of this leaflet is to answer some tax questions commonly asked by -

  1. Individuals going to work and/or live abroad; and
  2. Individuals coming to work and/or live in the State.

It deals mainly with the tax treatment of income from employment and self-employment and with capital gains.

The information in this leaflet relates to the tax year 2010 and following tax years. (Different outcomes may arise for previous tax years under the tax legislation in force for those previous tax years).

In general, matters such as -

  • an individual's residence and/or ordinary residence position for tax purposes;
  • location of the source of income; and/or
  • where the duties of a trade, profession or employment are exercised,

are likely to have a bearing on the extent of an individual’s liability to Irish income tax.

Section 1 will help you to determine whether you are resident or non-resident for Irish tax purposes in any particular tax year.

Section 2 outlines some questions that an Irish resident individual going abroad to work on a temporary basis might have.

Section 3 outlines some questions that an individual going to work or live abroad on a long term or permanent basis might have.

Section 4 outlines some questions commonly asked by individuals coming to live in Ireland for the first time or by Irish citizens returning to live in Ireland having been abroad for a number of years.

The terms of a double taxation agreement may affect the taxation of certain income or affect an individual’s liability to tax. A list of countries with which Ireland has concluded such agreements is contained in Double Taxation Agreements entered into by Ireland.

Additional information leaflets and guides, and those mentioned in this leaflet, are available on Revenue's website, from Revenue's Forms and Leaflets Service by phoning LoCall 1890 306 706 or from any Revenue office.

If you require further information contact any Revenue office.

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Section 1 - Broad outline of matters that affect the taxation of your income and capital gains

What is a tax year?

The tax system in Ireland operates on a calendar year basis of assessment. In other words, the tax year runs from 1 January to the following 31 December.

How is Irish income tax calculated?

Your Irish income tax liability is calculated by applying the appropriate tax rates set by Government to your taxable income for a particular tax year.

Your tax liability may be reduced by what are known as 'tax credits'.

Please refer to Leaflet lT1 - Tax Credits, Reliefs & Rates for the current tax credits, reliefs and tax rates.

How is income tax paid?

Employment Income

In general, tax is deducted from your salary through what is known as the Pay As You Earn (PAYE) system under which your employer deducts the tax due when making payments to you (see Leaflet IT 11 - Employee's Guide to PAYE).

Other Income

You are responsible for paying the tax through the self-assessment "Pay and File" system See IT 10 - A Guide to Self Assessment.

How is capital gains tax paid?

Capital Gains Tax (CGT) is chargeable on gains arising on the disposal of assets, other than that part of a gain which arose in the period before 6 April 1974. Any form of property (other than Irish currency) including an interest in property (as, for example, a lease) is an asset for CGT purposes.

Note: The tax due on chargeable gains is payable through self-assessment. Regardless of whether you are registered for tax purposes, you must calculate and pay your tax and file a return of gains and losses.

Further information on Capital Gains Tax can be obtained in Revenue’s publication pdfLeaflet CGT 1 - Guide to Capital Gains Tax (PDF, 471KB).

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What is "Residence"?

An individual’s residence status for Irish tax purposes is determined by the number of days he or she is present in Ireland during a tax year.

A day for residence purposes

An individual is present for a 'day' for residence purposes if he or she is present in the State at any time during a day. In practice, Revenue apply the following treatment:

Individuals in transit

An individual will not be regarded as being present in the State for any period during which he or she arrives in, and departs from, the State and throughout which he or she remains "airside" - that is, remains throughout the period in the State in a part of an airport or port not accessible to members of the public (unless, of course, such members of the public are arriving in, or departing from, the State).

'Force majeure' circumstances

Where an individual is prevented from leaving the State on his or her intended day of departure because of extraordinary natural occurrences or an exceptional third party failure or action - none of which could reasonably have been foreseen and avoided - the individual will not be regarded as being present in the State for tax residence purposes for the day after the intended day of departure provided the individual is unavoidably present in the State on that day due only to 'force majeure' circumstances.

Example of extraordinary natural occurrences: sudden and severe adverse weather conditions.

Example of exceptional third party failure or action: the breakdown of an aircraft or a labour strike.

Tests of residence

Test 1

The first tax residence test is that an individual is regarded as resident in the State for tax purposes for any tax year in which he or she spends 183 days or more in the State.

Test 2

Where the time spent in the State in a tax year is less than 183 days, then the second test comes into play. The second tax residence test is the 280 days two-year test and involves taking account of an individual’s presence in the State, not alone in one tax year, but also in the preceding tax year. Under this test an individual is regarded as tax resident in the State for tax purposes for any year in which he or she spends a total of 280 days or more in the State in the tax year and in the immediately preceding tax year. However, this test will not apply in any year that an individual is present in the State for not more than 30 days.

 

Example 1

Tax Year 1 Tax Year 2 Tax Year 3
No. days in the State Tax resident No. days in the State Tax resident No. days in the State Tax resident
190 Yes (under Test 1) 200 Yes (under Test 1) 91 Yes (under Test 2)

Example 2

Tax Year 1 Tax Year 2 Tax Year 3
No. days in the State Tax resident No. days in the State Tax resident No. days in the State Tax resident
180 No (under Test 1) 105 Yes (under Test 2 91 No (less than 183 days and less than 280 taking Year 2 with Year 3)

Example 3

Tax Year 1 Tax Year 2 Tax Year 3
No. days in the State Tax resident No. days in the State Tax resident No. days in the State Tax resident
190 Yes (under Test 1) 260 Yes (under Test 1) 25 No (as in the State for less than 30 days)

In both of the above tests, it does not matter if you come and go several times during the tax year or if you are here continuously. A count is made of the total number of days in which you are present in the State in each tax year.

Option to elect to be tax resident in the State for a tax year

An individual who comes to live or work in the State, and who would not be tax resident for the year of arrival under the normal tests, may elect to be tax resident for the year of arrival.

One reason for electing to be resident is to avail of full personal tax credits (see Leaflet IT1 - Tax Credits, Reliefs & Rates for a list of available tax credits and reliefs).

A condition of making an election is that you must establish to the satisfaction of an authorised officer of the Revenue Commissioners that you will be resident here in the following tax year under any one of the tests mentioned above. Once such an election is made it cannot subsequently be cancelled.

An election may be made in writing to your local Revenue office.

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If I purchase a property in Ireland will I be treated as "resident" in Ireland for tax purposes?

The ownership of a property in Ireland will not make you resident for Irish tax purposes – residence for tax purposes is determined by the Tests outlined in What is "Residence"?.

Note: It is possible that an individual with ties to more than one jurisdiction may, under the domestic tax legislation of the jurisdictions concerned, be treated as tax resident in more than one jurisdiction for the same tax year. In such circumstances, the 'Tie-Break Rule' contained in double taxation agreements between this State and other countries may apply to determine in which of the two countries the individual is considered to be tax resident for the purposes of interpreting the relieving and other provisions of the Double Taxation Agreement (DTA). Under such tie-break rules, matters such as where the individual has a permanent home or habitual abode may be relevant.

What is "Ordinary Residence"?

The term ordinary residence refers to an individual’s pattern of residence over a number of tax years. If you have been resident in the State for three consecutive tax years, you are regarded as ordinarily resident from the beginning of the fourth tax year. Conversely, you will cease to be ordinarily resident in the State having been non-resident for three consecutive tax years. A person can be non-resident for a tax year but still be ordinarily resident for that year if the absence is temporary.

What is "Domicile"?

Domicile is a concept of general law. It may, broadly speaking, be interpreted as meaning residence in a particular country with the intention of residing permanently in that country. Every individual acquires a domicile of origin at birth, usually that of his/her father. A domicile of origin will remain with an individual until such time as a new domicile of choice is acquired. However, before that domicile of origin can be shed there has to be clear evidence that the individual has demonstrated a positive intention of permanent residence in the new country and has abandoned the idea of ever returning to live in the "domicile of origin" country. For example, an individual with an Irish domicile of origin who lives abroad for a number of years and then returns to Ireland would not be regarded as ever having abandoned his/her Irish domicile of origin. An individual’s domicile status affects the extent to which foreign sourced income is taxable in the State (see How do the concepts of residence, ordinary residence and domicile affect my tax treatment?).

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How do the concepts of residence, ordinary residence and domicile affect my tax treatment?

Tax Resident Individuals

An individual who is tax resident in the State for a tax year is liable to Irish tax on his or her worldwide income and gains for that tax year. Where appropriate, a credit against Irish tax may be due under the terms of a double taxation agreement in respect of foreign tax paid on foreign source income and gains that are assessable here.

Non-domiciled individuals and the remittance basis of assessment

The remittance basis of assessment applies to foreign sourced income and foreign capital gains of an individual who although tax resident in the State for a tax year is not Irish domiciled for that tax year. Under the remittance basis of assessment, the non-Irish income and gains are taxable only to the extent that they are remitted to the State.

However, the remittance basis of assessment does not apply to the income of a non-Irish sourced employment attributable to the performance in the State of the duties of that employment.

Note: Non-domiciled individuals resident in the State for tax purposes may be entitled to a measure of relief in respect of their foreign employment income that has been subject to Irish tax under what is known as the Pay As You Earn (PAYE) system. This relief applies in respect of such income in excess of €100,000. Further details may be obtained from Revenue offices.

Non-resident individuals

Individual who is non-resident but is ordinarily resident in the State for the tax year in respect of which tax liability is to be calculated

Such an individual is, for that tax year –

  1. treated in the same way as an individual who is tax resident (see Tax Resident Individuals above); but
  2. will not be taxable on -
    1. the income derived from a trade or profession no part of which is carried on in the State;
    2. the income derived from a non-public office or a non-public employment all of the duties (except incidental duties) of which are performed outside the State (but see Non-resident directors of Irish incorporated companies below re Irish public offices);
    3. other foreign income (e.g. investment income) which, in the tax year, does not exceed €3,810.

Where such an individual has income chargeable to Irish tax, he / she may be entitled to any reliefs (including credit for foreign tax paid) that may be due under the terms of a double taxation agreement.

A non-resident individual is taxable on specified gains only - see Individual who is non-resident, non-ordinarily resident and not domiciled in the State for the tax year in respect of which tax liability is to be calculated below.

Individual who is non-resident, non-ordinarily resident but is domiciled in the State for the tax year in respect of which tax liability is to be calculated

Such an individual is, for that tax year, taxable in the State on all his or her -

  1. Irish source income including the income from an Irish public office (see Non-resident directors of Irish incorporated companies);
  2. the income derived from any trade, profession or employment exercised in the State; and
  3. Irish source gains.

Where such an individual has income or gains subject to Irish tax, he/she may be entitled to any reliefs (including credit for foreign tax paid) that may be due under the terms of a double taxation agreement.

Individual who is non-resident, non-ordinarily resident and not domiciled in the State for the tax year in respect of which tax liability is to be calculated.

Such an individual is, for that tax year, taxable in the State on all his or her -

  1. Irish source income including the income from an Irish public office (see Non-resident directors of Irish incorporated companies);
  2. the income derived from any trade, profession or employment exercised in the State; and
  3. gains on Irish specified assets only (land, buildings and minerals in the State; exploration rights in designated areas; unquoted shares deriving the greater part of their value from the aforementioned assets; assets of a trade carried on in the State).

Where such an individual has income or gains subject to Irish tax, he/she may be entitled to any reliefs (including credit for foreign tax paid) that may be due under the terms of a double taxation agreement.

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Non-resident directors of Irish incorporated companies

A director of an Irish incorporated company holds an Irish Public Office and is chargeable to tax in this State on the income attributable to such directorship irrespective of -

  1. his/her tax residence position; or
  2. where the duties of the office of director are exercised.

However, such directorship income may, in some instances, be relieved from the charge to Irish tax under the terms of a double taxation agreement between the State and the country of residence of the director.

(See Double Taxation Agreements entered into by Ireland for a list of countries with which Ireland has Double Taxation Agreements.)

Income tax: allowances, reliefs and tax credits

Under the Irish income tax system, resident individuals are entitled to what are known as allowances or 'tax credits' that serve to reduce their income tax liabilities (see Leaflet IT1 - Tax Credits, Reliefs & Rates for details).

Non-resident individuals are, in general, entitled to a proportion of allowances and tax credits with such proportion being the fraction -

Allowances / Tax Credits X Income within the charge to Irish tax / Total worldwide income.

Non-resident individuals resident in an EU Member State whose income within the charge to Irish tax is 75% or greater of their total worldwide income may be entitled to the full amount of allowances and tax credits.

Capital gains tax

In calculating a chargeable gain on the disposal of an asset, the following may be deducted from the sale proceeds -

  • the amount paid for the asset, including the incidental costs of acquisition,
  • any expenditure incurred in enhancing the asset, but not including repairs and maintenance,
  • the incidental costs of disposal.

There may also be an adjustment factor applied to these costs, where incurred up to year 2002, to take account of inflation.

The first €1,270 of chargeable gain is exempt in any one year.

Acquisitions and disposals made other than by way of a bargain at arm’s length, are deemed to be at market value.

A gain arising to an individual on the disposal of a principal private residence is relieved from capital gains tax. This relief is based upon the length of time the house was occupied as a residence, as a proportion of the total period of ownership.

An individual who is working abroad is deemed to occupy his/her principal private residence during the absence, if there is a resumption of occupancy on return, and no other residence was owned.

Taxation of married couples

Under the Irish tax system -

  1. where only one spouse is resident in the State, that spouse is treated for tax purposes as if unmarried;
  2. where both spouses are resident here for tax purposes, the couple may elect to be taxed as single individuals or under what is known as “joint assessment” (also known as "aggregation") under which one spouse is assessable on the income of both spouses.

Whether taxable as single individuals or under joint assessment has a bearing on the extent of the allowances and tax credits due (see Leaflet IT2 - Taxation of Married Persons and Civil Partners.

Note: As regards (a), in cases where Revenue are satisfied that the non-resident spouse has no income, the couple may be afforded the benefits of being taxed as a married couple.

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Double Taxation

Overview

In some cases, part of an individual’s income and gains taxable in the State may also be subject to tax in another country. This is known as "double taxation" which is the term used when a source of income is chargeable to tax in more than one country. Relief from this double tax charge is known as "double taxation relief" and is generally available under a Double Taxation Agreement.

What is a Double Taxation Agreement?

A double taxation agreement is an international treaty concluded between the Government of Ireland and the government of another country or territory in order to prevent income and gains being doubly taxed.

Ireland has concluded a number of Double Taxation Agreements with other countries. See Double Taxation Agreements entered into by Ireland for a list of those countries.

How does a Double Taxation Agreement prevent my income or gains being doubly taxed?

If your income or gains is chargeable to tax in the State and in a country with which the State has a Double Taxation Agreement, a double charge to tax is prevented under the agreement. This is generally provided by either -

  • crediting the foreign tax paid against your Irish tax liability on that same income or gains or,
  • in certain circumstances, by exempting that income or gains from tax in either the State or the other country.

The precise treatment of your income or gains will depend on the provisions of the agreement, the nature and source of your income or gains and, in some cases, your nationality/citizenship.

What if my income or gains which is liable to Irish tax arises in a country with which Ireland does not have a Double Taxation Agreement?

The amount of income or gains chargeable to tax in the State is the net amount received by you after deduction of the foreign tax paid. There is no credit available for foreign tax paid against your Irish tax liability on the same income or gains.

Can I reclaim, from Revenue, foreign tax deducted from my income or gains?

No, Revenue will only refund tax deducted in the State. A refund of foreign tax should be claimed directly from the revenue authorities in the country it was paid. Please note also that any foreign tax that has been refunded cannot be claimed as a credit against an Irish tax liability.

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Section 2 - Going to work abroad temporarily and remaining resident for Irish tax purposes

I am going to work abroad but will remain resident for Irish tax purposes. How will my employment income be treated?

For any tax year that you are tax resident in the State, you will be liable to Irish income tax on your total income from all sources including any income from a foreign employment.

Will I be entitled to full tax credits?

As you are resident in the State for tax purposes, you will be entitled to full tax credits as set out in Revenue's explanatory Leaflet IT 1 - Tax Credits, Reliefs & Rates for 2013 and 2014.

What happens if my income is also taxable abroad?

If tax is also charged in a country with which Ireland has a Double Taxation Agreement, you will be given relief as specified in the relevant agreement. This is generally provided by either:

  • crediting the foreign tax paid against your Irish tax liability on that same income; or,
  • in certain circumstances, by exempting that income from tax in Ireland or the other country.

If you are going to a country with which Ireland does not have a Double Taxation Agreement, you will be liable to Irish tax on your foreign income net of foreign tax paid. (See Double Taxation Agreements entered into by Ireland for a list of countries with which Ireland has Double Taxation Agreements.)

Am I entitled to any additional allowances/reliefs as an Irish resident working abroad?

For any tax year that you are resident in the State, you may be entitled to one of the following additional income tax reliefs:

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What is Transborder Relief?

Transborder relief is designed to give income tax relief to individuals who are resident for tax purposes in the State but who commute daily or weekly to their place of work abroad and who pay tax in the other country on the income from that employment.

Subject to meeting certain conditions, an Irish resident individual may have his/her Irish income tax liability for a particular tax year reduced to what is known as the specified amount. The effect of this relieving measure is that Irish tax will only arise where the individual has other income separate to the income from the foreign employment ("qualifying employment") and will ensure that he/she will not pay additional tax on employment income which has been taxed abroad. The relief is available as an alternative to the Seafarer Allowance (see What is Seafarer Allowance? ).

As the income from the foreign employment remains assessable to Irish tax, transborder relief can be claimed by way of refund at the end of the tax year when the individual submits his or her annual Return of Income. Evidence of foreign tax paid should be submitted with the claim.

What is Seafarer Allowance?

Subject to certain conditions being fulfilled, the seafarer allowance is an amount that an individual can deduct from his/her seafaring earnings when calculating his/her taxable income. The amount of the deduction is currently €6,350 and is available as an alternative to Transborder Relief (see What is Transborder Relief?). It cannot be set against any other income of the individual or against the income of his or her spouse. It is additional to the normal allowances outlined in Leaflet IT 1 - Tax Credits, Reliefs & Rates for 2013 and 2014. It does not apply to public sector employees.

Seafarer allowance can be claimed by way of refund at the end of the tax year when the individual submits his or her annual Return of Income. The claim for the allowance should include a statement from the employer giving details of the voyage(s) and the number of days, with dates, of absence from the State.

Do special provisions apply to researchers or lecturers going to certain tax treaty countries?

Some of our Double Taxation Agreements provide that remuneration paid to certain researchers or lecturers working or studying abroad at a university, research institute, school, college or other similar establishment during a period of temporary residence not exceeding two years, shall remain taxable in the State.

The Double Taxation Agreement between the State and the country in which the university, research institute, school, college or other similar establishment is situated should be consulted. (See Double Taxation Agreements entered into by Ireland for a list of countries with which the State has Double Taxation Agreements).

I’m going abroad temporarily for reasons other than work (e.g. travel, non-paid work) but I will remain resident for Irish tax purposes. How will any Irish source income I may have be treated?

As you are tax resident in the State, you will be liable to Irish income tax on your total income from all sources including, obviously, your Irish source income. However, being tax resident, you will be entitled to full tax credits.

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Section 3 - Going to work abroad on a long term or permanent basis and becoming non-resident for Irish tax purposes

How is the employment income of non-resident individuals treated for Irish tax purposes?

In general, the employment income of a non-resident individual working abroad is not liable to Irish tax. However, such an individual may have a liability to Irish tax on the income attributable to the performance in the State of the duties of that employment.

For more details on the taxation of foreign employment income, see Revenue’s pdfStatement of Practice for 2007 SP-IT/3/07(PDF, 463KB) - Pay As You Earn (PAYE) system: Employee payroll tax deductions in relation to non-Irish employments exercised in the State.

Note: The income arising to a non-resident individual from the holding or exercising of an Irish Governmental position (e.g. income from positions such as those held by civil servants, Gardaí and members of the Defence Forces working abroad) remains chargeable to Irish tax regardless of the tax residence status of the individuals or where the duties of their office or employment are exercised.

I will be working abroad for an Irish employer who will need me to return to Ireland from time to time. How will these return visits affect my tax treatment?

If an insignificant number of days are spent working in the State and are merely incidental to your foreign duties of employment those days will not affect your exemption from Irish tax. Normally, for this purpose, any number of days up to a maximum of 30 in a tax year will be regarded as insignificant.

I am being posted to work abroad by my Irish employer. How will my employment income be treated for tax purposes in the year that I leave?

If you are resident during the tax year you leave and non-resident for the following tax year, you will, as regards the taxation of employment income, be deemed to be non-resident from the date of your departure. This means that your employment income will be exempt from Irish tax from that date.

In order to avail of this arrangement, known as split year treatment, it is necessary that you satisfy your Local Revenue office of your intention not to be resident in the State for the tax year following your departure. In this regard, a statement from your employer or a copy of your contract of employment indicating the length of time you intend to spend working abroad should be submitted in support of your claim.

Revenue may then issue what is known as a PAYE Exclusion Order to your employer authorising him/her not to deduct tax from your salary. An Exclusion Order will operate from the date of your departure and will be effective for as long as you remain non-resident and the duties of your employment continue to be exercised abroad. Although you will be deemed non-resident from the date of your departure, you are nevertheless due full personal tax credits for the complete tax year. In those circumstances, you may be entitled to a tax adjustment, taking into account the unused portion of your tax credits (see question I am going abroad and have not used up my full tax credits for the tax year in which I leave. How do I claim a refund of tax paid?).

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Can my employer continue to deduct PRSI from my salary if an Exclusion Order is put in place?

Once authorised not to deduct tax under the PAYE system your employer will no longer be able to deduct PRSI. You may, nevertheless, continue to be insurable in the State. In such cases, it will be necessary for you to pay PRSI directly to the Department of Social Protection. For clarification as to whether PRSI contributions are due and instructions on the remittance of any amounts due, employers can contact:

Special Collection Section,
Department of Social Protection,
Government Buildings,
Cork Road,
Waterford.

Telephone: 051 356000

(+353 51 356000 if calling from outside the Republic of Ireland)

Where a PAYE Exclusion Order has issued to an employer relieving the employer of the obligation to make tax deductions from certain emoluments, the employer need not deduct the Health Contribution.

I am going abroad and have not used up my full tax credits for the tax year in which I leave. How do I claim a refund of tax paid?

You can claim a refund of tax paid by supplying the following details to your local Revenue office:

  • a completed pdfForm P50 - First Claim for Repayment During Unemployment (PDF, 289KB);
  • Form P45 if you are leaving your existing employment - available from your employer;
  • a completed Return of (PAYE) Income pdfForm 12 (PDF, 450KB) or pdfForm 11 (PDF, 454KB) and
  • a statement to the effect that you are going to live abroad permanently or in such circumstances that you will not be resident in the State for at least the following tax year.

How will sources of foreign income other than employment income be treated when I am non-resident?

For any tax year during which you are non-resident but remain ordinarily resident (see What is "Ordinary Residence"? ) your foreign sourced income (excluding income from an employment, a trade or profession, the duties of which are not exercised in the State) will remain chargeable to Irish tax unless such income does not exceed €3,810 for that tax year. If the income exceeds €3,810 the total amount (not just the excess over €3,810) becomes taxable. However, the provisions of a Double Taxation Agreement between the State and the country in which you are resident may affect the taxation of such income.

You remain chargeable on your worldwide gains so long as you are ordinarily resident (see What is "Ordinary Residence"?).

I intend to let my home while I am abroad. Will I have a liability to Irish tax on the rental income?

Regardless of your residence status, you will have a liability to Irish tax on the rent you receive from letting your home. If you do not appoint an agent to collect your rent while you are non-resident, your tenant is obliged to deduct an amount equal to the standard rate of income tax (currently 20%) from the rent payable to you and remit this amount to Revenue.

For details as to how any income tax due should be paid please contact your local Revenue Office. Please also refer to Revenue leaflet IT70 - A Revenue Guide to Rental Income.

When I come back to live in the State, how will my employment income be treated in the year of my return?

If you are resident in the State for the tax year during which you return to the State, and you intend to be resident for the following tax year, employment income earned before the date of your return will not be taxable. This arrangement is known as split year treatment.

As a resident for the tax year of your return to the State, you will be entitled to personal tax credits for the full tax year.

You will be regarded as being resident in the State for a tax year if you satisfy either of the residence tests outlined at What is "Residence"?. Should you not satisfy either of these tests you can, if you wish, elect to be resident for the tax year of your return. A condition of making an election is that you must establish to the satisfaction of your local Revenue office that you will be resident here for the following tax year under either of the tests outlined at What is "Residence"?. Once an election is made, it cannot subsequently be cancelled.

If you are non-resident in the year of your return, you will be taxable on earnings from an employment, the duties of which are exercised in the State. As a non-resident, you may be entitled to a proportion of tax credits and reliefs. This proportion is determined by the relationship between your income for the tax year which is subject to Irish tax and your income from all sources (in other words, Irish income divided by all income).

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Whilst I was non-resident for tax purposes, I saved some of my foreign employment earnings attributable to working abroad. How are these savings treated for tax purposes when I return?

If the savings were from employment income earned in a tax year or years when you were non-resident and attributable to duties exercised outside the State, those savings will not be taxable when you bring them home. However, income (e.g. deposit interest) from the investment of those savings that arises in a year in which you are resident or ordinarily resident may be taxable in the State.

Can I reclaim, from the Irish Revenue Commissioners, foreign tax deducted from my income or gains?

No. Revenue may only refund Irish tax deducted. A refund of foreign tax - if such is due - should be claimed directly from the revenue authorities in the relevant country. Please note also that any foreign tax that has been refunded cannot be claimed as a credit against an Irish tax liability.

I am retired and am in receipt of a 'Private Sector' Irish occupational pension. I am going to live abroad. How will my pension be treated for tax purposes?

Where an individual is in receipt of an occupational pension from an Irish resident employer (other than a Governmental or a Local Authority pension) and the individual is

  • not resident in the State for tax purposes and
  • is resident in a country with which the State has a Double Taxation treaty for the relevant tax year,

generally, the pension will be taxable solely in the country in which the individual is tax resident.

In such cases, an individual may request a PAYE Exclusion Order in respect of such pension. A PAYE Exclusion Order authorises the pension provider not to deduct Irish tax via the PAYE system on a pension.

I have an Approved Retirement Fund (ARF) and I am going to live abroad. How will withdrawals from an ARF and other such funds be treated?

An approved retirement fund or ARF is an investment vehicle held by an individual and managed by a Qualifying Fund Manager (QFM). Where an individual withdraws funds from his/her ARF or other such fund, the withdrawal is subject to tax deduction at source under PAYE regardless of the residence status of the individual.

I am retired and am in receipt of an Irish 'Public Sector' Pension. I am going to live abroad. How will my pension be treated for tax purposes?

A 'public sector' or governmental pension is a pension payable by the State or a Local Authority in connection with the discharge of functions of a governmental nature or in respect of services rendered to the State.

In general, an Irish governmental pension will be taxable solely in the State, irrespective of the residence status of the recipient.

For confirmation that the above treatment applies, or in cases of doubt, you should refer to the Government Service article or Government Pensions article of the appropriate Double Taxation Agreement between the State and the jurisdiction in which you intend to be resident.

Individuals resident in non-treaty countries remain chargeable to income tax in the State.

Note: Irish Social Welfare pensions and foreign Social Security pensions are not regarded as governmental pensions.

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Section 4 - Tax questions commonly asked by individuals coming to live in Ireland for the first time or by Irish citizens returning to live in the State having been abroad for a number of years

What is the tax treatment of income that I have earned prior to moving to Ireland and which I wish to bring with me?

If you are moving to the State for the first time or you are an Irish citizen returning to live in the State having been non-resident and not ordinarily resident when the income was earned (see questions in Section 1 - Broad outline of matters that affect the taxation of your income and capital gains for the meaning of these terms), funds accumulated from income earned before 1 January in the year that you become Irish resident will not be liable to income tax.

Income, other than employment income, earned or arising between 1 January and the date of your arrival are taxable in the State unless the remittance basis of assessment applies (see Tax Resident Individuals) or the income is relieved from Irish tax under the terms of a Double Taxation Agreement.

If I bring the proceeds from the sale of a foreign property into the State, will I be liable to Irish tax?

If the property was disposed of in a tax year during which you were neither resident nor ordinarily resident in the State, there will not be a liability to Irish tax when the proceeds from the sale are brought into the State.

If the property was sold in a tax year during which you were either resident or ordinarily resident for Irish tax purposes there may be a Capital Gains Tax liability. However, if the property was your principal private residence for the full period of ownership the proceeds will be exempt from Capital Gains Tax. The "principal private residence" exemption can be claimed for periods when you occupied the house and for certain other periods, including the last twelve months of ownership.

Further information on Capital Gains Tax can be obtained in Revenue’s publication pdfLeaflet CGT 1 - Guide to Capital Gains Tax (PDF, 471KB).

Further information on foreign property and Irish tax can be found in the leaflet Foreign Property.

I am in receipt of a foreign pension. Will this income be taxable when I become “resident” in Ireland?

For any tax year that you are resident in the State, the general rule is that your foreign pension will be liable to Irish tax unless it is relieved from Irish tax under the provisions of a Double Taxation Agreement. For example, a Double Taxation Agreement may provide that pensions paid in respect of past services of a governmental nature are to be taxed only in the source country and are not to be taxed in the State. Additionally, certain other pensions which would have been exempt from tax in the source country, had you continued to reside there, may also continue to be exempt from Irish tax when you come to live in the State.

For further information please contact your local Revenue office.

I am coming to work in the State and I will continue to be paid from abroad. How will I be treated for Irish income tax purposes?

Unless your income is relieved from Irish tax under the provisions of a Double Taxation Agreement, it will be taxable here from the date of your arrival regardless of your Irish residence status for tax purposes.

Income from a non-Irish sourced employment, attributable to the performance in the State of the duties of that employment, is chargeable to Irish income tax and subject to the Pay As You Earn (PAYE) system of tax deduction at source, whether or not such income is remitted into the State. If you are resident in the State for Irish tax purposes for the tax year that the income is earned, you may be entitled to full personal tax credits and reliefs (see Leaflet IT 1 - Tax Credits, Reliefs & Rates for 2013 and 2014). Income from a foreign employment that is related to duties performed outside the State is also taxable in Ireland but if you are not domiciled in the State, such income is only taxable to the extent it is remitted or brought into the State (see Non-domiciled individuals and the remittance basis of assessment).

Non-domiciled individuals resident in the State for tax purposes may be entitled to a measure of relief in respect of their foreign employment income that has been subject to Irish tax under what is known as the Pay As You Earn (PAYE) system. This relief applies in respect of such income in excess of €100,000. Further details may be obtained from Revenue offices.

For more details on the taxation of foreign employment income, see Revenue’s pdfStatement of Practice 2007 SP-IT/3/07(PDF, 463KB) - Pay As You Earn (PAYE) system: Employee payroll tax deductions in relation to non-Irish employments exercised in the State.

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I am coming to Ireland to take up a temporary employment and will not become "resident" for Irish tax purposes. Which tax credits am I entitled to?

Proportionate credits and reliefs are available to non-resident Irish citizens, and to citizens, subjects or nationals of another Member State of the European Union and to residents or nationals of a country with which the State has a Double Taxation Agreement which provides for such relief. The proportion of allowable tax credits is determined by reference to your income for the tax year that is subject to Irish tax over your income from all sources.

However, residents of another Member State of the European Union are entitled to full personal tax credits and reliefs in respect of any tax year in which 75% or more of their worldwide income is taxable in Ireland.

How are married persons treated when one spouse is non-resident?

See Taxation of married couples.

Revenue Offices and Other Contact Details

Customers can speedily ascertain appropriate Revenue contact details using a Contact Locator. These contact details include E-mail and postal address, telephone and fax number, and the appropriate Revenue office for personal callers. Customers can access these details when they enter their PPS Number or Company Tax Reference Number in the 'Contact Locator' screen.

Dublin Region

South West Region

Border Midlands West Region

East South East Region

Office of Collector General

Revenue On-Line Service

roshelp@revenue.ie

LoCall 1890 201106 or 00 - 353 - 1 - 7023021

Revenue’s Forms & Leaflets Service

Telephone Service (24-hour service)

custform@revenue.ie

LoCall 1890 306706 or 00 - 353 - 1 - 6744050

Social Insurance

Matters relating to social insurance contributions and benefits are a matter for the Department of Social Protection.External link

Self-employment Pay Related Social Insurance (PRSI) Queries

Dept. of Social Protection,
Cork Road,
Waterford.

info@welfare.ie

051 - 35 60 00 or 01 - 70 43 00

Client Identity Services

Dept. of Social Protection,
Gandon House,
Dublin 1.

info@welfare.ie

01 - 70 43 281

Social Insurance

Dept. of Social Protection,
Oisin House,
Pearse St,
Dublin 2.

info@welfare.ie

LoCall 1890 20 23 35 (Leaflet Line) or 00 - 353 - 1 - 70 43 000.

March 2016

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