Hi,
will try to explain my situation below; if anyone has any topline info to help me understand my irish taxation situation it would be great! Trying to understand the general scope of it really; not finer detail.
Summary:
Worked in ireland 1999-2012 and netherlands 2012-2013.
Transferred irish service to netherlands (13 years)
worked under netherlands employer and contract over there.
Got my P45 from ireland before i transferred.
Made redundant in netherlands end of 2013 due to reorganisation.
All of my years of service added up for my dutch redundancy package (Irl+NL)
Transferred back to ireland after redundancy to live at end of Dec 2013.
Tax resident Ireland in 2012 for 9 months.
Tax resident NL for 3 months of 2012 and 12 months of 2013.
Was not tax resident in ireland for 2013.
Tax resident in Ireland from Jan 2014.
redundancy in special bank account in netherlands.
Payment made to special dutch bank account and in my name in nov 2013; so it has been received already.
Put into special bank account in NL in Nov 2013; not taxed or anything yet
once account is touched it will trigger taxation element.
My understanding:
I was under dutch employment law and contract.
I am subject to dutch taxation laws in the first instance.
Advice i got was to make sure i was not resident for tax in both countries; so i make sure not to fall under the irish residency rules for 2013.
My main home and work for end of 2012 and 2013 was Netherlands.
The dutch bank account:
- i have 2 options on the account:
1) take it as a form of annual annuity over 9 years due my age (will minmise dutch taxation by falling into lower taxation bands) or
2) take the lump sum as cash after dutch taxation in 2014 (i can maximise special taxation rules on lump sum as a once off for 2014 - dutch gov don't like these accounts and want to encourage you to liquidate them in 2014)
- the dutch taxation will kick in as it is the source country in the first instance I would assume
- there is a double taxation agreement in place between NL and Ireland
- I am resident in Ireland for 2014 for residency tax rules
- I plan to make the most efficient taxation decision for the lump sum in 2014
- I could receive the money as "income" for 2014 and it may count as part of my "worldwide income" for 2014 under irish taxaton rules; and I am no longer resident in NL for 2014 (but it is redundancy money)
Possible Problems & Questions:
- assume i will pay dutch tax in the first instance
- will i have to pay irish taxation on the lump sum if i transfer it over after paying dutch tax?
- will revenue argue for taxing the "irish" element of the years of service?
- or will the fact that i paid dutch tax already; mean that i dont have to pay irish tax on it as well due to double taxation agreement?
- or is there the possibility that i would only have to pay the "difference" in taxation rates on the lump sum e.g. if NL tax at 15% and Irl at 17%; i pay 15% in NL and another 2% in Ireland?
- as it is redundancy payment; would it fall under the irish rules of redundancy if irish revenue wanted to tax part of it?
- I plan to return to work in 2014; so could the redundancy be seen as part of my worldwide income for 2014 and be added to my irish income and taxed accordingly?
Worst case could be this:
1) Pay dutch tax on redundancy for 2014
2) Receive money to dutch bank account
3) Transfer sums to irish bank account
4) Be taxed on it in Ireland as well for 2014
5) Have to claim tax back after completing tax returns in both countries for 2014 so basically be out of pocket of a lot of money after paying tax in both countries
So basically i am slightly going around in circles trying to understand it;
has anyone had a similar experience of redundancy abroad and irish tax implications if you came home?
Any thoughts appreciated.
Thanks!
will try to explain my situation below; if anyone has any topline info to help me understand my irish taxation situation it would be great! Trying to understand the general scope of it really; not finer detail.
Summary:
Worked in ireland 1999-2012 and netherlands 2012-2013.
Transferred irish service to netherlands (13 years)
worked under netherlands employer and contract over there.
Got my P45 from ireland before i transferred.
Made redundant in netherlands end of 2013 due to reorganisation.
All of my years of service added up for my dutch redundancy package (Irl+NL)
Transferred back to ireland after redundancy to live at end of Dec 2013.
Tax resident Ireland in 2012 for 9 months.
Tax resident NL for 3 months of 2012 and 12 months of 2013.
Was not tax resident in ireland for 2013.
Tax resident in Ireland from Jan 2014.
redundancy in special bank account in netherlands.
Payment made to special dutch bank account and in my name in nov 2013; so it has been received already.
Put into special bank account in NL in Nov 2013; not taxed or anything yet
once account is touched it will trigger taxation element.
My understanding:
I was under dutch employment law and contract.
I am subject to dutch taxation laws in the first instance.
Advice i got was to make sure i was not resident for tax in both countries; so i make sure not to fall under the irish residency rules for 2013.
My main home and work for end of 2012 and 2013 was Netherlands.
The dutch bank account:
- i have 2 options on the account:
1) take it as a form of annual annuity over 9 years due my age (will minmise dutch taxation by falling into lower taxation bands) or
2) take the lump sum as cash after dutch taxation in 2014 (i can maximise special taxation rules on lump sum as a once off for 2014 - dutch gov don't like these accounts and want to encourage you to liquidate them in 2014)
- the dutch taxation will kick in as it is the source country in the first instance I would assume
- there is a double taxation agreement in place between NL and Ireland
- I am resident in Ireland for 2014 for residency tax rules
- I plan to make the most efficient taxation decision for the lump sum in 2014
- I could receive the money as "income" for 2014 and it may count as part of my "worldwide income" for 2014 under irish taxaton rules; and I am no longer resident in NL for 2014 (but it is redundancy money)
Possible Problems & Questions:
- assume i will pay dutch tax in the first instance
- will i have to pay irish taxation on the lump sum if i transfer it over after paying dutch tax?
- will revenue argue for taxing the "irish" element of the years of service?
- or will the fact that i paid dutch tax already; mean that i dont have to pay irish tax on it as well due to double taxation agreement?
- or is there the possibility that i would only have to pay the "difference" in taxation rates on the lump sum e.g. if NL tax at 15% and Irl at 17%; i pay 15% in NL and another 2% in Ireland?
- as it is redundancy payment; would it fall under the irish rules of redundancy if irish revenue wanted to tax part of it?
- I plan to return to work in 2014; so could the redundancy be seen as part of my worldwide income for 2014 and be added to my irish income and taxed accordingly?
Worst case could be this:
1) Pay dutch tax on redundancy for 2014
2) Receive money to dutch bank account
3) Transfer sums to irish bank account
4) Be taxed on it in Ireland as well for 2014
5) Have to claim tax back after completing tax returns in both countries for 2014 so basically be out of pocket of a lot of money after paying tax in both countries
So basically i am slightly going around in circles trying to understand it;
has anyone had a similar experience of redundancy abroad and irish tax implications if you came home?
Any thoughts appreciated.
Thanks!