Covid 19 related concessions re benefit in kind and personal tax residency
Covid 19 related concessions re benefit in kind and personal tax residency

Covid 19 related concessions re benefit in kind and personal tax residency

In late December, Irish Revenue updated their guidance regarding various Covid-19 related concessions in relation to benefit in kind (BIK), cross border employment and tax residence due to a person’s force majeure presence in the State due to Covid-19. We have summarised the key points below.

  1. Benefit in Kind Concessions

Despite indicating that a number of the Covid-19 related BIK concessions would cease at 31 December 2020, in view of the current level 5 restrictions, Revenue have subsequently confirmed that concessions relating to the following will remain in place for the time being: 

  • BIK on provision of COVID-19 testing
  • BIK on facilitation of flu vaccination
  • BIK on employer provided vehicles
  • Use of company cars by employees in the motor industry
  • Payment of taxi fares by an employer
  • Small Benefit Exemption
  • BIK on employer provided accommodation

 Please refer to the current Revenue Guidance, linked above, for further information.

  1. Cross Border Employment Matters
  • Foreign employments exercised in Ireland

Revenue previously indicated that they would not seek to enforce Irish payroll obligations on foreign employers in genuine cases where an employee was working abroad for a foreign entity prior to COVID-19 but relocated temporarily to Ireland during the COVID-19 period and performed duties for his/her foreign employer while in the State. This concession has ceased and from 1 January 2021 employers are required to operate PAYE on such employments in the usual manner.

  •  Multi-state workers

In March, Revenue indicated that a foreign employer could continue to operate Irish payroll on the basis of a non-resident employee’s established work pattern pre-COVID-19 where:

  • the non-resident employee had been carrying out duties of a foreign employment partially in Ireland and partially in the foreign jurisdiction prior to COVID-19
  • the foreign employer had applied payroll taxes in the State and the foreign jurisdiction based on the established work pattern prior to COVID-19
  • the employee could not return to the foreign jurisdiction as a result of the travel restrictions imposed by COVID-19 and
  • the employee continued to carry out their duties of employment in Ireland.

This concessionary measure ceased on 31 December 2020. From 1 January 2021 employers are required to operate PAYE on such employments in the usual manner.

  • PAYE Exclusion Order - Irish Contract of Employment

In March, Revenue indicated that where employees who were working abroad for a foreign employer under an Irish contract of employment and where a PAYE Exclusion Order was in place, the position would not be adversely impacted where the employee worked more than 30 days in Ireland due to COVID-19. This concessionary measure ceased on 31 December 2020. From 1 January 2021 employers are required to operate PAYE on such employments in the usual manner.

  1. Residence rules - Force Majeure circumstances

On 23 March 2020, Revenue confirmed that where a departure from Ireland was prevented due to COVID-19, Revenue would consider this ‘force majeure’ for the purposes of considering an individual's tax residence position (i.e., such days spent in Ireland would not be considered when assessing the individual’s Irish tax residency position). Due to the unanticipated length of the pandemic, Revenue have updated their guidance in relation to this matter. This updated guidance needs to be considered in determining whether an individual was Irish tax resident in 2020 and the resulting impact on their Irish tax filing and payment obligations. Revenue’s guidance is as follows:

https://www.revenue.ie/en/corporate/communications/documents/covid-19-statutory-residence-test.pdf

  1. Summary

In view of the length of the pandemic, many of the concessionary measures initially announced by Revenue in March 2020 have ceased. We would recommend that any foreign employers with staff working in Ireland due to the pandemic reassess their Irish payroll tax obligations. Furthermore, individuals who spent additional time in Ireland in 2020 due to the pandemic now need to reconsider their tax residency position for 2020 and 2021 to assess whether they have Irish tax filing/payment obligations.

Please contact any member of our team if you wish to discuss further.



Please note: The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act upon such information without appropriate professional advice after a thorough examination of the particular situation.

Warren & Partners are a boutique Irish tax and business advisory firm based in Ballsbridge, Dublin. Our experienced-team of tax advisors will create unique tax solutions for your specific business needs.

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with our experts for Covid 19 related concessions re benefit in kind and personal tax residency

Anthony O’Callaghan
Anthony O’Callaghan

Senior Tax Manager

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Olga Miller
Olga Miller

Tax Director

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Sinead Scanlan
Sinead Scanlan

Senior Tax Manager

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