SARP is a relief provided by s825C TCA 1997 that can be claimed by 'relevant employees' who arrive in Ireland in 2020 to perform employment duties for the ‘relevant employer’ or an associated company of a relevant employer.
A “relevant employer” means a company that is incorporated and tax resident in a country that has concluded a Double Tax Agreement with Ireland. The employee can be assigned to an associated company of a “relevant employer”.
A “relevant employee” is an employee who was a full-time employee for 6 months before arriving in the State and who comes to Ireland to perform duties of his employment for an associated company of the relevant employer.
The minimum period of employment in Ireland must be for a consecutive period of 12 months and additionally the employee must not have been resident in Ireland for 5 tax years before arriving in Ireland. The employee must be tax resident in the year of the claim (or can elect to be so). Within 90 days of arriving in the State the employer is required to complete the required form (SARP 1A) and submit it to the Revenue Commissioners. The employee must be in receipt of ‘relevant income’ of at least €75,000 (annualised income) which is base salary (ignoringbonuses, share based payments or benefits-in-kind).
The relief operates such that 30% of salary and taxable benefits above €75,000 are disregarded for tax purposes (i.e. income tax is not due on this portion of taxable income). Universal social charge and PRSI still arise on the income.
The relief is available for 5 consecutive tax years commencing with the tax year for which the relevant employee is first entitled to relief under this section.
The employer can apply to Revenue for authorisation to grant SARP relief at source via payroll.Additionally, the employer must complete and file a SARP Annual Return. The Annual Return must be made on or before 23 February after the end of each tax year.
Additionally, in years which an eligible SARP claim can be made an employee is entitled to be provided with the reasonable costs associated with one return trip from the State to the country of which they are a national.
Where relief under this section is claimed the employee is required to lodge an income tax return in that year.
If you want to know more about SARP and whether you or your employee may qualify for this relief, get in contact with us.