Foreign Worker and Tax Credits

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andrew101

Guest
I moved to Ireland in September 2008. During the 2008 Financial Year, I earned about €7,000 (of which about €450 was withheld by my employer for tax). In early 2009, I spoke with the revenue office who said that I should not have been taxed on a ‘cumulative basis’ (because I didn’t and wouldn’t satisfy the Irish residency test) and that I probably paid too much tax. I submitted a request for a refund of tax and shortly after received a cheque for €450 (along with a PAYE Balancing Sheet). About one month later, I received a letter from the revenue office asking for details of my worldwide income for the 2008 Financial Year, which I provided (my non-Irish income was about €10,000). Since then I have received an updated PAYE Balancing Sheet which shows that I owe the revenue office €800!

On the updated PAYE Balancing Sheet, my tax credits have been reduced from €3,660 to €563 (the revenue office claims this was done to reflect the fact that I was only in Ireland for about 3 months in 2008).

My questions:

1. Are non-tax residents entitled to a full year’s tax credits?
2. If no, how are tax credits calculated for non-tax residents?
3. Are non-tax resident’s tax credits reduced or pro rated according to the amount of time they spend in the country, according to the amount of their world-wide income, or both?
4. Does Ireland have a ‘tax free threshold’ (i.e. where you can earn up to a certain amount without incurring tax)? If so, what is it?