Remote Work in Ireland for an Overseas Employer | Expat Taxes

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October 20th, 2022
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Remote Work in Ireland for an Overseas Employer | Expat Taxes

Remote Working in Ireland for an Overseas Employer – Should You Pay Irish Tax?

Where tax as a remote worker is concerned, it’s easy to get confused. When you add a foreign employer to the mix, it can feel even more overwhelming! This is usually because when you work for a foreign company while based in Ireland, there are several tax considerations to take into account. 

With different tax rules between Ireland and the country that your employer is based in, finding a starting point for your research can be challenging. The good news? We’re here to help as much as possible!

If you’re a current or soon-to-be remote worker in Ireland looking for clarity on the tax system in Ireland, read on to hear our expert advice. 

Can my employer not tell me everything I need to know about tax in Ireland?

First thing first, no matter how well-versed in the Irish taxation system your foreign employer is, it’s vital that you understand how easy it is to overlook certain tax stipulations. 

As a remote worker in Ireland, you may expect that you as the employee are responsible for your own tax matters. However, your employer also has an obligation to register to withhold PAYE from your salary each month (in most cases). This is why it’s important for both you and your employer to be aware of the implications associated with having a remote worker based in Ireland.

In addition to this, while Ireland’s tax authority (Revenue) does their best to keep workers informed as much as possible, the amount of tax you pay in Ireland won’t have a ‘one size fits all’ definition. In Ireland, the amount of tax you pay depends on:

  • Which tax rate band you fall into
  • What tax credits are available to you (personal or otherwise)
  • What personal circumstances apply to you (e.g., how long is your stay, do you have property abroad etc.)

If you’re dependent on your employer to know exactly what tax you’ll need to pay in Ireland, we’d advise that you seek additional advice before assuming they have everything in hand.

As a remote worker in Ireland, am I even considered to be a tax resident?

Whether or not you are a tax resident in Ireland depends on how many days you are present in the country within the tax year. The general rule is that you are tax resident in Ireland (and therefore liable to paying Irish taxes on worldwide income/gains) if:

  • You are present in Ireland for 183 days or more in a tax year

Or

  • You are present in Ireland for 280 days or more in total (taking the current tax year and the preceding tax year into account)

This essentially means that if you are living in (or intend to live in) Ireland for the majority of the year, it is likely Ireland that you should be paying tax to. 

That said, this rule has its exceptions. For example, tax legislation can be difficult to navigate when it comes to remote workers who work as ‘digital nomads’ and don’t technically have a settled home in any country, particularly if they work in Ireland for short periods of time.

For digital nomads, not having a permanent home doesn’t absolve you from your tax liability. In this case, it is especially worth speaking to a tax expert who can guide you on which country you should be paying taxes to.

It’s also important to be aware of double tax agreements that Ireland has with other countries. Sometimes the terms of a double tax agreement means that you can work in Ireland for a certain period of time before you have to pay income tax on your employment income — something we’ll discuss more about this a little later!

Note: The tax year in Ireland is from 1 January to 31 December.

What if I move to Ireland to work remotely during the tax year?

If you’ve been working abroad and then move to Ireland during the tax year, you might be able to avail of split-year treatment.

This means that from the date you arrive in Ireland to work, you will be taxed through the Irish system from that point onwards. Split-year treatment must be requested through the Revenue website's myAccount feature, or through your local tax office.

What tax obligations does my overseas employer have?

Overseas employers with a remote worker in Ireland are obliged to register for PAYE withholding and deduct Irish tax from your salary. Your overseas employer must then pay this tax to Revenue on your behalf each month. 

In certain cases where the employee is only in Ireland for a limited amount of days, this tax deduction may not be necessary. However, this should always be checked with an Irish tax expert, or directly with Revenue first.

To avoid penalisation, your employer will need to:

  • Register with the Revenue Commissioners 
  • Keep a record of all tax payments made to Revenue on your behalf
  • Be on time with payments to avoid interest penalties

Some employers will be fine with this additional paperwork, but some might not be. This is why before moving to Ireland as a remote worker (particularly if the employer themselves hasn’t requested this move), it’s essential that they are aware of the implications of having a worker based in Ireland.

What if I only intend to work remotely in Ireland on a short-term basis?

If you are a remote worker and know that you will only be present in Ireland for a limited amount of days, your employer might be able to apply for an exemption to the ordinary tax rules that apply to workers based in Ireland. 

Deadlines for this application are strict and must be made directly to Revenue. Therefore, you should ensure that your employer is monitoring deadlines accordingly.

In the case that this exemption is awarded, the conditions through which it was granted must be adhered to. This means that if your circumstances change at any point, it is the responsibility of both the employee and the employer to make it known to Revenue.

What if my employer is also withholding tax from my previous country of residence?

In some cases, your employer might withhold tax from your previous country of residence. This might be for several reasons, some of which include:

  • You might only be stationed/working in Ireland for a short period of time
  • There is uncertainty about your current tax liability
  • You don’t yet have a permanent address in Ireland 
  • You or your employer don’t yet have your paperwork in order
  • There may be an ongoing withholding obligation in that country
  • You may remain tax resident of the previous country of residence

In some instances, you might be able to claim relief under the Double Tax Agreement.

Under the Double Taxation Agreement, if your income is taxable in Ireland and another country with which Ireland has a double taxation agreement, you do not have to pay tax in both countries (on the same income). This means you may get credit in one country for tax paid in the other or in some cases you may be eligible for a refund of foreign tax withheld from you. 

To view the full list of countries that Ireland has a tax treaty with, you can find a helpful search tool here.

Note: While the reasons for your employer withholding tax outside of Irish tax might be valid, this is again worth speaking to an expert about. 

Additionally, it’s also important to exercise caution where Double Taxation Agreements are concerned. It’s best to ask for expert advice before assuming that your tax matters are covered under a treaty with another country.

What if I’ve been assigned by my employer to work in Ireland

If you have been assigned by an employer to work in Ireland, whether temporarily or on a permanent basis, there are some important things that your employer should be aware of. 

Some of which include:

The time it takes to get set up with Revenue

This includes getting a social security number or ‘PPS number’ as it is known in Ireland. To get a PPS number, employees will be required to provide proof of address and a form of identification such as a passport.

The time it takes for tax paperwork to be processed

Getting set up with the tax system in Ireland can take time. This is why it’s always best to do your research as much as possible before your move.

Data protection/ GDPR 

As a remote employee, it’s essential that your data, and that of your company is protected. If your employer is particularly concerned about GDPR or security issues, it’s advisable that they set you up with a secure laptop to work from when you are in Ireland. 

Note: It’s also important that your foreign employer can provide access to employment records such as working hours and rates of pay. This involves being able to access records in the case of an inspection by the Workplace Relations Commission

(At all times, storage of these records should also adhere to GDPR guidelines. There are also other non-tax related issues to consider such as immigration requirements, insurance, health and safety legislation, employment legislation and more!)

How Expat Taxes can help:

If you’re a remote worker (or are about to become a remote worker), we can help you get set up with all of the tax information you need to start working in Ireland. 

If you’re an employer, we can also advise you on how to ensure you adhere to Irish tax laws and that your employees have a more seamless transition to working abroad.

We’re also happy to help with other tax matters, so book a consultation with us to alleviate all of your tax concerns.

Stephanie Wickham

Stephanie is an award-winning international and expatriate tax specialist with over a decade’s experience. She is a KPMG trained Chartered Tax Adviser and Chartered Accountant.

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