Finance Act 2012 updated and introduced a new SARP relief (special assignee relief program).
We have recently been involved advising clients on the implications of this relief.
The relief provides incentive to foreign companies and their employees and reduces employees salary from income tax for the first five years after relocation.
The main conditions are as follows:
Key details as follows:
1. employee arrives in Ireland during 01/01/2012 and 31/12/2014
2. applies to employees of companies incorporated and tax resident in a DTT country or tax info exchange agreement country
or associated companies such as Irish ones. The employee can therefore take up employment with associated Irish company and qualify
3.employee must have been employed by the relevant employer for the 12 months prior to arriving in Ireland and must perform substantial
duties here for 12 months. The relief applies for the first 5 years of the individuals residency.
4. employee must not have been tax resident in Ireland for any of the 5 years preceding the year of arrival
5. employees may also recover cost of one return trip for their family to home country and school fees up to € 5000 paid tax free
6. must be a minimum base salary of € 75,000 & 30 % of salary in excess of € 75,000 is excluded from Irish tax.
7. relief only extends to income tax, not USC or PRSI
8. certain remuneration excluded such as BIK, bonus payments, stock options etc
9. Cannot claim new SARP relief for any employee engaged in R&D activities, old SARP (relevant prior to 01/01/2012), new Foreign Earnings Deduction (applies to employees from BRICS countries only), cross border relief (only relevant if employee is commuting between two DTT countries , spends at least 1 day per week in Ireland and duties performed outside Ireland) or split year treatment (where employees income only from date of becoming resident here is liable to taxation)
If you would like advice on whether this would apply to you on relocation of your employees to Ireland then please see O’Mahony Donnelly Contact Details