Remittance

Hi,

does anybody know what the income tax situation is with contracting in Ireland for non-domiciled residents now that the remittance basis of taxation has been abolished ?. I have been told that it would be based on your p60 income ? is this correct ?

Steve

Unless you carry out any of your duties of employment outside Ireland, you will be taxable on the amount shown on your P60. If you will carry out any duties outside Ireland, then the position is more complex.

thanks for that Domo, firstly the assumption is that all duties carried out in Ireland. Its just that I was thinking of joining a management company for contractors with offshore links and wondered whether everything was still kosha. They're still in business so I imagine it must be!, I was wondering about what the post budget 'rules' were. From what you say (and if my understanding is correct) then it appears that people involved in these schemes before the 06 budget wont be affected that much anyhow as i'm sure that their taxable declared salaries wouldnt differ too much from funds remitted under the old system ?. I'd appreciate anyone putting me straight on this if my understanding isnt correct before I commit myself.

Steve

A lot of these companies set up tax efficient achemes (under the old rules) whereby the contractor was employed by an offshore company (usually in Jersey, but anywhere but UK would work).

They would get paid into offshore company, and only be taxed in Ireland on earnings actually brought into the country. This would only work if they did not need to remit all of their employment income to live on.

In the case of a UK individual, if, for example he was reniting out his UK house, that income would be taxable in Ireland anyway (whether brought in or not), so the UK people would remit their rental income to live off in Ireland, and could usually leave a big chunk of earnings outside the UK and not be taxable in Ireland as it was not remitted, and not taxable anywhere else as they were not resident there.

The changes in tax rules certainly put a stop to this type of tax planning!!

However, these companies are still in business because they now merely deal with the admin, accounting and tax for contractors - but I don't believe there are any great tax savings to be made that another accountan't couldn't deal with.

Let me know if you are offered any other "schemes" I would be interested to know what they are.

Hi again Domo and thanks for the reply, the way things worked prior to the 06 budget was explained to me and matches your description exactly however I was told that the people that were part of these schemes before could basically carry on doing the same thing (leaving a large part of their income offshore - as untaxed dividend payment) and would still only be taxable on the salary which they pay themselves (ie declared on their p60). Hence my assumption that little has really changed ?. Clearly I'm not a financial type so excuse my ignorance in this area.

regards

steve