Coming to Ireland - tax and social insurance

Introduction

Your liability for tax in Ireland can be affected by whether you are resident in the country and whether Ireland is your permanent home. There is a specific definition of residence for tax purposes depending on how many days you spend in the country. If you are not resident in a particular year, you can still be ordinarily resident in Ireland since this term refers to the country where you are usually resident over a number of years. The country that is your permanent home is known as your domicile. You can find more information in our document about tax residence and domicile.

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 - see below.

In addition to income tax and the Universal Social Charge, social insurance, known in Ireland as PRSI (Pay-Related Social Insurance), is also deducted through the tax system by employers – see ‘Social insurance’ below. Self-employed people pay them directly to Revenue. You can find more information about this in the Revenue guide for those transferring residence to Ireland.

Residence status

You will be resident in Ireland for a particular tax year if:

  • 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 2 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

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. An individual is present for a ‘day’ for residence purposes if he or she is present in the State at any time during the day.

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.

Ordinary residence

If you have been resident for the previous 3 tax years then you become ordinarily resident from the start of the fourth year. If you leave the country, you will continue to be ordinarily resident until you have been non-resident for 3 continuous tax years.

Domicile

Your domicile is the country where you live with the intention of remaining there permanently. It may be different to your residence or nationality. When you are born, you have a domicile of origin. This domicile can be changed to a domicile of choice, if you move to a different country with the intention of living there permanently.

Domicile levy: Since 2010 there is a Irish domicile levy. You can get more information about the domicile levy from Revenue.

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 a number of double taxation agreements with other countries in order to avoid double taxation. There is a list of the double taxation agreements that are in effect on revenue.ie.

If your income is taxable in Ireland and in a country with which Ireland has a double taxation agreement, you do not pay tax in both countries on the same income 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 or citizenship.

If the income arises in a country with which Ireland does not have an agreement, the amount of tax paid in Ireland will be based on 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 and you were not resident or 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 resident in Ireland 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 not liable to 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 not ordinarily resident or you are not Irish domiciled, 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 EU 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.

Pensions and other assets are normally taxable apart from some exceptions, for example, some UK pensions.

Social insurance

Your employer will also deduct social insurance contributions, which are referred to as PRSI (Pay Related Social Insurance), from your pay. They 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 employees pay Class A contributions, the precise rate depending on your earnings. You can read more about moving to Ireland and your social security entitlements and get a general overview of the social security system in Ireland.

Personal Public Service Number

In order to work, you require a Personal Public Service Number (PPS number). You can obtain a PPS number (or ask for your old number, if any, to be traced) at your local social welfare office or Intreo centre. If you are a foreign national, you will need your passport or your GNIB certificate of registration and supporting documentation such as household bills.

Where to apply

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

Queries in connection with social insurance (PRSI) should be addressed to your local social welfare office or Intreo centre.

Queries about getting a PPS number should be addressed to the Client Identity Services of the Department of Social Protection using the secure online request form or by phone at 1890 927 999 or (071) 967 2616.

Page edited: 25 March 2014