The extent of an individual’s liability to Irish income tax depends on:
- whether he/she is tax resident in Ireland;
- whether he/she is ordinarily tax resident in Ireland; and
- whether he/she is domiciled in Ireland.
Your residence status for tax purposes is determined by the number of days that you are present in Ireland in a tax year. You will be resident in Ireland for a tax year in either of the following circumstances:
- If you spend 183 days or more in Ireland during a tax year or,
- If you spend 280 days or more in Ireland over a period of two consecutive tax years, you will be regarded as resident for the second tax year. For example, if you spend 140 days here in Year 1 and 150 days here in Year 2, you will be resident in Ireland for Year 2.
Income and gains from the period before an individual moves to Ireland can be brought in to Ireland entirely tax free. This can help fund any expenditure whilst based in Ireland tax efficiently. There are also various reliefs such as Split-year residence, Cross-border workers relief and Seafarers allowance which can minimise the exposure to the charge of Irish Income tax on a persons income.
A new Special Assignee Relief Programme (SARP) was introduced in Finance Act 2012 is to assist multinational and Irish companies in attracting key high income talent into Ireland by reducing their level of taxable income here by up to 30%.
As part of a measure to develop and promote Irish exports, recent Finance Acts have introduced an income tax relief called the Foreign Earnings Deduction (FED). The FED will apply to Irish tax resident individuals working in certain countries up to 2014. The relief operates by granting a tax deduction against the individual’s income tax liability where certain conditions are met.