Specified Person (SP)

Do you provide services?

• In the construction sector, currently subject to RCT or in the forestry or meat processing sectors, currently subject to RCT.
• To accountable persons, currently subject to PSWT.
• Via an online platform, where the service is facilitated via the platform and the payment is routed from the recipient by the platform operator to the service provider.

If yes, you will become a SP for eWHT.

What does providing services mean?

You are providing a service where you perform an activity for another party and deliver desired outcomes for that customer. You may provide services on a time or task basis at the request of the customer. Examples for eWHT include:

• carrying out RCT construction operations
• carrying out professional services that come within PSWT
• food delivery services for a platform operator
• providing accommodation for short-term letting via a platform.

What does that mean?

• You will have tax deducted at source from your payments from a Designated Withholder (DW).
• eWHT will apply whether you operate as an individual, partnership, company or a non-corporate entity.

How will this work?

• When you are due a payment from your DW, they will send information about you and the payment to Revenue.
• Revenue will respond with a rate of deduction to be applied by the DW to your payment.
• You will receive your payment net of tax calculated at this rate.
• If you operate as an individual worker your rate will be a Personalised Deduction Rate (PDR).
• If you operate as a corporate, partnership or other entity, your rate will be a flat rate deduction.
• The amount withheld from your payment will be sent to Revenue. This will be a pre-payment of your preliminary tax liability.
• It is intended that communications between Revenue and the DW will be done via an Application Programming Interface (API). This is a real-time data exchange between Revenue systems and the DWs IT system.
• You will have increased transparency of your real time tax position in ROS.

I operate as a sole trader, an individual worker – What is a PDR?

• PDR will apply to self-employed individuals only. It will not apply to corporate or other non-corporate entities.
• PDR will be a personalised tax deduction rate unique to you and your circumstances.
• It is intended that it will be calculated using several factors such as:
  • your rate band
  • your tax credits
  • your eWHT income
  • your non-eWHT income
  • your business expenses.
• The PDR will ensure that the tax withheld from each payment is more reflective of the actual tax liability due on that payment. This is similar in nature to how PAYE is applied to employment income.
• Income from PAYE employments and rate band and credits assigned to PAYE will not become part of the PDR calculation.
• PDR will only be used in relation to eWHT payments.
• We will provide you with information on the calculation of your PDR via ROS.

How can I improve the accuracy of my PDR?

• As a sole trader, you are entitled to a tax deduction for business expenses. This means expenses are deducted from your gross income to calculate your taxable income.
• The accuracy of your PDR will be impacted by several factors. These include the amount, if any, of other income you receive, and the business expenses you incur.
• Revenue intends to enable you to report other income and business expenses in real time. Availing of this option will improve the accuracy of your PDR. The tax withheld will be closer to the right amount of tax due on that payment.
• PDR will only be used in relation to eWHT payments.
• It is intended that PDR will bring your tax closer to real time, like PAYE employees enjoy.