Ireland Personal Income Tax

Income tax liability in Ireland depends on an indi­vidual’s tax residence and domicile.

The tax year is the calendar year. For the 2016 tax year, an indi­vidual is regarded as an Irish tax resident if he or she meets any of the following conditions:

  • He or she spends 183 or more days in Ireland during the period from 1 January 2016 to 31 December 2016.
  • He or she spends an aggregate of 280 or more days in Ireland during the two-tax-year period from 1 January 2015 to 31 December 2016, with more than 30 days in Ireland in each tax year.
  • He or she elects to become tax resident for the tax year in which he or she comes to Ireland with the intention to be tax resident in the following tax year, and is tax resident under one of the tests listed above in that following tax year.

An individual is considered as present for a day if he or she is present in Ireland at any time during that day.

Tax concessions may apply in the year in which an individual becomes, or ceases to be, Irish tax resident.

An individual becomes ordinarily tax resident in Ireland after being tax resident for three consecutive tax years. An individual who is ordinarily tax resident and who ceases to be tax resident in Ireland is treated as continuing to be ordinarily resident for three tax years after the tax year of departure.

Domicile in Ireland is not defined in the tax law but is a legal concept based on the location of an individual’s permanent home. Irish law treats domicile as acquired at birth (usually it is the domicile of the father) and retained until an individual takes positive steps to change to another domicile.

Individuals who are tax resident in Ireland are normally subject to tax on worldwide income, including employment income, regard­less of whether the employment is carried on in Ireland or abroad. However, exceptions can apply to the following individuals:

  • Foreign-domiciled individuals
  • Individuals who commute to work outside Ireland and pay tax on the income from the employment outside Ireland

Individuals domiciled outside Ireland are entitled to a remittance basis of assessment in Ireland on investment income arising out­side Ireland and on income from employment duties performed outside Ireland, to the extent that the employment income is paid outside Ireland under a foreign contract.

If an individual is on Irish payroll, Pay-As-You-Earn (PAYE) withholding must be accounted for on all employment earnings, including benefits. If an individual is on a payroll outside Ireland, PAYE withholding is required on the amount of employment earnings (including benefits) attributable to duties performed in Ireland. An exemption can apply if the employee is resident in a treaty country and spends less than 183 days in Ireland.

Advance approval may be granted by the Irish Revenue on the proportion of the earnings to which PAYE should be applied if earnings are paid outside Ireland and if the proportion is unclear and only a portion of the earnings is likely to be assessable in Ireland.

Tax relief is available to certain non-domiciled employees who are assigned to work in Ireland.

The Special Assignee Relief Programme (SARP) is available to employees who are assigned to Ireland by a relevant employer. For this purpose, a relevant employer is a company incorporated and resident in a country with which Ireland has entered into a double tax treaty or an information exchange agreement, or an associated company of such a company. Originally the relief was only available if the assignment began in 2012, 2013 or 2014. However, the 2014 Finance Act extended the relief to assign­ments beginning in 2015, 2016 or 2017.

Under SARP, an exemption from income tax on 30% of employ­ment income in excess of EUR75,000 is granted for up to five years. For tax years before 2015, a ceiling of EUR500,000 applied. In addition, the cost of one return trip to certain home locations per year for the employee and his or her spouse and children can be provided tax free. Also, the employer can pay or reimburse tax-free education costs of up to EUR5,000 per year per child. The relief is available to individuals who earn a gross salary of at least EUR75,000 and who work predominantly in Ireland for a minimum of 12 months. The employee must not have been resident in Ireland for the five years immediately pre­ceding the year of arrival and must have worked for the foreign employer for at least 6 months before arrival (12 months for individuals who arrived in Ireland before 1 January 2015). In addition, employees who arrived in Ireland before 2015 were required to be tax resident in Ireland in the year in which relief was claimed and must not have been tax resident elsewhere. Employees arriving in Ireland in 2015, 2016 and 2017 can be tax resident in another jurisdiction if they are also tax resident in Ireland.

Under a certification procedure for the relief, the employer must certify within 30 days of arrival that the employee meets the conditions.

Nonresidents are generally subject to Irish tax on income arising in Ireland, unless they are protected by the provisions of a double tax treaty.

The Foreign Earnings Deduction (FED) applies to individuals employed by companies expanding into emerging markets who assign Irish-based employees to these markets. The relief applies to employees assigned to the following countries.

Algeria                       Indonesia                         Saudi Arabia

Bahrain                       Japan                               Senegal

Brazil                          Kenya                              Singapore

Chile                           Korea (South)                  South Africa

China                          Kuwait                             Tanzania

Congo                        Malaysia                          Thailand

(Democratic                Mexico                            United

Republic of)               Nigeria                            Arab

Egypt                          Oman                              Emirates

Ghana                         Qatar                               Vietnam

India                           Russian Federation

The relief reduces the income tax liability of the relevant indi­vidual by allowing a deduction of up to EUR35,000 against employment income. To qualify for the relief, the individual must spend 40 qualifying days in a tax year or in a continuous 12-month period in the relevant countries. To count as a qualify­ing day, a day must be one of three consecutive days throughout which the individual is working in the relevant countries. Days spent traveling to and from the work location count as qualifying days for the purposes of the relief.

Income subject to tax. The taxation of various types of income is described below.

Employment income. Most payments made by an employer, including salary, bonuses, benefits in kind, certain equity income and expense allow ances, are subject to income tax, unless a prior agreement is made with the tax authorities.

In general, non-cash benefits are taxable and are valued at the cost incurred by an employer in providing the benefits. However, special measures govern the valuation of the following taxable benefits:

  • Car: The assessable benefit is up to 30% of the original market value of the car. The taxable benefit is reduced if the employee makes a financial contribution to the employer or if the employ­ee has business mileage in excess of 24,000 kilometers in a year.
  • Loans: 13.5% of the amount of the loan, with a reduction for interest paid by the employee. The rate is 4% for a home loan.
  • Housing: 8% of the market value of the property (employer-owned accommodation) or rent paid, plus utilities paid by the company.

Employee benefits that are incurred wholly, exclusively and nec­essarily in the performance of employment duties, are not taxable.

Education allowances provided by employers to their employees’ children 18 years of age and under are taxable for income tax and social security tax purposes.

Employers must withhold Pay Related Social Insurance (PRSI; see Section C) and the Universal Social Charge (USC; see Section B) and apply the Pay-As-You-Earn System (PAYE; see Section D) with respect to the value of benefits in kind provided to employees during the tax year. Employers’ PRSI at a rate of 10.75% also applies to any benefits provided to employees.

In general, nonresidents are subject to income tax on employ­ment income, regardless of their domicile, if their duties are car­ried on and if their salary is paid in Ireland.

Self-employment and business income. Individuals resident in Ireland are subject to tax on income from trades and professions carried on in Ireland and abroad. Nonresidents are taxed on income from trades and professions carried on in Ireland only.

Taxable profits normally consist of net business profits as dis­closed in the financial accounts and adjusted to account for deductions not allowed or restricted by tax legislation.

Except for years when a business begins or terminates, taxable profits generally are those for the tax year ending 31 December or for the 12-month accounting period ending in that year.

Investment income. An individual resident and domiciled in Ireland is taxed on worldwide income from dividend and interest income. If resident but not domiciled, an individual is taxed on all investment income arising in Ireland and on income remitted to Ireland from other countries. A credit for foreign taxes paid may be available if a double tax treaty applies. A nonresident is taxed on Irish-source income only.

Dividends received by individuals from Irish tax-resident compa­nies are taxed in full, subject to relief being available under a rel­evant double tax treaty. Dividends may be subject to withholding tax at a rate of 20%, which is creditable against a resident indi­vidual’s income tax liability.

Interest on Irish government securities is subject to income tax and is generally not taxed at source, but may not be taxable if received by nonresident individuals.

Interest credited on or after 1 January 2014 on most bank and building society deposits is taxed at source at a rate of 41%, unless it is paid or credited to nonresidents. A credit is given for tax withheld if the person is taxed on the interest. The final income tax on deposit interest taxed at source is 41%.

Losses from Irish rental properties may be offset against other Irish-source rental income or may be carried forward indefinitely and offset against rental income in future years.

Nonresidents are subject to a 20% withholding tax on non­exempt interest, royalties and rental income.

Directors’fees. Directors’ fees paid by companies incorporated in Ireland are taxable in Ireland, regardless of the tax residence of the director or the place where duties are performed. Directors’ fees paid by non-Irish companies to Irish residents are taxable in Ireland. Non-domiciled individuals do not pay tax on directors’ fees received from foreign companies if all of the duties are per­formed outside Ireland unless that income is remitted to Ireland.

Directors are regarded as employed for tax purposes and as either self-employed or employed for social insurance purposes, depend­ing on the circumstances. Tax is withheld under the Pay-As-You­Earn (PAYE system, see Section D) on the basis of income earn ed during the tax year. Directors must submit personal tax returns by 31 October following the tax year.

Exempt income. A portion of income from the following sources is exempt from income tax:

  • For tax-resident individuals only, income derived from writing, composing music, painting and sculpting. This exemption is limited to profits or gains of EUR50,000.
  • Profits or gains from forestry activities.
  • Shares provided to an employee under an Approved Profit Sharing Scheme, up to a value of EUR12,700 in a tax year. Such income is liable to the USC and employee PRSI.

An individual may use the first two reliefs mentioned above to reduce the tax liability, subject to restrictions. An individual effectively pays income tax at a minimum rate of 30% if his or her total income exceeds EUR400,000 and if sufficient specified tax reliefs are claimed. The effective tax rate for individuals with total income between EUR125,000 and EUR400,000 is lower because the restriction applies on a tapering basis. For individuals whose total income is less than EUR125,000, the restrictions to the tax relief do not apply.

Taxation of employer-provided stock options. Employer-provided share options are subject to income tax, Universal Social Charge (USC; see Section B) and employee PRSI at the date of exercise on the market value of the shares at the date of exercise, less the sum of the option and exercise prices. Effective from 5 April 2007, a gain arising on the exercise, assignment or release of certain share options granted on or after 1 January 2006 is subject to income tax and employee PRSI in Ireland by reference to the number of work days spent in Ireland during the vesting period. The employee is required to account for income tax PRSI and USC within 30 days of exercise. Effective from 1 July 2012, the responsibility for payment of employee PRSI rests with the employee (before this date, the employer was required to with­hold employee PRSI on share option gains through the payroll).

For gains arising after 1 January 2004, an individual may claim a tax credit for foreign taxes paid on the same option gain in a juris­diction with which Ireland has entered into a double tax treaty. If an income tax charge arises in a non-treaty country, Ireland reduces the gain subject to Irish income tax by the tax payable in the other jurisdiction.

On the disposal of shares, capital gains tax is charged on the dif­ference between the market value of the shares at the date of exercise and the market value at the date of disposal. If the option is capable of being exercised in a period exceeding seven years after the date of grant, income tax may be charged at the date of grant in addition to a charge at the date of exercise.

Restricted stock units (RSUs) are generally taxed at the date of vesting. Effective from 1 January 2013, individuals are liable to Irish tax on RSU gains by reference to their tax residence on the date of vesting. As a result, the full gain is liable to Irish tax if the individual is tax-resident in Ireland on the date of vesting and no charge to Irish tax arises if the individual is nonresident in Ireland at the date of vesting. A credit for foreign tax payable is allowed against the Irish liability. RSUs are liable to PAYE, USC and employee PRSI, and are taxable through payroll.

Employers must withhold the following from payroll:

  • The USC on the taxable value of all share awards (excluding share option schemes; the employee is required to account for USC on share option schemes within 30 days of exercise)
  • Employee PRSI contributions
  • PAYE on share schemes that are not Revenue approved (exclud­ing share option schemes; the employee is required to account for tax within 30 days of exercise)

Capital gains and losses. Individuals resident in Ireland generally are subject to tax on worldwide capital gains. Non-domiciled individuals are not taxed on gains arising outside Ireland unless the proceeds are remitted to Ireland. Capital gains are taxed at a rate of 33% for disposals on or after 6 December 2012.

Nonresidents are taxable on capital gains derived from the fol­lowing assets located in Ireland:

  • Land and buildings
  • Mineral rights
  • Exploration or exploitation rights on the Continental Shelf
  • Assets used by a trade carried on in Ireland through a branch or agency
  • Shares that derive the greater part of their value from the first three items listed above

Gains are calculated by deducting from the proceeds the greater of the cost of the asset or, if the asset was owned by the seller on 6 April 1974, its value on that date. Cost (or the 1974 value) is in creased by an index factor to adjust for inflation up to 31 Decem­ber 2002. The value of the asset cannot be increased for inflation beginning 1 January 2003. Indexation relief is also restricted on land situated in Ireland that is held for development and on shares that derive the greater part of their value from such land.

Exemptions are available for the following capital gains:

  • The first EUR1,270 of taxable gains derived during the 2015 tax year
  • Capital gains derived from the taxpayer’s principal residence
  • Assets transferred on death
  • Wasting chattels (that is, tangible movable property with a use­ful life of less than 50 years)

Retirement relief for capital gains is available, subject to certain conditions.

Capital losses may be offset against capital gains derived in the same year or carried forward to offset capital gains in future years.

Income tax deductions

Deductible expenses. Few deductions are allowed for employees. To claim a deduction, an employee first must show that the ex pense was incurred wholly, exclusively and necessarily in the perfor­mance of employment. Tax deductions for expenses incurred by employees are granted only for exceptional items, including purchases of protective clothing.

Personal credits and allowances. The principal credits for the 2016 tax year are listed in the following table. Credits are deduct­ed from the individual’s income tax liability.

Credits                                                                   Amount (EUR)

Married persons/civil partners

(jointly assessed)                                                                  3,300

Single person                                                                          1,650

Widowed person/surviving civil partner                                  2,190

Widowed person/surviving civil partner

in year of bereavement                                                          3,300

 

Credits                                                                        Amount (EUR)

Pay-As-You-Earn (PAYE) allowance

(if salary is subject to tax at source)                                       1,650
Mortgage interest on new or existing

mortgages (varies) (a)

 

Maximum relief (single person)                                             3,000
Maximum relief

(married couple/civil partners)                                             6,000

 

Medical and dental insurance                               20% of the gross

premium (b)

 

a) This tax relief is granted at source. Mortgage interest relief is no longer avail­able to individuals who purchase a home after 31 December 2012.

b) Effective from 16 October 2013, relief with respect to premiums is restricted to EUR1,000 per adult policy and EUR500 per child policy.

The principal allowances for the 2016 tax year are listed in the following table. Allowances reduce the amount of income of the individual that is taxable at the top income tax rate.

Allowance at top rate                                        Amount

 

Pension contributions to                             Varies from 15% to 40%

approved schemes (a)(b)                             of earnings, depending

on age of individual

Employment and Investment

Incentive                                                                    EUR150,000
Start-up relief for entrepreneurs

EUR100,000 plus a carryback of

EUR100,000 against each of the preceding

six years Employee Approved Profit

Sharing Scheme                                                           EUR12,700

a) Effective from 1 January 2014, the maximum allowable pension fund for tax purposes is set at EUR2 million. Higher thresholds may apply if the value of the pension fund, as of 1 January 2014, exceeds EUR2 million, but does not exceed EUR2,300,000. Any excess is subject to a one-off charge of 40% on drawdown.

b) Pension contributions are subject to an earnings cap of EUR115,000.

In general, a nonresident is not entitled to tax credits or personal

allowances, but exceptions may apply under Irish income tax law or the provisions of a double tax treaty.

Business deductions and capital allowances. Expenses incurred

wholly and exclusively for the purposes of a trade or profession are generally deductible. Entertainment expenses for staff func-

tions are deductible if they are reasonable in amount. All other

entertainment expenses are not deductible. Deductions for auto­mobile expenses are restricted.

Rates. The following table presents the 2016 income tax rates for single or widowed individuals, or a surviving civil partner.

Taxable income Tax on lower Rate on
Exceeding Not exceeding amount excess
EUR EUR EUR %
0 33,800 0 20
33,800 6,760 40

 

The following are the 2016 income tax rates for a married couple or civil partners (jointly assessed).

Taxable income Tax on lower Rate on
Exceeding Not exceeding amount excess
EUR EUR EUR %
0 42,800* 0 20
42,800 8,560 41

* If both spouses or civil partners have income, married couples or civil partners may have more of their income taxed at the 20% rate. The income bracket is increased by EUR1 for every EUR1 received by the other spouse or civil part­ner, up to a maximum additional EUR24,800. Consequently, for a married couple or civil partners, the maximum amount of taxable income potentially subject to the 20% rate is EUR67,600.

Nonresidents are taxed at the same rates as residents.

Relief for losses. A loss arising from a trade or profession, as calculated for income tax purposes, may be offset against all income for the tax year in which the loss is incurred, or may be carried forward indefinitely and offset against income from the same trade or profession in future years; however, the loss must be used as early as possible in the years when a profit arises. A loss incurred in the final 12 months of a trade or profession may be carried back and offset against profits from the same trade or profession for the three tax years prior to the year of cessation.

Other taxes

Universal Social Charge. The Universal Social Charge (USC) is charged at the following rates and income thresholds.

Income

Exceeding
EUR
Not exceeding EUR Rate

%

0 12,012 1 (a)
12,012 18,668 3
18,668 70,044 5.5
70,044 8
100,000 11 (b)
  • This income is exempt if income does not exceed EUR13,000.
  • The 11% rate applies to “relevant income,” excluding employment income that exceeds EUR100,000. Consequently, the 8% rate applies to employment in­come exceeding EUR100,000.

The USC applies to all income, including non-cash benefits-in­kind and equity compensation under an unapproved scheme, subject to certain exceptions. It applies to all income before relief for pension contributions and deductions for capital allowances. Chargeable persons are required to pay the USC as part of pre­liminary tax (see Section D). Employers deduct the USC from payments to employees at the rates shown above.

Inheritance and gift tax. Capital Acquisitions Tax (CAT) includes both gift and inheritance tax and is primarily payable by the ben­eficiary of a gift or an inheritance.

CAT is payable if any of the following conditions are met:

  • The donor or decedent is resident or ordinarily resident in Ireland.
  • The beneficiary is resident or ordinarily resident in Ireland.
  • The gift or inheritance consists of Irish property.

If the donor or decedent or beneficiary is not domiciled in Ireland, he or she is not regarded as resident or ordinarily resident for CAT purposes unless he or she has been resident for five consecutive years immediately preceding the year of the gift or inheritance.

CAT is imposed at a rate of 33% for gifts and inheritances re­ceived on or after 6 December 2012 (30% for benefits received in the period of 7 December 2011 through 5 December 2012). It is payable on the amount exceeding the relevant tax-free thresh­old. Three tax-free thresholds exist. The thresholds vary depend­ing on the relationship between the donor or decedent, and the beneficiary. Effective from 14 October 2015, the following are the relevant thresholds.

Threshold                                         When

Group        (EUR)                           applicable

A             280,000                          If the beneficiary is a child (including certain foster     .                                                        children) or minor child of a deceased child of the       .                                                         disponer; parents also fall within this threshold if       .                                                         they receive an inheritance from a child.

B               30,150                          If the beneficiary is a brother, sister, niece, nephew, or .                                                       lineal descendant of the descendant.

C               15,075                          All other cases

Any benefit received since 5 December 1991 within the same group threshold is aggregated for the purposes of determining whether any CAT is payable on the current benefit.

An exemption from CAT applies to gifts or inheritances received by a spouse or civil partner. Gifts of EUR3,000 or less are also exempt. Relief from CAT is available on gifts or inheritances of agricultural property and business property.

Ireland has entered into inheritance tax treaties with the United Kingdom and the United States.

Local Property Tax. Effective from 1 July 2013, an annual Local Property Tax (LPT) is charged on all residential properties in the Republic of Ireland. The LPT is due with respect to residential properties on a specific ownership date in any given year. For 2013, the ownership date was 1 May 2013. Residential property valuations for 2014 to 2019 remain similar to the valuations used for 2013 (even if improvements are made to the property). The ownership date for 2016 was 1 November 2015 and will remain 1 November of the preceding year for subsequent years. LPT depends on the market value of the residential property on 1 May 2013, as assessed by the owner in accordance with Revenue guidelines. Property values are organized into several value bands of EUR50,000, up to EUR1 million. The tax liability is calculated by applying 0.18% to the midpoint of the relevant band. Residential properties valued over EUR1 million are assessed on the actual market value at a rate of 0.18% on the first EUR1 million in value and at 0.25% on the portion of the value above EUR1 million.

Social security

Rates. Ireland imposes payroll taxes for Pay Related Social Insurance (PRSI) on all employment income, including most benefits. The following are the rates of social security contribu­tions for 2016.

Social security taxes                                  Contribution rate (a)

PRSI; paid by

Employee                                                       4% on gross income

(no maximum income)

Employer                                                10.75% on gross income

(no maximum income) (b)

Self-employed                                               4% on gross income

(no maximum income) (c)

a) If weekly earnings are EUR352 or less, employee contributions are nil.

b) If weekly earnings are EUR376 or less, employer PRSI is calculated at 8.5%.

c) The minimum annual PRSI contribution is EUR500.

Social insurance. Employed individuals are generally subject to PRSI on income from employment, including benefits in kind. A contribution based on each employee’s salary and benefits is pay­able by employers. Self-employed persons are subject to social insurance contributions on total in come, including investment income and rental income.

A new PRSI credit, which reduces the amount of PRSI payable, is introduced from 1 January 2016 for employees earning between EUR352.01 and EUR424 per week. The credit is calcu­lated by subtracting one-sixth of the employment income over EUR352.01 from the maximum credit of EUR12.

PRSI applies to unearned income of the following individuals:

  • Employed contributors under 66 years of age
  • Individuals under 66 years of age receiving a taxable pension

Individuals are excluded from the above PRSI charge if they are not chargeable persons for income tax purposes and accordingly not required to file an income tax return. Individuals who are 66 years of age or older are not liable to pay PRSI and consequently are not affected by the above measure.

The payment of PRSI contributions may secure the following benefits:

  • Contributory old-age pension (for employees and self-employed persons)
  • Unemployment benefits (now known as Jobseekers Benefits; for employees only)
  • Sickness benefits (for employees only)
  • Limited dental benefits (for employees only)
  • Limited medical (optical and hearing) benefits (for employees only)

Social insurance is payable by individuals employed in Ireland. However, non-European Economic Area (EEA) nationals, other than individuals from Australia, Canada, Japan, Korea (South), New Zealand, Quebec, Switzerland and the United States, are exempt for the first 52 weeks of their assignment in Ireland if the assignment is temporary and if the employer’s principal place of business is outside Ireland, the Isle of Man and the United Kingdom. An application must be made to the Department of Social Protection to exempt such individuals from Irish social insurance.

Individuals from the EEA and nationals from Australia, Canada, Japan, Korea (South), New Zealand, Quebec, Switzerland and the United States may remain covered by their home-country social insurance systems for a specified time period. An application must be made to the relevant authorities to apply for an A1 Certificate/Certificate of Coverage in this regard.

Ireland also has an agreement with the Isle of Man and the Channel Islands (Alderney, Guernsey, Herm, Jersey and Jethou).

Some individuals leaving Ireland on short-term assignments may remain covered under the Irish system for a limited period, sub­ject to approval of social welfare authorities.

Tax filing and payment procedures

Filing. The tax year for individuals runs from 1 January to 31 Dec-em ber. Individuals who are subject to income tax for the tax year must file tax returns for earned and investment income and capi­tal gains under the self-assessment rules. To avoid a surcharge penalty, taxpayers must file their returns by 31 October following the end of the tax year. If a return is filed between 1 November and 31 December, the surcharge is 5%. If a return is filed after 31 Dec ember, the surcharge is 10%.

Capital gains are included in the tax return or in a separate form for individuals not subject to income tax. Individuals with capital gains in the tax year must declare such gains by the relevant filing date (see Tax administration dates).

Non-domiciled individuals are not required to provide details of worldwide investment income or capital gains. However, they must file tax returns and supply information concerning the following: details of employment earnings subject to Irish income tax; and remittances of investment income and capital gains to Ireland dur­ing the year. Non-domiciled individuals are subject to the filing dates mentioned above.

Married persons are taxed jointly or separately, at the taxpayers’ election.

Payment. Tax on salaries and benefits normally is collected through the PAYE system.

Income tax self-assessment applies to self-employed individuals. These individuals include persons receiving rental income and investment income. Ninety percent of the tax due, including the USC (see Section B), for the year or an amount equal to 100% of the final liability of the preceding year must be paid by 31 October in the tax year to avoid an interest charge. Alternatively, income tax may be paid in 12 equal monthly instal lments throughout the tax year. The aggregate of these instal lments must equal 105% of the second preceding year’s liability, and must be paid by direct debit mandate (under this system, tax payments are deducted monthly from an individual’s bank account) if the individual had income tax liability in the second preceding year. Any balance of tax due must be paid by 31 October following the end of the tax year. A limited number of cases are selected for subsequent in-depth examination by the Revenue Commissioners.

Capital gains tax on gains arising on disposals during the period from 1 January to 30 November must be paid by 15 December in that tax year, and the tax on gains arising on disposals from 1 December to 31 December must be paid by the following 31 January.

Tax administration dates. The following table presents important tax administration dates for the year ending 31 December 2016.

Due date

Pay balance of 2015 income tax

liability                                                                    31 October 2016

File 2015 income tax return                                31 October 2016

Pay 2016 preliminary tax equal to 90%

of the actual income tax liability or 100%

of the previous

year’s final income tax liability                           31 October 2016
Capital gains tax due

For period of 1 January 2016

through 30 November 2016                              15 December 2016
For period of 1 December 2016

through 31 December 2016                                31 January 2017

 

File 2016 return                                                  31 October 2017

 

Balance of 2016 tax due                                     31 October 2017

Double tax relief and tax treaties

Ireland has entered into double tax treaties to avoid double taxa­tion and to establish a right of taxation between Ireland and those countries. In general, the treaties provide for a credit for foreign taxes paid against the individual’s Irish income tax liabilities. Some treaties provide rules to determine the country where the individu­al is considered to be resident for tax purposes.

Ireland has entered into double tax treaties with the following jurisdictions.

Albania                        Hungary                        Portugal

Armenia                       Iceland                           Qatar

Australia                      India                              Romania

Austria                         Israel                              Russian

Bahrain                        Italy                               Federation

Belarus                         Japan                             Saudi Arabia

Belgium                       Korea (South)                Serbia

Bosnia and                   Kuwait                           Singapore

Herzegovina                 Latvia                             Slovak Republic

Bulgaria                       Lithuania                        Slovenia

Canada                         Luxembourg                  South Africa

Chile                            Macedonia                     Spain

China                           Malaysia                        Sweden

Croatia                         Malta                             Switzerland

Cyprus                         Mexico                          Thailand

Czech Republic            Moldova                        Turkey

Denmark                      Montenegro                   Ukraine

Egypt                           Morocco                        United Arab

Estonia                         Netherlands                   Emirates

Finland                         New Zealand                 United Kingdom

France                          Norway                         United States

Georgia                        Pakistan                         Uzbekistan

Germany                      Panama                          Vietnam

Greece                          Poland                           Zambia

Hong Kong SAR

A double tax treaty with Botswana is in force and will enter into effect on 1 January 2017. A double tax treaty with Ethiopia has been signed, but it is not yet in force. However, certain Irish domestic withholding tax exemptions available to residents of treaty countries are extended to residents of these countries and, effective from 1 Jan uary 2009, to residents of a country with which Ireland signs a double tax treaty (from the date of signing of such treaty).

If double tax treaty relief is not available, foreign income tax and foreign capital gains tax are deductible from the foreign-source income or capital gain for purposes of computing Irish taxable income.

Entry visas

European Union (EU) national passport holders are classified as “non-visa required nationals.” Consequently, they are not required to apply for an entry visa for Ireland. In addition, nationals of the following jurisdictions do not require an entry visa for Ireland.

Andorra                       Guatemala                      Portugal

Antigua                        Guyana                          Romania

and Barbuda                 Honduras                       Samoa

Argentina                     Hong Kong SAR           San Marino

Australia                      Hungary                        Seychelles

Austria                         Iceland                           Singapore

Bahamas                      Israel                              Slovak Republic

Barbados                      Italy                               Slovenia

Belgium                       Japan                             Solomon Islands

Belize                           Kiribati                           South Africa

Bolivia                         Korea (South)                Spain

Botswana                     Latvia                             St. Kitts and

Brazil                           Lesotho                          Nevis

Brunei Darussalam      Liechtenstein                  St. Lucia

Bulgaria                       Lithuania                        St. Vincent and

Canada                         Luxembourg                  the Grenadines

Chile                            Macau SAR                   Swaziland

Costa Rica                    Malaysia                        Sweden

Croatia                         Maldives                        Switzerland

Cyprus                         Malta                             Taiwan

Czech Republic            Mexico                          Tonga

Denmark                      Monaco                         Trinidad and

Dominica                     Nauru                            Tobago

El Salvador                  Netherlands                   Tuvalu

Estonia                         New Zealand                 United Kingdom

Fiji                               Nicaragua                      (and colonies)

Finland                         Norway                         United States

France                          Panama                          Uruguay

Germany                      Paraguay                        Vanuatu

Greece                          Poland                           Vatican City

Grenada

An individual holding a non-visa required passport is not auto­matically guaranteed entry to Ireland. An immigration officer at Immigration clearance has the authority to grant or deny permis­sion to enter Ireland and also has the authority to decide on the duration of a person’s stay in Ireland. Consequently, an individual wishing to enter Ireland must satisfy the immigration officer at Immigration clearance that, after arrival in Ireland, the individual intends to act in accordance with their stated purpose of visit to Ireland (appropriate supporting documents at entry are important).

Non-EU national passport holders and nationals of countries not mentioned above must apply for an entry visa before their arrival in Ireland at any Irish consular office or embassy abroad, or to the Department of Foreign Affairs in Dublin.

In October 2014, the Irish authorities introduced a change for minors (under the age of 18) who are seeking a visa to enter Ireland. When a visa is issued to a minor, the visa (in his or her passport) identifies whether the minor who holds an Irish visa is traveling in the company of a parent(s), legal guardian(s) or other adult(s), or traveling unaccompanied. The visa with respect to an accompanied minor states the name(s) and passport number(s) of the accompanying adult(s), and the minor must travel into Ireland with the accompanying adult(s) named on the visa. Failure to do so can result in refusal of entry.

Individuals over the age of 6 years who are applying for Irish visas in China, India, Nigeria or Pakistan must provide biometric data as part of their visa application.

Although an Irish entry visa affixed to an individual’s passport indicates that a person has permission to travel to Ireland during the dates stated on the visa, it does not automatically guarantee entry to Ireland. An immigration officer at Immigration clear­ance has the authority to grant or deny permission to enter Ireland and also has the authority to decide on the duration of a person’s stay in Ireland. Consequently, an individual wishing to enter Ireland must satisfy the immigration officer at Immigration clearance that the individual intends to comply with the condi­tions of the visa held by them at the point of entry to Ireland (appropriate supporting documents at entry are important).

In the first instance, non-EEA nationals who are travelling to Ireland with a valid employment permit are granted only a single-entry visa. After they arrive in Ireland, they must apply for a re­entry (multi-entry) visa, which allows them to travel in and out of Ireland while they remain resident. A re-entry visa is granted when they register their residency (see Section H). Non-EU nationals may be required to have employment permits if they intend to take up employment in Ireland. If an employment per­mit is required, non-EU nationals must have employment permits in their possession at the point of entry to Ireland.

The Irish and British governments issued a joint scheme in June 2014 that allows visitors from China and India to travel freely within Ireland and the United Kingdom on either an Irish or UK visa. As a result, tourists and business visitors may visit both Ireland and the United Kingdom, including Northern Ireland, on a single visa. This scheme applies only to individuals holding a short-stay visa (travel for up to 90 days).

Employment permits and self-employment

Employment permits. In October 2014, the Irish government enacted the Employment Permits (Amendment) Act 2014, which created nine categories of Irish employment permits. The follow­ing are the categories of employment permits:

  • Critical Skills Employment Permit (formally Green Card)
  • Intra-Company Transfer (ICT) Permit
  • General Employment Permit (formally Work Permit)
  • Contract for Services Employment Permit
  • Dependent/Partner/Spouse Employment Permit
  • Internship Employment Permit
  • Graduate Employment Permit
  • Sports and Cultural Employment Permit
  • Reactivation Employment Permit

Each of these categories has their own qualifying requirements and conditions. In general, EEA nationals and Swiss nationals do not require employment permits to live and work in Ireland. The Department of Jobs, Enterprise and Innovation (DJEI) issues employment permits. Employers wishing to hire a non-EEA indi­vidual is required to apply for an employment permit on behalf of the applicant. An individual may also apply for an employment permit if he or she has received a job offer that is conditional on the holding of a valid employment permit. In addition to employ­ment permits, depending on their country of origin, non-EU nationals may also need an entry visa (see Section F). The cate­gories of the most commonly used permits in Ireland are sum­marized below.

General Employment Permit. To obtain a General Employment Permit (formerly a Work Permit), an individual must be employed in an eligible occupation under an Irish employment contract and paid directly from an Irish payroll. The employment must not be in an excluded job category contained in the Ineligible Categories of Employment for Employment Permits.

The minimum remuneration requirement is EUR30,000. Effective from 1 October 2014, remuneration can be made up of Basic Annual Salary (equal to at least the Irish National Minimum Wage) and Health Insurance Payments. The remuneration thresh­old is reduced from EUR30,000 to EUR27,000 with respect to employment permit applications under the General Employment Permit category for the following individuals:

  • Non-EEA graduates of overseas third-level institutions (univer­sities and third-level colleges) that have been offered an Information Technology Graduate position on the Highly Skilled Occupations List
  • Non-EEA graduates of Irish institutions who have been offered a graduate position on the Highly Skilled Occupations List
  • Technical or sales support roles with non-EEA language requirements

In addition, the employer must advertise the vacancy with the Department of Social Protection’s employment services (previ­ously referred to as FAS) and in both national and local newspa­pers or on a jobs website, to demonstrate that it was unable to fill the vacancy with an EEA national. Individuals engaged in eligi­ble occupations, except those that are contrary to public interest, may qualify for a General Employment Permit. A General Employment Permit is available for an initial period of either six months (EUR500 fee) or two years (EUR1,000 fee). After five years, an indefinite extension may be available for no fee. No more than 50% of employees of an Irish employer may be from non-EEA countries.

Critical Skills Employment Permit. To obtain a Critical Skills Employment Permit (formerly Green Card), an individual must be employed under an Irish employment contract and paid directly from an Irish payroll. The minimum salary requirement is EUR60,000. Effective from 1 October 2014, remuneration can be made up of Basic Annual Salary (equal to at least the Irish National Minimum Wage) and Health Insurance Payments. Individuals in all occupations except those that are contrary to public interest may qualify for a Critical Skills Employment Permit.

A non-EEA national who has been offered an Irish employment contract and will be paid directly from Irish payroll may be eli­gible for a Critical Skills Employment Permit if the salary is between EUR30,000 and EUR59,000. The individual must hold a third-level qualification (at least a degree qualification) and the role must be included in the Highly Skilled Occupations List.

A Critical Skills Employment Permit applies only if the offer of employment is for a period of at least two years. An initial permit is available for a two-year period (EUR1,000 fee). No more than 50% of employees of an Irish employer may be from non-EEA countries.

Extension of Green Card and Critical Skills Employment Permit. Effective from 1 April 2015, Green Card and Critical Skills Employment permit holders who have completed two years of continuous employment in Ireland must submit a request to the DJEI for a letter that confirms their compliance with the terms and conditions of their employment permit. If the DJEI is satis­fied, it issues a letter confirming this fact, and the individual must present this letter to the Garda National Immigration Bureau (GNIB) with appropriate documentation to apply for an extension of 12 months of the duration of their GNIB card (see Section H).

Intra-Company Transfer Permit. To obtain an ICT Permit, an individual must be transferred to a company related to his or her employer in Ireland (that is, sister, parent or subsidiary) and must remain on a foreign employment contract and foreign payroll (basic salary must be paid by the home country entity). An ICT Permit is available only to senior management, key personnel and individuals who are assigned to Ireland for specific training purposes.

The minimum salary is EUR40,000. Effective from 1 October 2014, remuneration must be made up of Basic Annual Salary (equal to at least the Irish National Minimum Wage), board and accommodation, and Health Insurance Payments. The Basic Annual Salary must be paid by the individual’s home country payroll, but payments with respect to board and accommodation and health insurance can be paid by either the Irish or foreign entity.

A Training ICT Permit is available for non-EEA personnel who are in a training program and require a transfer to the Irish entity. This permit is granted for a 12-month maximum period, and the individual must remain on a foreign contract and foreign payroll (the home country entity must pay the Basic Annual Salary). The minimum annual remuneration is EUR30,000. A detailed train­ing plan must be submitted as part of the application to the DJEI.

The relevant transferee must have been working for a minimum period of six months with the overseas company before the transfer.

An ICT Permit is available for an initial period of six months (EUR500 fee) or two years (EUR1,000 fee). An extension for an additional three years is available (EUR1,500 fee). No further extensions are available. No more than 50% of employees of the Irish entity can be from non-EEA countries.

Dependent/Partner/Spouse Employment Permits. To obtain a Dependent/Partner/Spouse Employment Permit, the dependent, partner or spouse must satisfy the following conditions:

  • They must be in a qualifying relationship with a non-EEA national who holds an eligible Irish employment permit. Not all types of Irish employment permits allow a dependent/partner/ spouse to qualify for this permit.
  • They must be legally resident in Ireland and must have an offer of employment from an employer registered and trading in Ireland.

Dependents, partners or spouses who are eligible for a Dependent/ Partner/Spouse Employment Permit have greater ease of access to employment in Ireland for the following reasons:

  • They may apply for the permit with a remuneration of less than EUR30,000 per year (but not less than the Irish National Minimum Wage).
  • They do not require a full-time position. A minimum of 10 hours per week with remuneration of not less than the hourly minimum wage rate is required.

Dependents, partners or spouses who are granted an employment permit for the first time in Ireland are expected to stay with the initial employer for a period of 12 months.

The advertising of the job vacancy is not required for a Dependent/Partner/Spouse Employment Permit. The permit is available for all occupations. No application fee is payable. The permit expires on the same date as the spouse’s or primary depen­dent/partner’s permit. No more than 50% of employees of an Irish entity may be from non-EEA countries.

Atypical Working Scheme. The Department of Justice introduced the Atypical Working Scheme on 2 September 2013. This scheme covers a situation in which an employee would normally require an employment permit to work in Ireland but because of the short-term nature of the employment (15 to 90 calendar days inclusive), the employee is not eligible for a permit under the existing rules of the DJEI.

Applications must be made to the Department of Justice. Only one application is allowed per individual in a 12-month period. The fee is EUR250.

Van der Elst ruling. Non-EEA nationals whose normal place of work is in another EU country can seek entry to Ireland under the Van der Elst ruling, which was issued by the Court of Justice of the EU. This ruling allows a non-EEA national who is legally employed by a company in an EU country to perform services in another European country on a project for a short time. The Irish authorities recognize this ruling. As a result, a non-EEA national can seek permission to remain for up to a maximum of 12 months to work in Ireland on behalf of their European employer.

Other work permit exemptions. The following individuals are not required to obtain employment permits in Ireland:

  • A non-EEA national who has obtained explicit permission from the Department of Justice and Equality to remain resident and employed in Ireland
  • A non-EEA national who has been granted refugee status
  • A non-EEA national who holds appropriate business permis­sion to operate a business in Ireland
  • A non-EEA national who is a registered student working less than 20 hours a week
  • Swiss nationals

Bulgarian and Romanian nationals. In July 2012, the DJEI announced that Bulgarian and Romanian nationals no longer require employment permits for Ireland.

Croatian nationals. Effective from 1 July 2013, Croatian nationals no longer require employment permits in Ireland.

Self-employment. Arising from an ongoing review of the busi­ness-, entrepreneur- and investor-related migration schemes, the Irish Naturalisation and Immigration Service decided to suspend the Business Permission Scheme, effective from the close of business on 16 March 2016 until further notice. This does not affect applications received before 16 March 2016 or the status of persons already holding permission under the scheme.

Other immigration programs. The Department of Justice intro­duced the programs described below, effective from April 2012.

Immigrant Investor Programme. The Immigrant Investor Programme is open to non-EEA nationals and their families who commit to an approved investment in Ireland. Approved partici­pants in the program and their immediate family members are granted rights of residence in Ireland, which allow them to enter Ireland on multi-entry visas and to remain in Ireland for a defined period, with the possibility of ongoing renewal. The pro­gram will facilitate the establishment over time of a permanent relationship in Ireland for the participants. To be considered for the program, an investor must propose an investment in one or more of the following categories:

  • A one-off endowment of a minimum of EUR500,000 to a public project benefitting the arts, sports, health, culture or education.
  • A minimum EUR500,000 aggregate investment in new or exist­ing Irish businesses for a minimum of three years. Funding by the investor through the intermediary of a venture capital fund is considered if it can be demonstrated that the net effect is at least equivalent to that of a direct investment.
  • Minimum EUR1 million investment in a special low-interest, five-year immigrant investor bond. One interest payment of 5.1% is required at the end of the five-year investment period. This equals an annual equivalent rate (AER) of interest of 1%.
  • A minimum EUR950,000 mixed investment consisting of EUR450,000 in property and EUR500,000 in immigrant inves­tor bonds.

If the required criteria are met, successful applicants can expect to receive residence permission for five years, with an initial review after the first two years, to ensure conditions are still being met. The investor is not required to establish actual resi­dence in Ireland.

Applications for this scheme are made to the INIS.

Start-up Entrepreneur Programme. Under the Start-up Entrepreneur Programme, non-EEA nationals with an innovative business idea for a High Potential Start-up and funding of EUR50,000 can acquire residency in Ireland for the purposes of developing their business. No initial job creation targets are set because it is recognized that such a business can take some time to get off the ground. The intention of the program is to support High Potential Start-ups, which are defined as enterprises that satisfy the following conditions:

  • They introduce a new or innovative product or service to inter­national markets.
  • They are capable of creating 10 jobs in Ireland and realizing EUR1 million in sales within three to four years of starting up.
  • They are led by an experienced management team.
  • They are headquartered and controlled in Ireland.
  • They are less than six years old.

This scheme is not intended for retail, personal services, catering or other similar businesses.

Successful applicants can expect to receive an initial permission of two years. Following a review at this point to ensure that the entrepreneur is continuing to progress with the business propos­al, a further three years will be granted. After the initial five-year period, successful entrepreneurs will be free to apply for resi­dence in five-year periods.

Applications for this scheme are made to the INIS. H. Residence permits and naturalization

Residence permits. In general, EEA nationals and Swiss nationals are not required to apply for a Garda National Immigration Bureau (GNIB) Card (residence permit). Non-EEA and non-Swiss nationals who intend to remain longer than 90 days in the Dublin area must register their residency and obtain a GNIB card from the GNIB in Dublin. In areas outside Dublin, registration takes place at the local police station.

All individuals who are 16 years of age or older must register with the GNIB office to obtain their GNIB card. The fee is EUR300 per registration.

Long-term residency. To obtain Irish long-term residency, an individual must have been legally resident in Ireland continu­ously for over five years (60 months) on the basis of holding an employment permit (work permit, spousal permit or working authorization [a working authorization was a form of employ­ment permit that was available before 1 February 2007; in February 2007, the new arrangements discussed in Section G replaced the working authorization scheme]). The fee per appli­cation is EUR500.

Under the current policy, ICT Permit holders (those working under assignments and trainees) are not eligible to apply for long­term residency.

Naturalization (citizenship). In general, an individual applying for naturalization must fulfill several requirements, including the following:

  • He or she had continuous reckonable residence (qualifying periods of lawful residence) in Ireland for the one year imme­diately before the date of application.
  • During the eight years preceding the year described in the first bullet, he or she had a total of four years reckonable residence in Ireland.

The fee per application is EUR950.

Family and personal considerations

Family members. If the spouse or dependents of a working expa­triate intend to work, they must apply independently for employ­ment permits.

Driver’s permits. No time restriction applies to EEA nationals with respect to the use of their home-country driver’s licenses in Ireland while the licenses are valid. Non-EEA foreign nationals may drive legally in Ireland using their home-country driver’s licenses without restriction for 12 months. After the 12-month period expires, if the individual wishes to continue to drive in Ireland, he or she must apply for an Irish Learners Permit.

To obtain an Irish driver’s license, an individual must take writ­ten, verbal, practical and vision tests.