The special assignee relief program may apply to employees assigned to Ireland for a period of at least a year. The relief is available for up to 5 consecutive years for persons who are required by their existing employer to work in Ireland between 2012 and 2020 for a period of at least 12 months.
It is available to Irish domiciled and non-Irish domiciled employees. They may be employed under an Irish or non-Irish employment contract.
Individuals who qualify may exclude 30% of employment earnings over €75,000 from the Irish tax charge. Individuals may receive tax-free payment or reimbursement of reasonable costs for one return trip to the home country and for school fees up to €5000 per annum per child subject to conditions. Approval of the Revenue authorities is required
The employee concerned must
- have a salary of at least €75,000
- bee tax resident in Ireland (but may also be tax resident elsewhere
- be employed full-time for at least six months prior to arrival by a relevant employer
The employer must be incorporated and resident in a country with which Ireland has a double taxation or information exchange agreement. The employer must certify to the Irish Revenue within 30 days of arrival that the conditions have been complied with.
There are conditions as to earnings applicable to the base salary and the income in respect of which 30% exclusion applies. There are reporting obligations. Certain other reliefs are not available. The income is subject to pay related social insurance and universal social charge without relief
Cross Border Relief
There is a special cross-border relief which gives relief from income tax and universal social charge to individuals who reside in Ireland, work outside Ireland in qualifying employment outside Ireland, is not subject to Irish income tax provided that income tax has been paid abroad.
Conditions apply. The employee must be present in Ireland for at least one day in Ireland in each week during which he or she works outside Ireland
The employee must be Irish resident and have earnings from an employment outside Ireland in a country with which Ireland has a tax treaty for a continuous period of 13 weeks in a tax year. The qualifying employment must be exercised outside Ireland with any duties performed in Ireland being merely incidental and be subject to tax in the other jurisdiction which must be paid and not qualify for repayment.
The relief is not available to
- earnings from employment which are subject to the remittance basis of tax
- payments to a proprietary director (15% capital test)
- earnings from Irish state government semi-state employment
The effect of the relief is that the income tax liability before credit for foreign tax is reduced proportionately to the percentage that total income other than the qualifying income abroad bears to total income in the relevant tax year.
Emerging Market Incentive
The foreign earnings deduction was introduced in 2012 to incentivise companies to expand into emerging markets. It provides for a reduction in an employee’s income tax liability by apportioning his income by reference to the number of qualifying days worked in the relevant country abroad over the total number of days of employment. The reduction is subject to a maximum €35,000.
At present, the programme applies to 2020. It applies where a person spends more than 30 days in one of the nominated countries. Periods must be at least three consecutive days working in those countries.
The countries concerned are
- South Africa
- the DR Congo
- can you
- South Korea
- United Arab Emirates
- Saudi Arabia Qatar
- Malaysia Mexico