Tax free income abroad

J.P.

Registered User
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Hi,

A friend of mine, who has been a public service employee (primary teacher) for the past four years, applied for and was granted a one year career break, his career break commenced on the 19/08/19. He moved to Dubai to take up a tax free role there on the 26/08/19, with a view to spending the next 9 – 10 months working there & experiencing life in Dubai. Due to some unforeseen circumstances, he will return to Ireland at Christmas time and will not be in a position to return to Dubai. His career break expires in August 2020, when he will return to his teaching position again. My queries are –
  1. Is the tax free salary which he will earn in Dubai for the duration of his stay, is this income liable for income tax here in Ireland ?
  1. When he transfers his Dubai earnings to his Irish bank account at Christmas time on his return home, does he need to advise Revenue of this ?

Many Thanks.

Regards,

J.P.
 
I don't think he would qualify for any of the exemptions to income tax? Does Ireland have a DTA with Dubai?

He won't have to inform revenue of the bank transfer. His bank will do that :) He would have to declare the income in his tax return.
 
Hi Fergal19,

I found some info on the Revenue website that Ireland does have a DTA with Dubai. I also noted on the Revenue website that one is resident in Ireland for tax purposes if you are in Ireland for a total of 183 days or more within a tax year - my friend will have been a resident here for over 200 days within the 2019 tax year.

I also read on the Revenue website re. "How to know if you are ordinarily resident for tax purposes " (which i don't really understand), if you have been tax resident in Ireland for three consecutive tax years, you become ordinarily resident from the beginning of the fourth tax year. If you leave Ireland after this time, you continue to be ordinarily resident for three consecutive tax years. For these three years you must pay Irish tax on your worldwide income except for:

- income from a trade or profession, no part of which is performed in Ireland

- income from an office or employment, where all the duties are performed outside Ireland



I dont know if any the above applies in this instance ?
 
There is a relief called Split Year Treatment which covers this type of scenario, see the bottom of page 8 in the link below


However IMO your friend will not actually qualify for Split Year Relief as he intended to come back to Ireland in Aug-2020 which means that he would have been tax resident in both years (2019 & 2020) anyway. If he had intended to stay abroad until December 2020 then he would have been non-resident for 2020 (under the less than 30-day rule) and could claim Split Year Treatment from the date of departure
 
Thanks for that. What proof of income for the period he has worked in UAE within 2019 will he need to furnish Revenue with when making his 2019 annual tax return here ?

Regards,

J.P.
 
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