Employer Payroll Reporting Requirements in Ireland

Does an employer relocating employees or sending employees on secondment to Ireland have an obligation to register as an employer and pay payroll taxes in Ireland?  If so, what are the filing requirements?

All foreign employers who have employees working in Ireland must register as an employer for payroll taxes purposes (PAYE) with the Irish Revenue Commissioners.  If an employer pays income which is within the scope of the PAYE system but fails to register for that purpose, the Revenue Commissioners may compulsorily register the employer, estimate the tax due and seek payment of the amount of deductions the employer should have made under the PAYE system.

Generally, the employer payroll returns are due for filing on line, together with payment of the payroll taxes, by 23rd of the following month.  If the taxes are paid late, the Collector may charge interest.

What are the income tax rates?

 

20%

40%

Single/ Widowed Persons

(no dependent children)

€33,800

Balance

Marries couples/ One income

€42,800

Balance

Married Couples/ Two incomes*

€67,600

Balance

Single / Widowed Persons

€37,800

Balance

* Certain criteria apply.

The Universal Social Charge is also applicable and ranges from 1% to 8% based on income levels. Personal tax credits and reliefs are available, to tax resident individuals, to reduce the overall tax liability.

How would travel and subsistence expenses from home country be treated if employee is required to be in Ireland?

In certain circumstances an employer is allowed to re-imburse an employee the costs of certain business journeys but not the cost of travelling from home to work. In addition, certain removal and relocation expenses can be re-imbursed.

Removal/Relocation Expenses

It is an established principle under tax law that, where an employer pays or reimburses the personal expenses for an employee, the amount paid or reimbursed is to be treated as part of the employee’s remuneration and taxed accordingly. In strictness, this principle applies to payments made towards the

costs incurred by an employee in moving house to take up employment at a new location.  However, the Revenue will relax this principle in genuine cases of employees having to incur expenses to move to a new employment location and the payment made by the employer towards the expenses results in no net overall benefit to the employee.

Conditions which must be satisfied

The removal/relocation expenses may be paid free of tax if the following conditions are met:

  1. The reimbursement to the employee or payment directly by the employer must be in respect of reasonable removal/relocation expenses actually incurred
  2. The payment of the expenses must be properly controlled and moving house must be necessary in the circumstances.

In general, the expenses which can be reimbursed tax free include:

Are there any exemptions for workers coming from abroad to Ireland?

There is an exemption for Temporary Assignees.

In certain circumstances, the Revenue Commissioners do not require an employer to operate the Irish PAYE system in respect of temporary assignees.   To qualify for the exemption from the obligation to operate PAYE, the following criteria must be satisfied:

1.       The employee must be resident in a country with which the State has a double tax agreement;

2.       The employee must not be resident in the State for tax purposes for the relevant tax year;

3.       The employee must have a genuine foreign office or employment;

4.       The employee must not be paid by, or on behalf of, an employer resident in the State;

5.       The cost of the employment is not borne, directly or indirectly, by a permanent establishment in the State of the foreign employer; and

6.       The duties of that office or employment are performed in the State for not more than 60 working days in total in a year of assessment and, in any event, for a continuous period of not more than 60 working days.  For this purpose a ‘working day’ is any day in which any work is performed in the State.

In certain circumstances the exemption from the obligation to operate PAYE will be extended to employees who exceed 60 working days in the State, if the conditions below are satisfied:

1.       The Foreign employer is registered in the State as an employer for PAYE, purposes and

2.       The employee will be present in the State for a period or periods not exceeding 183 days in the aggregate in a year of assessment

3.       The employee suffers withholding tax at source in the ‘home’ country on the income attributable to the performance in the State of the duties of a foreign employment

4.       The employee must supply evidence of withholding tax (payslip or statement from relevant foreign tax jurisdiction)

The application for clearance from the Revenue Commissioners for the release from the obligation to operate the Irish PAYE system in respect of temporary assignees should be made within 21 days from when the employee has taken up duties in the State.

For further information, please contact Imelda Prendergast, OSK

E: prendergasti@osk.ie

W: www.osk.ie

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