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!
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.
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:
Associate companies connected to your employer may also be considered under SARP, but these companies will be subject to their own set of guidelines.
The conditions to qualify for SARP in Ireland are quite stringent, but are always worth investigating if you have arrived in Ireland for work between the tax years 2012 to 2022 (at the request of your employer). During Budget 2023, it was also announced that SARP is being extended to those arriving in Ireland (at the request of their employer) before 31 December 2025 — a welcome announcement for future expats.
Conditions that apply to you:
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.
For an employee receiving SARP, payments or reimbursements by the employer may also not be subject to tax. These can include:
Note: With any tax relief programme in Ireland, the policies associated with it 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.
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.
Where SARP relief is concerned, it is generally 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.
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.
DISCLAIMER The material in this article is for general information purposes only and does not constitute legal or taxation advice. Specific legal and taxation advice should be sought before acting or refraining to act. All information and taxation rules are subject to change without notice. No liability whatsoever is accepted by Expats Taxes for any action taken in reliance on the information in this article or any of the articles in our blog series