Moving to Ireland comes with the legal responsibility to pay taxes to the Irish authorities. Liability to taxation depends on the residency status you hold.
Ordinary residence
Ordinary residence is conferred to individuals who have been resident in Ireland for three years. it's only from the fourth year onwards that one would be considered resident in Ireland. In the same manner, this status can also be nullified after one has been non-resident in Ireland for three consecutive tax years.
Residency for tax purposes
To be accountable for tax in Ireland, you have to spend a minimum of 183 days in the country. Being present in Ireland for 280 days and above within two consecutive tax years will qualify you for tax residence in the second year.
Electing to be resident
It is possible to elect to be recognized as a resident in Ireland in a particular tax year. Conditions for an election is that one has to commit to meeting the requirements for tax residence in Ireland in the following year.
Domicile in Ireland
It’s possible for expatriates to make Ireland their domicile country of choice. A domicile is a country in which you intend to live in permanently, it can be different from your country of citizenship and residency. Ireland offers this option, however, there is a domicile levy.
Property ownership in regards to taxation
Irish tax laws dictate that property ownership does not qualify one for residency in Ireland. The ownership of property in Ireland is however taken into consideration when resolving a situation of double taxation arising with a country having a double taxation treaty with Ireland.
Taxation
Having residency or domicile in Ireland makes your income liable to Irish taxes. Fortunately, Ireland is a signatory to a number of treaties, therefore, you can avoid double taxation. For individuals who have not been resident ordinarily or for tax purposes in Ireland, money from income generated before one attains the residency status is not liable to income tax in Ireland. If the income concerned arises from means other than employment and was generated between the commencement of the Irish tax year and your arrival in Ireland, it is regarded as taxable income. This only applies outside of a double taxation treaty.
Foreign sourced employment income is taxable when one is resident in Ireland. Those not ordinarily resident or domiciled in Ireland are only liable to taxation if the funds are received in Ireland. Foreigners undertaking temporary employment in Ireland are not liable to taxation on their income and they can claim tax credits and reliefs.
Social Insurance
Irish authorities impose a Pay Related Social Insurance to be deducted on employee’s salaries by the employer. These social insurance contributions make it possible for the employee to qualify for State Pension and Jobseeker’s benefit amongst other crucial social benefits. The going rate on social insurance deductions is dependent on one’s earnings.
Personal Public Service Number (PPS number)
A Personal Public Service Number is required when one takes up work. PPS numbers can be granted by local social welfare offices and the Intreo Centre as well. For foreign workers, a passport or a GNIB certificate of registration will be needed in order to be issued a PPS number.
For more details and assistance regarding working in Ireland and taxes, reach out to our expert consultants. Our highly experienced and well-informed team is ready to answer all your questions and give you all the help you might need.
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