Tax residence and domicile in Ireland

Residence for tax purposes

Your residence for tax purposes depends on the number of days that you are present in Ireland during a tax year (A tax year means the period from 1 January to 31 December).

You are resident for tax purposes for a year if:

• You spend 183 days or more in Ireland in that year from 1 January – 31 December 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.

For tax years up to 2008, each day you are present at midnight counts as one day in the calculation of residency for tax purposes. From tax year 2009 onwards, the midnight rule no longer applies, and you are treated as being present in the State, if you are present in the State at any time during that day.

Electing to be resident for tax purposes

If you arrive in Ireland in a particular year but are not present for the required number of days, you may elect to be resident for that year provided that you will be resident in the following year. Contact your local tax office for details.

Ordinary residence

Your pattern of residence over a number of years is taken into account to decide your ‘ordinary residence’.
If you have been resident for the previous three 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 three continuous tax years.

Residence and married couples or civil partners

For a married couple or civil partners, the residence status of each spouse is assessed independently of the other so it is possible for one spouse or civil partner to be resident and the other to be non-resident. If your residence status differs from that of your spouse or civil partner, you can choose to be treated as single people for tax purposes if it is more beneficial.

If you are resident and employed in Ireland but your spouse or civil partner is not resident in Ireland and has no income - so that your earnings are the only source of income - then it may be possible to claim the Married or Civil Partner's Tax Credit and the increased tax rate band.

What is domicile in Ireland?

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 is usually the domicile of your father unless your parents have not married or you live with your mother only. This provision is set down in Irish law in the Domicile and Recognition of Foreign Divorces Act 1986.

This domicile can be changed to a domicile of choice, if you move to a different country with the intention of living there permanently.

New Irish domicile levy

A new Irish domicile levy was introduced in 2010. This levy applies regardless of where you are tax resident. The levy is charged on an individual:

• Who in any year is Irish domiciled and an Irish citizen
• Whose worldwide income in the year exceeds €1m
• Whose Irish located property in the year is greater than €5m, and
• Whose liability to Irish income tax for the year is less than €200,000

The levy is €200,000 and is payable annually. Any Irish income tax paid by you in a tax year is allowed as a credit when calculating the amount of domicile levy due for that year. The levy is payable each year on or before 31 October in the year following the valuation date (on a self-assessment basis). The valuation date is 31 December each year. The levy for the year 2011 is, therefore, due and payable on or before 31 October 2012. You can get more information about the domicile levy from the Revenue Commissioners.

Budget 2012: The citizenship condition for payment of the levy is being removed in 2012. This will mean that liable non-residents will not be able to avoid the levy by changing their citizenship status.

Tax implications

Residence and domicile are taken into account for a number of taxes including income tax, Deposit Interest Retention Tax, gift tax, inheritance tax and Capital Gains Tax.