If you have been assigned to work in Ireland by your employer, tax might seem like the least of your concerns. With the relocation process and a whole new working environment to navigate, researching tax relief might fall down on your list of priorities.
For every employee moving to Ireland, regardless of the circumstance, we always advise considering any tax relief programmes that might be available to you. Even though it might seem like just another task to add to a very long to-do list, completing this task could actually save you money!
For those coming to Ireland from abroad because of work, the Special Assignee Relief Programme (SARP) is definitely one worth looking into. This relief is aimed at employees who are stationed in Ireland by their current employer and who will continue to work for the same employer from the Irish State.
If this sounds like you, read on!
What conditions apply in order to qualify for SARP?
As with most tax relief programmes in Ireland, certain conditions must be met before you can qualify for such relief. To qualify for SARP in Ireland, there are several requirements that apply to both the employee, and the employer.
Conditions that apply to your employer
Firstly, the employer who has assigned you to work in Ireland must be considered as ‘incorporated and tax resident’ in a country with which Ireland has either:
- A double taxation agreement
If you are working for an associated company connected to your employer you may also be considered under SARP (e.g. a subsidiary of your previous employer).
Conditions that apply to you
The conditions to qualify for SARP in Ireland are quite stringent, but are worth investigating if you have arrived in Ireland for work between the tax years 2012 to 2022 (at the request of your employer). Conditions include:
- You must have worked outside of Ireland for a minimum of 6 months before your immediate arrival to the Irish State, working for the same employer who has requested your relocation
- Your duties for your employer must last for a minimum of 12 consecutive months from the time you begin work in Ireland
- You have not previously been tax resident in Ireland for the 5 tax years preceding your arrival
- You are tax resident in Ireland for all of the years you claim relief
- You earn a minimum basic salary of €75,000 per year (this excludes bonus payments or other additional payments to your basic salary)
How can I tell how much relief I am due?
If you qualify for SARP, a certain amount of your employment earnings will be subject to relief from Income Tax (IT). For example, for the year 2019, this equated to 30% of your income over €75,000 (and up to a limit of €1,000,000). However, this only applied if you commenced your employment duties in Ireland on or after January 1st 2019.
If you commenced your employment duties prior to this (December 31st 2018), the upper limit of €1,000,000 generally only applies to your earnings from 1 January 2020 onwards.
This distinction might sound complicated, but it’s primarily due to changes made to SARP in the Finance Act 2018. Despite being first introduced in 2012, amendments have been made since then.
In 2020, it was announced that SARP would be extended for a further 2 years, until December 2022. Though no official announcement has yet been made, it is hoped that SARP (or a reformed version) will be made available beyond 2022. This is to be confirmed in the upcoming Budget 2023.
For an employee receiving SARP, payments or reimbursements by the employer may also not be subject to tax. These can include:
- Costs associated with one return trip for the employee (and potentially their spouse and/or children) between employment locations
- The cost of school fees (not exceeding €5,000 per annum for each child) paid to a school established in the State of Ireland
Note: With any tax relief programme in Ireland, the conditions to be met to qualify can be amended at any time. This is why it’s so important to always research the most up-to-date conditions associated with a certain programme or scheme.
How can I apply for SARP relief?
To apply for SARP, it is up to your employers to send a Form SARP 1A to the Revenue Office. This must be done within 90 days of the employee arriving in Ireland to continue their employment. It is very important this deadline is adhered to or the application may be rejected.
Previously, a SARP application could only be filled in within 30 days of the employee arriving in Ireland. This is no longer the case. Because of this, it is vital that you check the most recent times for application deadlines.
How do I receive SARP relief and for long can I avail of it?
SARP relief may be granted through your company’s payroll system or directly through your employer. If not, you can also make a claim for the relief at the end of the tax year.
Under SARP, you can generally claim relief for a maximum of five consecutive years. This starts from the year that you are first entitled to the relief.
If entitled to SARP relief, your employer will need to make an annual return to Revenue that is specific to the relief. While some employers will be more used to handling taxation documentation than others, any uncertainty regarding the forms that need to be filed can result in deadlines being missed. This is why it’s imperative to keep all documentation in order and to have enough personal knowledge of SARP to know when your employer might be missing something.
Note: A return of income for each year you claim the relief must be filed. I.e. if you receive SARP you must lodge a Form 11 tax return in that year.
Some things to keep in mind:
With tax relief programmes such as SARP, the key is to be organised. Particularly with SARP, the relief can benefit you as soon as you arrive in Ireland if you have everything correctly in place.
While most tax relief programmes won’t be available to apply for until you’re already in Ireland and set up with Revenue, getting expert advice on the subject before you travel can save a lot of time, money and energy later.
If your boss is discussing the topic of a relocation to Ireland, you might want to speak with us directly about your options. We offer consultations where we evaluate your situation and offer targeted advice based on this. Many of our clients are surprised to hear about the relief that they’ll be entitled to, so it’s always worth speaking to one of our experts who can talk you through your next steps.
If you’d like to discuss a tax-related matter other than SARP, you can contact us through our online form for more information.
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