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UK/ Irish Ltd companies

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    #11
    Originally posted by TheCyclingProgrammer View Post
    I’m pretty sure the 183 day rule, so often misunderstood on here, is only relevant to determining if your tax resident, not if you are liable to Irish tax.
    Me too. Lots of UK contractors in Ireland seem to get away with it and are even advised that it's OK, but I am fairly sure that you must pay full Income Tax, PRSI and USC on all income arising from work undertaken in Ireland.

    Comment


      #12
      TCP and NLDUK - absolutely this.

      Technically, there is no 183 day "rule", its is part of the DTA article relating to income from employment and comprises 3 tests, all of which have to be satisfied in order for it to apply.

      Most contracting personnel who pass part a (days in country) go on to fail parts b and c, which relates to where and from whom was income derived.

      Comment


        #13
        So 'Rover and out' can expect a visit from The Revenue Commissioners, An Garda Siochana, INIS and The Republic of Telly?

        Comment


          #14
          Originally posted by stek View Post
          So 'Rover and out' can expect a visit from The Revenue Commissioners, An Garda Siochana, INIS and The Republic of Telly?
          And they'll make up a story and get Tusla in.

          In reality, they'll just get HMRC to collect, when they do the next audit of his client's contractor resources.

          Comment


            #15
            Out of interest, is there any amount of work you can get away with in another country without tax implications?

            For example, if I was to take on a client in another country, where I'm pretty much 100% working from home here in the UK, remaining resident here, but my client wanted me to come out to their office for a week as part of the project kick-off, or visit for meetings for a few days, would that expose me to tax liabilities in their country? Does it vary from country to country? Where does the line between working abroad (and it being taxable) and simply visiting your client for business purposes begin and end?

            I only ask because I've had some interest from a potential client based in Denmark. I've never had to deal with this issue before.

            Comment


              #16
              Originally posted by TheCyclingProgrammer View Post
              Out of interest, is there any amount of work you can get away with in another country without tax implications?

              For example, if I was to take on a client in another country, where I'm pretty much 100% working from home here in the UK, remaining resident here, but my client wanted me to come out to their office for a week as part of the project kick-off, or visit for meetings for a few days, would that expose me to tax liabilities in their country? Does it vary from country to country? Where does the line between working abroad (and it being taxable) and simply visiting your client for business purposes begin and end?

              I only ask because I've had some interest from a potential client based in Denmark. I've never had to deal with this issue before.
              There are times of course when you can work for a client and not incur taxation in the local country. It is important to understand the difference between a business trip and an assignment. A business trip is where work is done in the uk for a uk client, who asks you to attend a meeting or two in another country. Providing you are in the other country on behalf of the uk client, in furtherance of the uk work, and your services are not rebelled onto a foreign client, this would normally be a business trip. These are expected to be ad hoc, and for no more than 30 days, although there is no definite set time limit. For instance I work for a uk based company who pays my salary. Sometimes I have to travel for business, but I am performing my services for ipaye, not for the end client. My time is not rebilled and it is ipaye who benefits. This is a business trip.

              However if the work done overseas is for the benefit of the foreign end client, and/or they pay for your time/services, this is an assignment, and taxable in country from day 1.

              Obviously each set of circumstances is different and this is only guideline, before undertaking any international work the contract should be reviewed.

              Comment


                #17
                Every day is a learning day

                Originally posted by northernladyuk View Post
                Me too. Lots of UK contractors in Ireland seem to get away with it and are even advised that it's OK, but I am fairly sure that you must pay full Income Tax, PRSI and USC on all income arising from work undertaken in Ireland.
                After the points made by a number of posters I have taken another deeper look at the guidance.

                You are all correct in saying that:

                In general, any employment in a country for a client in that country is taxable from day 1.

                In general if you are not resident you only need to consider the income that is sourced in that country.

                If you become resident you need to consider worldwide income.




                However while residence is based on physical presence in the country.

                Most countries allow you to work for 30 days in each year without needing to consider tax.

                Also most countries allow foreign companies to temporarily post workers abroad and be considered outside of the local taxation regime.

                Ireland allows workers who are temporarily posted to the State to carry out up to 60 working days free of tax in an assignment.

                Ireland are also flexible in that any work carried out outside of the state e.g. teleworking, can be proportionally disregarded from taxation in the State.

                So those of you on a 3 month contract working for a UK Ltd need just carry on. If you are carrying out significant levels of teleworking the length of contract can be longer.

                I would suggest that this can be extended if you are lucky enough to work for a different Irish client on a new contract so long as their is a short gap between.

                I believe that while you are working for this foreign company you can continue to pay your social security through it and submit (if requested) a form (AS1) which does not require PRSI payment to the State.

                I believe the USC payments are only made through Irish entities.



                Source for the info on temporary assignments is Irish Revenue document sp-it-3-07 (Statement of practice 3 / 2007 )

                Comment


                  #18
                  Stand down

                  Originally posted by stek View Post
                  So 'Rover and out' can expect a visit from The Revenue Commissioners, An Garda Siochana, INIS and The Republic of Telly?


                  Inspector Kelly, you had better switch the engine off and come back into the office.

                  It's a false alarm, it is.

                  And can you see if you can get a refund on those air tickets as well.

                  Comment


                    #19
                    Did you read the whole document Rover and Out? Because i have just skimmed it and a few things jump out.


                    taken directly from this document

                    "4.1.2 The Irish PAYE System
                    It should be clearly understood that the Irish PAYE system is a system under which payroll deductions, including tax, are made at source and:
                    where an employer is released from the obligation to operate the PAYE system under the terms of this Chapter, it does not necessarily follow that the temporary assignee has no tax liability in this State in respect of his or her employment income, and
                    • where an employer is not released from the obligation to operate the PAYE system under the terms of this Chapter, it does not necessarily follow that the temporary assignee has a tax liability in
                    this State in respect of his or her employment income.

                    However, the terms of this Chapter are focussed on ensuring that, as far as is practicable, the release from the obligation to operate the PAYE system is granted to employers in circumstances where the employee will not have a tax liability in the State in respect of his or her employment
                    income. "

                    4.2 Temporary Assignees
                    4.2.1 Short term business visits to the State – not more than 60 working
                    days
                    Under the terms of the Employments Article of Double Taxation
                    Agreements (DTAs) between Ireland and other countries, the income
                    attributable to the performance in the State of the duties of an
                    employment may be relieved from the charge to Irish tax and where this
                    is the case the tax deducted under PAYE is refundable to the individual
                    from whose income the tax was deducted.
                    In certain circumstances, Revenue will not require an employer to operate
                    PAYE where, under the terms of a DTA, a taxing right on remuneration
                    paid by the employer is not allocated to this State. Revenue are prepared
                    to accept that employers need not operate PAYE on remuneration paid to
                    an individual where -

                    (a) the individual is resident in a country with which the State has a
                    Double Taxation Agreement and is not resident in the State for tax
                    purposes for the relevant tax year; and,
                    (b) there is a genuine foreign office or employment; and
                    (c) the remuneration is paid by, or on behalf of, an employer who is not a
                    resident of the State, and
                    (d) the remuneration is not borne by a *permanent establishment* which
                    the employer has in the State and,

                    (e) the duties of that office or employment are performed in the State for
                    not more than 60 working days in total in a year of assessment and, in
                    any event, for a continuous period of not more than 60 working days.

                    *Permanent Establishment* See appendix E
                    Note (1) As regards (c) above, Revenue, in line with OECD guidance
                    (commentary on Article 15 of the OECD Model Tax Convention on Income and on
                    Capital), is not prepared to accept, for the purposes of granting a release from
                    the obligation to operate the PAYE system, that the remuneration is paid by, or
                    on behalf of, an employer who is not a resident of the other State where the
                    individual is;
                    • working for an Irish employer where the duties performed by the
                    individual are an integral part of the business activities of the Irish
                    employer, or
                    • replacing a member of staff of an Irish employer, or
                    • gaining experience working for an Irish employer, or
                    • supplied and paid by an agency (or other entity) outside the State to work
                    for an Irish employer
                    Also, the release from the obligation to operate the PAYE system will not be
                    granted (i) simply because the remuneration is paid by a foreign employer and
                    charged in the accounts of a foreign employer or (ii) where the remuneration is
                    paid by a foreign employer and the cost is then re-charged to an Irish employer.
                    "


                    There is nothing here which makes me think that any work done in Ireland, whereby the cost is borne ultimately by an Irish resident client, would not be considered taxable in Ireland.

                    I am prepared to accept that there will always be exceptions however, the only authority who can discharge a liability to Irish Tax is the Irish Revenue. Full disclosure should be made to them, and give them the opportunity to confirm whether tax is due or not.

                    Comment


                      #20
                      Why, oh why ?

                      Originally posted by Sue at IPAYE View Post
                      Did you read the whole document Rover and Out? Because i have just skimmed it and a few things jump out.

                      There is nothing here which makes me think that any work done in Ireland, whereby the cost is borne ultimately by an Irish resident client, would not be considered taxable in Ireland.

                      I am prepared to accept that there will always be exceptions however, the only authority who can discharge a liability to Irish Tax is the Irish Revenue. Full disclosure should be made to them, and give them the opportunity to confirm whether tax is due or not.
                      Why then, in your opinion, was this quite extensive procedure on temporary assignments added to the guidance . For what purpose does it exist if not to grant a tax free situation for temporary assignees.

                      Comment

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