Foreign Subsistence Rates - Irish Contractor Trading with Ltd Co.

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clonjess

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Hi - can the foreign subsistence rates be used for long periods of time ie. 5+ months of continuous work abroad or are they only daily rates which can be used for short stays abroad?
 
Different rates apply depending on how long you stay.
Chapter and verse is here: http://www.revenue.ie/en/tax/it/leaflets/it54.html

..and some cut and pasted from the relevant bits


Schedule based on current Civil Service Subsistence Rates for absences outside the State
Details of quantum of Civil Service subsistence rates for certain foreign countries are available from any Regional Revenue Office.

The Civil Service schedule of rates may be applied in the following manner in respect of temporary (up to six months) absence:

Civil Service rates
Period of Assignment Abroad % of Subsistence Rate for relevant location
First month 100%
Second and Third month 75%
Fourth, Fifth and Sixth month 50%
The rates may be used only in respect of the reimbursement of allowable subsistence expenses where the employee is working abroad on a foreign assignment. "Working abroad" on foreign assignment” means that the employee is actually performing the duties of the employment abroad for a temporary period. Where actual vouched expenses exceed the flat rate allowances such vouched expenses may be used instead of flat rate allowances.

Long term Absences
For long term absences (where assignment period is greater than six months), reimbursement of allowable subsistence expenses may be made in the following manner:

allowable subsistence expenses
Period of Assignment Abroad Allowable Subsistence
First month of assignment (to facilitate the employee obtaining self catering accommodation) Up to the Overnight Rate
Remainder of Assignment Up to the cost of reasonable accommodation plus 50% of the day rate (10 hours) for the location
 
clonjess said:
Hi - can the foreign subsistence rates be used for long periods of time ie. 5+ months of continuous work abroad or are they only daily rates which can be used for short stays abroad?
Click to expand...

I think you need to provide a bit more information about your situation in order to get a reasonable answer... Where is the company located? What country are you working in?

For example if you are employed by an Irish company, you can spend up to three months on business trips to another EU country in a twelve month period, beyond that you need to obtain a permit and that permit will determine your status for tax purposes.
 
If you travel every week Monday to Friday then is that considered long term stay or regular short term visits?
 
Is there any update on this clonjess. I'd like to know if you got any more info
 
NumberCrunchr above is correct in his outline of the rules with IT54 and the foreign sub rates. To answer the question about can the Foreign sub rates be used for long period abroad you have to first understand the rules governing the use of the foreign sub rates.

Using the foreign subsistence rates is only a 'practice' that the Revenue have (coming from IT/2/2007- google that to get the SOP). If you we actually to go down to level of the legislation (S114 TCA 97) you will find that there is no mention of these rates for the private sector. That leaves the Revenue and the private sector with only guidelines instead of definite rules. Therefore in practice the taxpayer is pretty much left to the whim's of the Revenue deciding officer/Revenue auditor. What I have seen in practice is once the 'period of assignment' abroad is temporary then the length of time the foreign sub rates can be used is (within reason) open ended.
For example, if the contractor is an engineering contractor and went to GSK in Belgium to work to build their new plant, as the job has a clear end and will not turn into an open ended assignment the Revenue would accept the foreign rates for the duration of the assignment.

PM me if you want to discusss further.
 
As it happens DPK, I am off to GSK Belgium on a bit of an open ended placement. It could be 4 months, it could be 4 years, it is difficult to tell.

I am aware of the IT54 guidelines and the rate changes after the 1, 3 and 6 months. However the question I have is, what rate do you actually use. What is the correct subsistence rate for that particular location.

I will be flying home every weekend so I will probably go the cheap hotel route as opposed to renting a place as a really dont know how long I will be there.

Any help would be greatly appreciated.
 
GSK Belgium for a few months work

Hi I came upon this thread when i was googlin looking for revenue definition of continuous absence expenses.

Its probably too late but the best thing you can do is get out of the irish tax system altogether while you are in Belgium. ie pay tax locally to the Belgium govnt.Invoice from anywhere but ireland. I understand belgium are a lot more amenable to paying an expenses allowance for the purposes of flying back to ireland for family visits etc. (4000 a month?) Revenue are not amenable to this and have demonstrated this in their witchhunt against 1 man company contractors and the fact that they are disallowing all travel and subsistence expenses even for shortterm contracts within the state.

If you are going to GSk Belgium (and I know that site myself, having contracted there), do not invoice via Ireland limited company! ireland revenue loses the money, belgium government gains it. you are working in their country, they are more amenable to giving generous expenses to go back to ireland regularly.
 
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