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