How does RCT work for a principal contractor?
On 13 December 2011, the Minister for Finance signed the Commencement Order for the new electronic RCT system which was introduced on 1 January 2012. All principal contractors in the construction, forestry and meat processing sectors are obliged to engage electronically with Revenue and should:
- Notify Revenue of all contracts online (Contract Notification)
- Notify payments online (Payment Notification)
- Provide a copy or details of the Deduction Authorisation to the Subcontractor
- Submit monthly/quarterly returns online (Deduction Summary / Return)
- Make payments of RCT deducted
- Relevant Contracts Tax (RCT) Penalties
Electronic RCT System
Guidance Notes for Boards of Management on RCT/VAT (PDF, 496KB)
Accessing and Downloading the Deduction Summary/Return (PDF,130KB) - Revised July 2012
Downloading Contract details from Contract Confirmation messages in ROS inbox (PDF, 42KB)
Update on eRCT Rate Determination June 2012 (PDF, 16KB)
eMail to ROS registered principals and agents 30th May 2012 (PDF, 36KB)
ROS enhancement to allow users to save multiple partially saved RCT Documents (PDF, 35KB)
Revised procedures for Tax Clearance in respect of Public Service Contracts, Grants, Subsidies and similar type payments (Department of Finance Circulars 43/2006 and 44/2006) (PDF, 30KB) - Updated 26th July 2012
Contact details for your Local Revenue District (PDF, 69KB)
Who is a principal contractor
A principal contractor in the construction, forestry and meat processing industry is a person who takes on a subcontractor and who:
- Carries on a business which includes the erection of buildings or the development of land or the manufacture, treatment or extraction of materials for use, whether used or not, in construction operations;
- Carries on a business of meat processing operations in an establishment approved and inspected in accordance with the European Communities (Fresh Meat) Regulations, 1997. Carries on a business of meat processing operations in an establishment approved and inspected in accordance with the European Communities (Fresh Poultry-meat) Regulations, 1996;
- Carries on a business of forestry operations which includes the processing (including cutting and preserving) of wood from thinned or felled trees in sawmills or other like premises or the supply of thinned or felled trees for such processing;
- Is connected with a company which carries on any of the above businesses;
- Is a local authority or a public utility society or a body referred to in subparagraph (i) or (ii) of section 12(2)(a) or section 19 or 45 of the Housing Act 1966;
- Is a Minister of the Government;
- Is a board established by or under Statute or any board or body established by or under royal charter and funded wholly or mainly out of moneys provided by the Oireachtas;
- Carries on any gas, water, electricity, hydraulic power, dock, canal or railway undertaking;
- Is a subcontractor who subcontracts all or part of the contract to a subcontractor.
Determining Employment Status of workers you engage
When you engage a worker to perform relevant operations, you must first determine whether the worker is a subcontractor or an employee.
Determining the correct employment status of a worker
If a contract of employment was incorrectly classified as a relevant contract, the principal contractor will be liable to pay the PAYE and PRSI that should have been deducted together with interest and penalties as appropriate.
Are you aware that...
- As a principal contractor in the construction sector, you will be affected by the introduction of the VAT Reverse Charge on construction services that are subject to RCT.