We recently published the following infographic which may be of interest to non-resident landlords.
Click the link below for more tips on how to minimise your Irish tax liability if you are a non-resident landlord.
What is the process for lodging your tax return if you are a non-resident landlord?
- The tenant is technically required to withhold 20% of the rent from the landlord where the landlord is non-resident in Ireland.
- However, if a collection agent is in place, then the tenant does not have to withhold from rent payments. The rent can be paid gross.
- The collection agent is accountable to the Revenue Commissioners for tax due on the rental income and also is required to lodge a tax return annually.
- In practice the collection agent usually withholds a portion of the rent to cover the tax liability to manage the risk.
- The collection agent is set up under a separate PPS number for the collection activity.
- The tax due is payable when the tax return is lodged and can be paid from an account nominated by the collection agent.
- Tax returns are due annually every October.
Changes to the process in 2020
On the tax return (Form 11) it is now necessary to indicate whether a collection agent is in place OR whether the tenant is withholding 20% from the rent (this was not the case on previous tax returns so this is essentially the change in practice for 2020 onwards). This means that if a tenant is not withholding tax then a collection agent must be appointed.
So basically it is possible for estate agents to:
- act as collection agents;
- apply for a PPS on behalf of the client;
- withhold a portion of the rent to cover the tax; and
- engage the services of an accountant to prepare the tax returns on behalf of clients
If you act as a collection agent for your client you can engage a third party provider (such as Expat Taxes) to prepare the tax returns for your clients. The obligation to lodge the return rests with you as collection agent (albeit it is the landlord's return).
Contact us if you would like more information on how to meet your obligations as a non-resident landlord or a collection agent.