Expatriate tax ebook - Ireland
What taxes?
Capital gains tax
Inheritance, estate and gift taxes
Investment income
Local taxes
Real estate taxes
Social security taxes
Stock options
Wealth taxes
Other specific taxes
Capital gains tax
The remittance basis of assessment currently only applies to the proceeds of foreign gains (i.e. Irish and non UK).
Inheritance, estate & gift taxes
A liability to Irish inheritance and gift tax (capital acquisitions tax, CAT) depends on the individual's Irish tax residence and domicile position.
There is usually a requirement for a non Irish domiciled individual to have resided in Ireland for a certain period before a charge to Irish CAT arises. Where the asset concerned is considered to be an Irish asset, a charge to Irish CAT will arise.
Investment income
The expatriate's Irish tax residency and domicile status will determine whether investment income such as interest, dividends etc, will become liable to Irish income tax.
Local taxes
There are no local taxes applied to an individual in Ireland, but there may be a requirement to settle council charges for water and refuse maintenance.
Real estate tax
Stamp duty is the tax that functions as a real estate tax in Ireland. Stamp duty is applicable to any written document transferring property. As the sale of real property must be in writing, it always applies to transfers of real property. Stamp duty is levied on the consideration passing for the transfer of the land.
The rate of stamp duty applied depends on the level of consideration passing. For residential property, the first €125,000 is exempt with the next €875,000 levied at a rate of 7% with any amount over €1,000,000 levied at 9%. There are various reliefs for residential property transfers. A first time buyer is an individual that does not have an interest in any residential property anywhere in the world. An owner occupier is a person who purchases a house which is to be occupied by the purchaser, or a person on his behalf, as his only or principal place of residence and no rent, other than rent under the rent-a-room scheme, is derived from the property for a period of two years from the date of the purchase. There is a complete exemption for first time buyers on the acquisition of either new or second hand residential property. There is an exemption from stamp duty for owner occupiers of new properties under 125 square metres and a partial exemption where an owner occupier purchases a new property that is greater than 125 square metres.
Social security taxes
Where duties are performed in Ireland, generally a charge to Irish social security (PRSI) will arise. The expatiate will be treated as an employee and subject to PRSI at 4%. There is also an additional liability to a health levy charge at 2% (or 2.5% where income exceeds €100,100) bringing the total cost of social security for the expatriate to 6% (where income exceeds €100,100, 6.5%) . The employer will also be required to contribute 10.75% of the relevant income and benefits to Irish PRSI. PRSI must be collected at source along with payroll taxes.
Where the expatriate is transferring from an EU jurisdiction, and holds the relevant documentation, an exemption to Irish PRSI will apply. (subject to a maximum consecutive period of five years)
Where the expatriate is transferring from a jurisdiction outside the EU with which Ireland holds a bi-lateral agreement and the expatriate holds the relevant documentation; an exemption to Irish PRSI will apply. (subject to the relevant time limits)
Where the expatriate is transferring from a jurisdiction that does not fall into one of the above categories, the Irish rules will determine their liability.
Stock options
Ireland has a number of approved and unapproved scheme structures. The tax advantages of approved schemes are generally the deferral of the tax charge and a charge to capital gains tax, rather than income tax.
Ireland generally 'attaches' the charge according to the residence status of the expatriate at the time of the grant of the option. However, if the expatriate is non resident when granted options, they may still be liable to a charge at sale if they are resident in Ireland at that time.
With effect from 5 April 2007, individuals who are non Irish resident at the date of grant may now have a charge to Irish income tax at the date of exercise. The tax liability is calculated on the portion of the gain attributable to the performance of duties in Ireland. This new rule applies to unapproved options granted on/after 5 April 2007. The tax liability must be paid to the Irish Revenue within 30 days of exercise accompanied with a form RTS01.
Wealth tax
There is no wealth tax in Ireland
Other specific taxes
There are no other specific taxes relating to expatriates in Ireland.
Information about Ireland:
Last updated 6 May 2008
This publication is provided for general information purposes only and is not a comprehensive or complete statement of the issues it relates to. It should not be used as a substitute for advice on individual cases. Before acting or refraining from acting in particular circumstances, specialist advice should always be obtained. No liability can be accepted by Grant Thornton for any loss occasioned to any person acting or refraining from acting as a result of any material in this briefing. Grant Thornton is authorised by the Institute of Chartered Accountants in Ireland to carry on investment business.
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Contact us
For further information on expatriate tax services in Ireland please contact Frank Walsh.