Tax alert Ireland Significant changes to the tax treatment of non-Irish employments exercised in Ireland Executive Summary

Download 19.41 Kb.
Pdf ko'rish
Hajmi19.41 Kb.

18 January 2017

Issue 01/2017

Tax alert


Significant changes to the

tax treatment of non-Irish

employments exercised in


Executive Summary

The Irish Revenue released an


on 22 December 2016 highlighting a

number  of  updates  to  their  Statement  of  Practice  IT/3/07,  which  provides

guidance on the operation of PAYE for non-Irish employments exercised in


The amendments to the Statement of Practice will significantly limit the

circumstances in which exemption from Irish tax may be claimed in respect of

short term business travellers, and may bring many, who spend more than 30

workdays in Ireland in a tax year, within the scope of Irish tax.


Where an employee of a non-Irish employer performs duties in Ireland, it may be

possible in certain circumstances, to claim income tax relief where the employee

is tax resident in a country with which Ireland has a double taxation agreement


The  specific  conditions  for  exemption  from  income  tax  are  outlined  in  the

Employment Article of each DTA, but typically, the following conditions must be


1) the individual  must  be  present  in  Ireland  for  no  more  than  183

days in any 12 month period beginning or ending in the fiscal year

concerned, and

2) their remuneration must be paid by, or on behalf of, an employer

who is not a resident of Ireland; and

3) their remuneration is not borne by a Permanent Establishment

which the employer has in Ireland.


If you require further information, please

call your regular contact in EY or contact

any of the following:

Jim Ryan



T: +353 1 4750555

Sarah Connellan



T: +353 1 4750555

Pat O’Brien




T: +353 1 4750555


Where the conditions are met, the employer can apply to Revenue for permission not to operate PAYE.

As noted above, the non-Irish employee must be ‘paid by, or on behalf of, an employer who is not a resident of Ireland’.  In

determining whether this condition is met it is necessary to understand which entity is regarded as the “employer” of the

individual while they are working in Ireland.

In the recent update to the Statement of Practice, Revenue have stated they will not accept that the remuneration is paid by,

or on behalf of, an employer who is a resident of another DTA State where the individual is:

1) working for an Irish employer where the duties performed by the individual are an integral part of the business

activities of the Irish employer, or

2) replacing a member of staff of an Irish employer, or

3) gaining experience working for an Irish employer, or

4) supplied and paid by an agency (or other entity) outside the State to work for an Irish employer

Furthermore Revenue have stated that PAYE clearance will not be granted (i) simply because the remuneration is paid by a

foreign  employer  and  charged  in  the  accounts   of  a   foreign  employer  or  (ii)   where  the   remuneration  is   paid  by  a   foreign

employer and the cost is then re-charged to an Irish employer.

The restrictive interpretation set out in the Statement of Practice will significantly limit the possibility of claiming treaty

exemption for business travellers to Ireland and will bring many short term business travellers within the scope of Irish tax.

However, it is worth noting that the exemption will still apply to those short term business travellers who are not carrying on

activities in Ireland in the circumstances outlined above and where the remuneration is not recharged to an Irish corporate.

The Statement does confirm that the existing exemption which is available for business travellers who have no more than 30

workdays in Ireland in the tax year will remain in place.  This exemption is available to business travellers who are tax resident

in any country, regardless of whether Ireland has a DTA with that country.

Next Steps

Employers will need to consider the impact of the Revenue’s updated guidance on their mobile assignee population and on

business travel to Ireland.  If you have any questions please contact a member of the team listed above.

EY are engaging with Revenue to understand the full implications of Revenue’s change in practice and will provide an update

in due course.

Name of publication Month Year  | 3

EY | Assurance | Tax | Transactions | Advisory

About EY

EY is a global leader in assurance, tax, transaction and advisory services.

The insights and quality services we deliver help build trust and confidence

in the capital markets and in economies the world over. We develop

outstanding leaders who team to deliver on our promises to all of our

stakeholders. In so doing, we play a critical role in building a better

working world for our people, for our clients and for our communities.

EY refers to the global organisation and may refer to one or more of the

member firms of Ernst & Young Global Limited, each of which is a separate

legal entity. Ernst & Young Global Limited, a UK company limited by

guarantee, does not provide services to clients. For more information

about our organisation, please visit

© 2017 Ernst & Young. Published in Ireland. All Rights Reserved.

The Irish firm Ernst & Young is a member practice of Ernst & Young Global

Limited. It is authorised by the Institute of Chartered Accountants in

Ireland to carry on investment business in the Republic of Ireland.

Ernst & Young, Harcourt Centre, Harcourt Street, Dublin 2, Ireland.

Information in this publication is intended to provide only a general outline

of the subjects covered. It should neither be regarded as comprehensive

nor sufficient for making decisions, nor should it be used in place of

professional advice. Ernst & Young accepts no responsibility for any loss

arising from any action taken or not taken by anyone using this material.

Download 19.41 Kb.

Do'stlaringiz bilan baham:

Ma'lumotlar bazasi mualliflik huquqi bilan himoyalangan © 2020
ma'muriyatiga murojaat qiling