Professional Services Withholding Tax (PSWT)
Information for providers of professional services
If you are providing a professional service to a state or semi-state body, PSWT will be withheld from your fee. You may claim the tax withheld as a credit against your Income Tax (IT) or Corporation Tax (CT) in that tax year. You must include the gross amount of tax that has been withheld in your Form 11 or Form CT1 tax return.
Using PSWT as a credit
You can use PSWT as a credit against the amount of tax you owe for that tax year or accounting period.
You must pay Preliminary Tax to the Collector General by 31 October for that tax year, or the accounting period in question. PSWT cannot be used as payment, or part-payment, of the Preliminary Tax you owe.
Jack estimates that the IT chargeable for 2017 is €40,000.
He had PSWT of €10,000 withheld in 2017. He can use this as a credit against the amount of IT he owes. The amount of IT due for 2017 is €30,000.
The PSWT of €10,000 deducted in 2017 may not be treated as a payment of the Preliminary Tax Jack owes in 2017.
Proof of PSWT deducted
The company you are providing a service to should provide you with a Form F45 when they pay you. This form will confirm the total payment and the amount of PSWT that has been deducted.
To complete Form F45, the company will need:
- your Personal Public Services Number (PPSN) if you are registered as an individual
- your Tax Reference Number, if you are registered as a company
- your partnership’s tax number, if you are a registered partnership.
If their payment to you includes Value Added Tax (VAT) you must also provide your VAT number, if it is different from the numbers above.
If you are non-resident, you must provide the tax reference number that applies in your country of residence.
It may be possible for you to claim an interim refund, providing certain conditions are met. This is when withheld tax is refunded to you before it is credited against your IT or CT.
Your claim will be approved only if you have:
- finalised the profits for the previous tax year
- fully paid the tax due for the previous tax year
- provided the F45 forms to Revenue.
In cases of particular hardship, some of the above conditions may not be applied. Hardship includes situations where:
- the payment is unique and unusual
- there is a unique or unusual reduction in your income
- there is a delay in finalising your tax due through no fault of your own
- the tax paid minus PSWT, is more than your income at the higher rate of tax for that period.
You can also apply for an interim refund if you have recently started your own business.
Where do you claim a refund?
Usually, your claim must be submitted to your Revenue office. You must complete a Form F50, and submit either a Form F45 or Form F43.
If you are a non-resident, and do not pay tax in Ireland, you must complete a Form IC11 and a questionnaire.
If you are a charity, you make your claim to the Charities Section.
How do you claim if you are a partner?
If Form F45 has been issued to the partnership, the partner who is named first in the partnership agreement (the precedent partner) should apportion the PSWT. They must issue a statement to each partner showing each person’s share of the PSWT. Each partner must apply separately for a refund by submitting to their local Revenue office:
- a copy of the F45
- the statement showing their share of the PSWT.
Next: ePSWT implementation on 01 July 2021