# What determines a "Permanent Establishment" in Ireland? UK based IT contractor.



## jambuie (18 Jan 2011)

What determines a "permanent establishment" for a business in Ireland?

I'm a UK IT contractor, with a UK Ltd Company of which I am the sole director.  I have the possibility of a contract in Dublin, working 3 days a week there and two days from home in the UK.  I would be billing the Irish client company directly from my UK company.

The Double Taxation Treaty between Ireland and the UK would seem to suggest that provided I am not in Ireland for more than 183 days in the Irish tax year, and my company has no permanent establishment in Ireland, both myself as an individual and my company would remain subject solely to taxation in the UK.

My question is, what would constitute a permanent establishment in Ireland?  I would be providing my services (IT development) at the client company's office, using their equipment.


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## callybags (18 Jan 2011)

As far as I know there is no strict definition of a "Permanent establishment" for business or tax purposes.
It is a judgement made by revenue.

For example: If you were to rent office space here and get a land line from Eircom and maybe hire a part time office person, then it would be regarded as being a permanent establishment.

From the details you have given I would have thought you would not have any issues, but then I don't work for revenue 

You would be best advised to put in a call to the Irish revenue so that nothing comes back to bite you down the road.


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## Paddy199 (18 Jan 2011)

A PE is defined in The OCED model treaty Art 5. This will be replicated in the UK/Ire DTA. Based on the work you are doing, just ensure the place of management of your company (by holding no company meetings in Ireland, etc) remains in the UK and you should not be regarded as trading through a PE. PE specifically includes place of management, branches, offices, factories, workshops, etc - see Art 5 for full list. From what you have described, I don't think you will be operating from a PE.

Your company is resident in the UK, business profits from non PE operations in Ireland will be taxed only in the UK.

As regards personal, you are UK resident and will remain so, unless you exceed 183 days in the tax year. So as a non-resident, you are Liable to Irish tax on Irish source income only i.e. Irish deposit interest, Irish employment income (Ok with UK employment income), irish rental income, etc. And remember its presence at any time of the day counts as day.


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