Certain benefits paid by the Department of Employment Affairs and Social Protection are liable to tax. They remain exempt from PRSI and USC.
Remittance basis of taxation (RBT)
RBT provides favourable taxation treatment for non-Irish domiciled individuals in respect of foreign investment income (e.g. rental) and foreign-source employment income relating to overseas duties. RBT is not available in relation to earnings from a foreign employment exercised in Ireland. Such earnings are liable to PAYE, subject to certain exclusions. Where RBT applies, the amount of foreign income taxable in Ireland is limited to the amount remitted to Ireland. Where an individual subject to RBT transfers foreign-source income (or property bought using that income) to their spouse or civil partner and that income or property is remitted to Ireland, the remittance will be deemed to have been made by the individual.
Capital gains arising on the disposal of non-Irish assets by non-Irish domiciled individuals are liable to Irish CGT only to the extent that the gain is remitted to Ireland.
Where an individual subject to RBT transfers the proceeds from the disposal of a non-Irish asset to their spouse or civil partner and those proceeds are remitted to Ireland, the remittance will be deemed to have been made by the individual. The table below summarises the position:
|Resident, non-Irish domiciled||Income/gains taxable in Ireland|
|Foreign employment: Irish workdays||Yes|
|Foreign employment: Non-Irish workdays||Only if remitted|
|Foreign investment income (e.g. rental income)||Only if remitted|
|Irish capital gains||Yes|
|Foreign capital gains||Only if remitted|
Foreign earnings deduction (FED)
FED relief was introduced in 2012 to encourage companies that are expanding into emerging markets. The relief applies to individuals who spend significant amounts of time working in a relevant state. The relief has been extended to 2022.
The relief provides for a reduction in the individual's employment income (excluding certain benefits in kind but including share-based reward) by apportioning the income by reference to the number of qualifying days worked in a relevant state in the year over the number of days that the employment is held in the year. The reduction is capped at EUR 35,000 in any year.
The list of qualifying countries includes Algeria, Bahrain, Brazil, Chile, China, The Democratic Republic of the Congo, Colombia, Egypt, Ghana, India, Indonesia, Japan, Kenya, The Republic of Korea, Kuwait, Malaysia, Mexico, Nigeria, Oman, Pakistan, Qatar, Russia, Saudi Arabia, Senegal, Singapore, South Africa, Tanzania, Thailand, the United Arab Emirates, and Vietnam. In order to qualify for relief, an individual must work in a qualifying state for at least 30 days.
Trans-border workers relief
Income tax relief is available to individuals who are resident in Ireland but who work outside Ireland. The relief operates in such a way as to effectively exclude from Irish tax the income arising from a qualifying employment. In order to qualify for the relief, the individual must hold an employment outside Ireland for a continuous period of at least 13 weeks in a country with which Ireland has a DTT. Income from the qualifying employment must be fully taxed in that country and the foreign tax paid. The individual must also be present in Ireland for at least one day a week during the period of the qualifying employment.
Research and development (R&D) tax credit
Companies may now surrender a portion of their R&D tax credit to reward key employees who have been involved in the R&D activities of the company, allowing them to effectively receive part of their remuneration tax free. In order to qualify as a ‘key employee’:
- the employee must not have been a director of the employer company
- the employee must not have had a material interest in the employer company
- the employee must perform at least 50% of their duties ‘in the conception or creation of new knowledge, products, processes, methods, or systems’, and
- at least 50% of the emoluments of the employee must qualify as R&D expenditure.
The effective rate of tax of the employee cannot be reduced below 23%, and unused tax credits that the employee has been allocated may be carried forward. The employee may only make a claim to the Irish Revenue for a tax refund after the end of the tax year.
Ireland does not impose restrictions on movement of funds into Ireland or from Ireland to other countries. Foreign currency bank accounts may also be held in Ireland and abroad. If a new foreign bank account is opened after arrival in Ireland, it must be reported on your tax return.
Clearance to work in Ireland
Generally, non-EEA nationals require work clearance, and in certain cases an entry visa, to come and work in Ireland, but EEA nationals do not require either an employment permit or visa to come and work in Ireland.
The Employment Permits (Amendment) Act 2014 introduced nine specific categories of employment permits:
- Critical Skills Employment Permit.
- Spouse, Civil Partner, and Dependent Employment Permit.
- General Employment Permit.
- Intra-Company Transfer Employment Permit.
- Reactivation Employment Permit.
- Contract for Services Employment Permit.
- Exchange Agreement Employment Permit.
- Sports and Cultural Employment Permit.
- Internship Employment Permit.
The three most common types of employment permits are the following:
Critical Skills Employment Permit
The Critical Skills Employment Permit has been designed to address the shortage of skills identified as 'critical' within the Irish labour market, where the offer of employment with an employer in Ireland is for two years or more. The skills will be identified based on the Standard Occupational Classification System (SOC) that is used worldwide, with a biannual review to ensure that the permit remains responsive to skills that are in demand. Spouses of Critical Skills Employment Permit holders are no longer required to obtain a Spousal Employment Permit in order to work in Ireland. This category of individuals can now seek Stamp 1G immigration permission as the spouse of a Critical Skills Employment Permit holder after arrival in Ireland.
General Employment Permit
The General Employment Permit is designed to facilitate employment with an employer in Ireland under a broad spectrum of occupations. This permit may suit an individual who would otherwise be eligible for a Critical Skills Employment Permit but for the fact that the offer of employment is for less than two years.
Intra-Company Transfer Permit
The Intra-Company Transfer Permit facilitates the temporary transfer of senior management and key personnel between affiliated foreign and Irish entities up to a maximum period of five years.
Trusted Partner Initiative
Organisations granted Trusted Partner Status can expect a more streamlined process and faster turnaround time for employment permit applications.
Atypical Working Scheme
The Atypical Working Scheme provides a mechanism to deal with short-term employment where the individual is not eligible for an employment permit. The Scheme allows an individual to work in Ireland for up to 90 days. It is, however, important to note that a letter of approval issued under the Atypical Working Scheme will remain valid for 90 days from date of issue. If not used within that time, a fresh application will be required under this scheme and a new application fee will apply. The permission will only be valid for a 90-day period, and an individual must leave Ireland upon expiry of the permission.
Individuals from certain countries require a visa to travel to Ireland. There is a list detailing the nationalities who do not require a visa, which changes regularly. It should be noted that the granting of a visa is a form of pre-entry clearance only, granting permission to the individual to present oneself at a point of entry in Ireland to seek permission to enter the country. All visa applications must be made using the visa Online Application Facility and subsequently through the Irish Embassy/Consulate in the individual's country of residence. After an individual has arrived in Ireland and registered with the immigration authorities and obtained an Irish residence permit (IRP), there is no longer a requirement to obtain a multiple re-entry visa to enable them to travel. The only exception to this is children aged under 16.
An individual who requires a visa to enter Ireland and who intends to work while in Ireland must obtain an 'Employment Visa'. To obtain an Employment Visa, the applicant must be able to provide a copy of the relevant employment permit with one's visa application.
Following arrival in Ireland, non-EEA nationals who intend to remain in Ireland for more than 90 days must obtain an IRP by registering with the Irish Immigration authorities. The IRP is generally granted for a period of one to two years initially and may be renewed.