Tax Considerations for Foreign Employers Locating to Ireland

Tax Considerations for Foreign Employers Locating to Ireland

By |2019-07-31T10:02:05+00:00June 7th, 2019|Latest News, News|

Permanent Establishment (‘PE’)

A permanent establishment may be created by a presence such as an ‘office’ or place of management.

When a foreign employer sends an employee to carry out certain duties in Ireland, one must consider if the employee’s presence could give rise to an ‘office’ or presence in Ireland.

Overall, whether or not a PE arises in Ireland generally depends on the activities being performed by the worker or workers located here, as certain low value auxiliary services should not create a PE.

SARP Relief

If you are locating to Ireland for the first time or returning from a period away, Special Assignment Relief Program may apply to you.

Where certain conditions are satisfied, including being a non-Irish resident for five tax years preceding arrival in Ireland, then an employee can make a claim to have 30% of his or her income between €75,000 (lower threshold) and €500,000 (upper threshold) disregarded for income tax purposes.

The employee needs to be assigned by their relevant employer to work in Ireland for that same employer (or for an associated company of that relevant employer).

Temporary assignees

Irish payroll taxes PAYE may not apply to temporary assignees working in Ireland and employed by a foreign entity. This will depend on the length of time the employee spends in Ireland and where the assignee is resident.

In general, where an employee’s role requires to be in Ireland less than 60 days, an Irish payroll obligation should not arise on a foreign employer from a Double Taxation Agreement (DTA) country. For foreign employers from non DTA countries, this time limit is 30 days.

However, if the employee is required to, or in fact, spends more than 60 days (but less than 183 days) in Ireland, the foreign employer should register for Irish payroll and obtain relevant approval from Revenue to not operate Irish payroll.

You should note that an Irish payroll obligation does arise if the employee spends more than 183 days in Ireland.  Irish payroll advice should be obtained in all cases.

We work closely with our international Baker Tilly network to ensure our advice covers all potential double tax issues and offer international groups the necessary local knowledge. If you are a business with a global work force looking to establish in Ireland, we would recommend you speak to us.

You can learn more about Baker Tilly’s Tax Manager, Paul Hegarty, by visiting his LinkedIn profile here.

Also Read: Employee Global Mobility: Brexit and Non-Irish Domiciled Status

About the Author:

Paul Hegarty