Does a person who is Tax Resident and non-domiciled, with no Irish income and €200,000 unremitted Foreign income, have to complete a Tax Return?

Does a person who is Tax Resident in Ireland, and non-domiciled in Ireland, have to complete a Tax Return each year if they have no Irish income, and no remitted foreign income or gains?



For example :



Mr. X who is retired and non-Irish domiciled, arrives to live in Ireland in January 2025. He then transfers €300,000 in clean capital from his bank account in his home country to his newly opened bank account in Ireland. He then uses this Ireland bank account containing €300,000 for his living expenses in Ireland and he spends about €50,000 per year. At the end of 5 years living as a Tax Resident in Ireland, he returns to live in his home country.



Mr. X also has €200,000 per year in foreign income from dividends (from non-Irish companies) and this foreign income is not remitted to Ireland at any time during the 5 years.



So Mr. X will have been Tax Resident and non-domiciled in Ireland for 5 years, with no Irish income during these 5 years, and he will not have remitted any foreign income or gains to Ireland during these 5 years.



So although Mr. X has no tax liability in Ireland during these 5 years, the questions are :



1. Does Mr. X have to complete a Tax Return for any of the 5 years that he is Tax Resident in Ireland?


2. And if he does not need to complete a Tax Return for any of the 5 years that he is living in Ireland, is there anything else that he has to do or report to the Irish tax authorities? For example, does he have to register with the tax authorities during these 5 years? or answer any tax questions? or complete any type of tax form?


3. I also assume that Mr. X would not be liable for any other taxes such as USC on his non-remitted foreign income of €200,000 per year?

Are there any experts on here who know the answer to this?

Is a Tax Return required in this situation or not required?

Is this a real case or just a what if?

It is a real case

Does anyone here know the answer?

A pension in that position almost certainly needs professional cross-jurisdictional tax advice.

Professional advice is always good

But what is the legal requirement in Ireland?

Do the Irish Revenue require a Tax Return from this person or not?

Does anyone actually know what the Revenue law is in this situation?

Why don't you ask them?

We can of course ask them when we move to Ireland

But we thought that someone on this site would know the answer before we move to Ireland

There are many people here with tax knowledge and so it is surprising that nobody is very sure if a Tax Return is required or not required

Are there any tax experts here who know the answer?

There are no answers yet to this question

Are there any Tax Accountants or Solicitors here who may know the answer?

A simple answer is: it is complicated but expect that you need to file a tax return.
Start here maybe
And More here

A tax resident but non-domiciled individual in Ireland is subject to tax on any Irish source income or gains but may apply the remittance basis of taxation to any foreign income.
This implies that Revenue decides if foreign income is taxable or not. So a tax return is required, so they can make that assessment.

Also, when moving to Ireland you need to proof that you can support yourself, especially in case a visa is required.

If the 300000 is left in a current account then there probably won't be any deposit interest, but if there is interest eg due to being placed in a deposit account then DIRT tax will be payable, and if the interest is more than 5000 per year then prsi will also be due and a form 11 will need to be completed.

Edited USC to prsi

newirishman said:

This implies that Revenue decides if foreign income is taxable or not. So a tax return is required, so they can make that assessment.

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This is not what I was told when I seeked independent advise on the matter. A tax return is not required since foreign income for which the remittance basis is valid, is outside of the scope of Revenue and doesn't need to be declared. He also showed me a field in the tax retun I think it was Form 11 (or Form 12 can't recall) that specifically was showing "Remitted Income" for non-domiciled or something like that, which he told me implies that you declare it only when it is remitted.

outofmymind said:

If the 300000 is left in a current account then there probably won't be any deposit interest, but if there is interest eg due to being placed in a deposit account then DIRT tax will be payable, and if the interest is more than 5000 per year then USC will also be due and a form 11 will need to be completed.

Click to expand...

If the account is a foreign account, DIRT doesn't apply, capital gain applies. There was an extensive explanation in this forum a few weeks ago on this topic.

Henning G said:

If the account is a foreign account, DIRT doesn't apply, capital gain applies. There was an extensive explanation in this forum a few weeks ago on this topic.

Click to expand...

But the OP talked about bringing 300000 to ireland: "He then transfers €300,000 in clean capital from his bank account in his home country to his newly opened bank account in Ireland." so any income from that would be subject to irish tax.

Thanks for the answers



So it seems from the answers that have been received so far that there is no legal requirement to complete a Tax Return in this situation



The €300,000 in clean capital will just stay in an Ireland bank account with zero interest or in a current account with zero interest and so there will be no Irish income received during the 5 years



The post from “newirishman” also suggests that the Revenue “may” need to see a Tax Return to decide if the €200,000 unremitted Foreign income is actually “Foreign” income or not



But this does not really make any sense as it is the responsibility of the individual who is non-domiciled to know if something is Irish income or Foreign income, in the same way that a domiciled individual is expected to know if something is taxable or not taxable, or if something is income or capital gains



If dividends of €200,000 are directly received from non-Irish companies, then this is clearly Foreign income



And if this Foreign income is not remitted to Ireland at any time by a non-domiciled person, then this income is clearly not taxable



The poster “Henning” has also received independent advice on a similar issue and was informed that a Tax Return is not required in this situation as the unremitted Foreign income of a non-domiciled person is outside the scope of Revenue and does not need to be declared



So unless there is specific Irish legislation somewhere to show that this person must complete a Tax Return, or register their name and address with Revenue, or tick a box on some form, it seems that there is no legal requirement to complete a Tax Return in this situation

As I said before, a person in this position really should get their own professional tax advice on the matter to avoid the risk of acting inappropriately.

We will probably get some advice when we move to Ireland

It seems fairly clear though that there is no legal requirement to complete a Tax Return in this situation

If there was a legal requirement, then it would be very easy to show the relevant legislation, but there is no legislation

It also seems to be quite reasonable

If there is no taxable income, there is no need for a Tax Return

If there is no income.

However
"If you choose to be tax resident in Ireland, you will be taxed on your worldwide income"


You can't avoid paying tax just because you aren't sending the money to Ireland.

Meaning, if you earn income outside of Ireland, you'll be liable for income tax, in Ireland. If no income, no tax.

You really need to talk to a tax professional.

OP wrote specifically about dividends.

Dividend payments are taxable and you must declare this income to Revenue.


It doesn't seem to matter of you remit the moneys to Ireland.
Again, if you are tax resident , your worldwide income is taxable income Ireland.

newirishman

What you are saying is not correct

You do not seem to understand the Remittance Basis of taxation for persons who are tax resident in Ireland and non-domiciled in Ireland

Foreign income that is not remitted to Ireland by a person who is tax resident in Ireland and non-domiciled in Ireland is not taxable