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Employment Taxation for Expats in Ireland

Submitted: October 2014

Residence

You will be considered to be tax resident once you have stayed in Ireland for more than 183 days during a calendar year. However you may be considered resident, even though you have spent less than 183 days in the country during the year, if you spent more than 280 days in Ireland during the combination of previous year and the year in question (stays of 30 days or less do not count with regard to this calculation). You will be considered “ordinarily resident” once you have completed three consecutive years as a resident. Ordinary residence ceases to apply after you have completed three consecutive years in which you were not resident in the country.

It is important to be aware of the terms of any tax treaty that exists between Ireland and your home country, as this may well dictate how you are treated with regards to residency and tax. For more details see: Taxation – Tax Treaty Considerations for Expats in Ireland.

As a resident you will be taxable on your worldwide income and gains. If you remain non-resident you will only be taxed on Irish source income.

 

Tax rates

The tax year runs from 1 January to 31 December.

As a resident, your Irish employer will withhold tax from your wages or salary on a monthly basis. They will also deduct social security contributions which are charged at progressive rates up to a maximum of 7%. After the end of the year, your employer will give you a P60 form which shows how much tax they have deducted. These deductions will be set against your overall tax liability when you fill in your tax return. The amount deducted by your employer will be calculated monthly, based on the table below if you are single and have no children.

If you are a non-resident, you will be subject to the tax rate shown in the table below on employment income from Irish sources.  

The following table shows the 2014 progressive tax rates in Ireland for a single person with no children:

Income €Rate
Up to 32,80020%
Above 32,80041%

Tax returns for the year can be filed on paper or electronically. The return form must be filed by 31 October of the following tax year. This deadline is extended to 16 November if filing is done online using the Revenue Online System (ROS). There are penalties for late or incorrect returns. For returns up to two months late, these are 5% of the tax payable (up to a maximum of €12,695), increasing to 10% (up to a maximum of €63,435) thereafter.

A preliminary tax payment must be made by 31 October of the current year (16 November if using ROS), and should represent either 90% of your estimated tax for the current year, or 100% of the previous year’s tax. Any balance due must be paid by the 31 October of the following year, when you are due to file the actual final return. If the preliminary tax payment is not high enough, interest charges will accrue from the date of that payment. Preliminary tax can be paid by direct debit monthly over the course of the year; this is especially useful for the self-employed. Applications to pay via direct debit over the course of the year must be made before the start of the tax year in question.

 

 

 




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