Irish Company with non resident director

C

censuspro

Registered User
Messages
277
Maybe some people here could give some input.

An Irish company, 100% director moves to Australia and invoices a UK company through the Irish company.

If the director is non resident in Ireland and the company pays the director a salary. I assume that Australian payroll must be operated and not Irish PAYE. Can the Irish company pay a salary without operating PAYE and does the salary qualify as deductible expense for the company?

All things being equal, would it not be best to operate through an Australian company?
 
Is the Director the company to all intents and purposes or does it still have activities in Ireland? I would think if this is the case the company is now Australian registered for tax purposes if no activities in Ireland
 
A directorship is an Irish office holder and is subject to Irish Paye.

To get around this, you will need dual employment contracts with eg €1,000 stated for his directorship duties and the other a salary type amount for the duties performed outside Ireland. You will need to apply to irish Revenue for a PAYE exclusion order on the second employment contract. He can continue to pay PRSI here if he wants.

Yes its a deductible expense for CT, he operates Australian PAYE on his Australian employment contract, Irish PAYE on his directorship contract, PRSI/levies (you decide).

There are serious administration tasks to be performed here by the Irish resident company.

Also watch CGT on companies for non resident shareholders & distributions to non resident shareholders (withholding tax obligations). Are there any Irish resident shareholders in this company - they could be exposed to tax if the non-resident does not pay his taxes.

And no, its not the same invoicing from Australia. Ireland as a company location eg CT rate 12.5%, VAT rules re: EU transactions v imports, etc.

One final point, the company is Irish resident as it was incorporated here 'incorporation test'. I'm not familiar with the DTA with Australia but I doubt it has an incorporation test for residency. If it does, Australia may have secondary taxing rights so it will get even more complicated.

Good luck with this and be very careful as this is full of tax pitfalls. You should get expert tax advice.
 
Paddy199 said:
A directorship is an Irish office holder and is subject to Irish Paye.

To get around this, you will need dual employment contracts with eg €1,000 stated for his directorship duties and the other a salary type amount for the duties performed outside Ireland. You will need to apply to irish Revenue for a PAYE exclusion order on the second employment contract. He can continue to pay PRSI here if he wants.

Yes its a deductible expense for CT, he operates Australian PAYE on his Australian employment contract, Irish PAYE on his directorship contract, PRSI/levies (you decide).

There are serious administration tasks to be performed here by the Irish resident company.

Also watch CGT on companies for non resident shareholders & distributions to non resident shareholders (withholding tax obligations). Are there any Irish resident shareholders in this company - they could be exposed to tax if the non-resident does not pay his taxes.

And no, its not the same invoicing from Australia. Ireland as a company location eg CT rate 12.5%, VAT rules re: EU transactions v imports, etc.
Click to expand...

Thanks for the reply. The directorship being an Irish office holder is a good point which I missed completely. The company is 100% owned by director who has now moved to Australia. It's an online business so everything can be done over the internet. Basically, he has a contract with a UK company for 3 years and decided to move to Australia for the 3 years where he can fulfil the contract just as easy as he can in Ireland but have a better standard of living.
 
Believe me, Revenue won't miss it. Without dual contracts from the company and a PAYE exclusion order from Revenue, they will apply Irish PAYE to the entire payment.

There are various forms for the operation of the PRSI and levies in Ireland for companies to operate the return of PRSI whereby they have no PAYE to return.

Is he electing to be resident in Australia from the first day he left? Or are you going to apply the 183 day rule?

Another point I just taught of, get him to operate seperate bank accounts for the 2 employments. If you mix them, when he returns to Ireland, Revenue will want to tax the entire amount on the remitance basis. If he keeps the Australian salary seperate it will be outside the Income tax net when he returns.
 
If the directors of the company are non resident in Ireland then the company will no longer be resident in Ireland for corporation tax purpose

If this is correct, Revenue will neither have an interest in the company for corporation tax or PAYE as both of these taxes will be out of scope.
 
Importer said:
If the directors of the company are non resident in Ireland then the company will no longer be resident in Ireland for corporation tax purpose

If this is correct, Revenue will neither have an interest in the company for corporation tax or PAYE as both of these taxes will be out of scope.
Click to expand...

Just because the directors are non resident does not mean the company is non resident.

There are 2 main tests
Incorporation or treaty test
The incorporation test will deem the company resident in Ireland for CT purposes.
 
Importer said:
If the directors of the company are non resident in Ireland then the company will no longer be resident in Ireland for corporation tax purpose

If this is correct, Revenue will neither have an interest in the company for corporation tax or PAYE as both of these taxes will be out of scope.
Click to expand...

Just one director is non resident and the company is incorporated in Ireland.
 
Paddy199 said:
Just because the directors are non resident does not mean the company is non resident.

There are 2 main tests
Incorporation or treaty test
The incorporation test will deem the company resident in Ireland for CT purposes.
Click to expand...

It's more complicated than that...the location where the companies central management and control is exercised should also be considered.
 
You must log in or register to reply here.
Back
Top