Coming to Ireland - tax and social insurance

Information

Generally you will be charged Irish tax on your world-wide income earned or arising in a tax year during which you are resident, ordinarily resident and domiciled in Ireland for tax purposes.

For any tax year during which you are non-resident and not ordinarily resident in Ireland you will be charged tax on your income from Irish sources only. The extent of your liability to Irish tax may also be influenced by your domicile status and possibly by a double taxation agreement.

In addition to income tax, social insurance, known in Ireland as PRSI (Pay-Related Social Insurance), and a health levy - where applicable - are also deducted through the tax system by employers or paid to the Revenue Commissioners directly by the self-employed. The Revenue Commissioners have produced a booklet of frequently asked questions for those transferring residence to Ireland (pdf) which will be of assistance. Further information is also available below.

Residence status

Your residence status for Irish tax purposes is determined by the number of days you are present in Ireland during a given tax year. You will be resident in Ireland for a particular tax year in either of the following circumstances:

• If you spend 183 days or more in Ireland for any purpose in that tax year
• If you spend 280 days or more in Ireland for any purpose over a period of two consecutive tax years you will be regarded as resident in Ireland for the second tax year. However if you spend 30 days or less in total in Ireland in either tax years, those days will not be reckoned for the purpose of applying this test

A "day" for residence purposes is one on which you are present in Ireland at midnight

It does not matter if you come and go several times during that tax year or if you are here continuously. A count is made of the total number of days you spend in Ireland for any purpose in each tax year.

Effect of ownership of property

The ownership of property in Ireland will not make you resident for Irish tax purposes. However, this factor could be relevant in determining a single country of residence under a double taxation agreement where the other treaty country is also claiming that you are resident there.

Electing to be resident

Even if you have not spent the required total number of days in Ireland, you can, if you wish, elect to be resident for that tax year. A condition of making an election is that you must establish to the satisfaction of your local tax office that you will be resident here in the following tax year for the required number of days, under either of the tests. Once you have made such an election you cannot cancel it subsequently. As a resident you will be liable to tax on your world-wide income earned or arising during the entire tax year of your arrival in Ireland. Employment income however will be taxable only from the date of your arrival. An election may be made in writing to your local tax office.

Ordinarily resident

The term "ordinarily resident" as distinct from "resident" refers to your pattern of residence over a number of years. If you come to Ireland for the first time and remain resident for three consecutive years, you will become ordinarily resident from the beginning of the fourth year. Conversely you will cease to be ordinarily resident in Ireland having been non-resident for three consecutive years.

If you are ordinarily resident and with an Irish domicile all your Irish /foreign sourced income will be taxable in full. Exceptions are made for income from trade, profession,, office and employment, all the duties for which are exercised outside Ireland. In addition other foreign income, for example, invested income, is also exempt, provided it does not exceed a set amount in the tax year in which it is earned.

Domicile

Domicile is a concept of general law. Broadly it means residence in a particular country with the intention of residing permanently in that country.

Every individual acquires a domicile of origin at birth. A domicile of origin will remain with you until such time as you acquire a domicile of choice. However before a domicile of origin can be shed there has to be clear evidence that you have a positive intention of permanent residence in another country and have abandoned the idea of ever returning to live on your country of birth.

Taxation

Double taxation agreement

As a particular item of income can be taxable in both the country where it is sourced and also in the country in which you, as the recipient, are resident, Ireland has concluded a number of double taxation agreements with other countries in order to avoid double taxation. Double taxation agreements have been concluded with:

Australia, Austria, Belgium, Bulgaria, Canada, China, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, India, Italy, Israel, Japan, Korea, Latvia, Lithuania, Luxembourg, Malaysia, Mexico, Netherlands, New Zealand, Norway, Pakistan, Poland, Portugal, Romania, Russia, Slovak Republic, Slovenia, South Africa, Spain, Sweden, Switzerland, UK, USA, and Zambia.

If your income is taxable in Ireland and in a country with which Ireland has a double taxation agreement, a double charge of tax is prevented under the agreement by either:

• Exempting the income from tax in one of the countries, or
• Allowing credit in one country for the tax paid in the other country on the same income.

The precise treatment of your income will depend on the details of the particular agreement, the nature and source of your income and, in some cases, on your nationality /citizenship.

If the income arises in a country with which Ireland does not have an agreement, the amount of tax in Ireland will be the net amount received by you after the deduction of the foreign tax paid. There is no credit available for foreign tax paid against your Irish tax liability on the same income.

Income earned prior to moving to Ireland

If you are moving to Ireland for the first time or you are an Irish citizen returning to live in Ireland having been non resident and non ordinarily resident when the income was earned, the position will be as follows:

• Funds accumulated from income earned prior to the beginning of the tax year in the year that you become Irish resident will not be liable to income tax.
• However, income other than employment income arising between the beginning of the tax year and the date of your arrival will be taxable if brought into Ireland, unless a double taxation agreement provides for a different treatment.

If you are working in Ireland but are paid from abroad

Unless your income is relieved from Irish tax under the provisions of a double taxation agreement, it will be taxable here from the date of your arrival regardless of your Irish residence status for tax purposes. However, if you are an Irish citizen who is non-ordinarily resident or you are non-Irish domicile, your foreign employment income (excluding UK sourced income) will only be taxable to the extent that it is remitted into Ireland. If you are resident for Irish tax purposes in the year that the income is earned, you will be entitled to full personal tax credits and reliefs.

Temporary employment in Ireland

If you are coming to Ireland to take up temporary employment and will not become resident for Irish tax purposes, proportionate credits and reliefs are available to non resident Irish citizens and to citizens, subjects or nationals of another European Union Member State. This also applies to residents or nationals of a country with which Ireland has a double taxation agreement which provides for such allowances. The proportion of allowances is determined by reference to your income for the tax year which is subject to Irish tax over your income from all sources. However, residents of another Member State of the European Union are entitled to full personal tax credits and reliefs in respect of any tax year that 75% or more of their world-wide income is taxable in Ireland.

Social insurance

Your employer will also deduct social insurance contributions (known in Ireland as "Pay-related social insurance" or PRSI) from your pay which will help you to qualify for contributory social welfare payments such as Jobseeker's Benefit, Illness Benefit and State Pension (Contributory). The amount of your contribution will depend on your category as an employee. For example, most non-public sector employees pay "Class A" contributions, the precise rate depending on your earnings. It is important to find out more about moving to Ireland and your social security entitlements and get a general overview of the social security system in Ireland.

PPS (Personal Public Service) Number

In order to work, you require a Personal Public Service Number (PPS No.). You can obtain a PPS No. (or ask for your old number, if any, to be traced) at your local social welfare office. If you are a foreign national, you will need your passport or your certificate of registration and supporting documentation such as household bills. (Formerly, the PPS No. was known as your RSI No.).

Further information on how to obtain a PPS number is available from the Department of Social Protection.

Where to apply

Specific queries regarding residency and taxation of income earned prior to moving to Ireland should be addressed to Revenue here in Ireland.

Queries in connection with social insurance (PRSI) should be addressed to your local social welfare office here in Ireland, or:
.