COVID-19: Global mobility and employment tax update January 2021
In March 2020, the Irish Government introduced a number of measures to assist employees and employers with difficulties arising due to the onset of the COVID-19 pandemic (Read our March 2020 Global Mobility Update). The measures included the extension of certain reporting and filing deadlines and a number of other tax-related concessions around residency, time spent performing duties in the State and the operating of PAYE.
Revenue issued updated guidance on this area in late December 2020, which provides further clarity on some of the measures that will remain in place during 2021. They also confirmed that a number of the concessions would cease to apply with effect from 31 December 2020. It has not yet been confirmed by Revenue if those measures will be re-introduced in light of the increased COVID-19 restrictions announced earlier this month however, Revenue may revisit this in the coming weeks and months.
Revenue recommends that in all instances where COVID-19 affects the applicability of Irish tax legislation on an employee or employer, records should be maintained outlining the circumstances and should be made available to Revenue on request.
Extension of Certain Tax Filing Deadlines
Share Schemes
Revenue confirmed in March 2020, that the filing deadline for reporting of 2019 share schemes involving the submission of returns such as the RSS1, ESS1, and KEEP1 had been extended from 31 March 2020 to 30 June 2020.
Revenue then agreed to further extend the filing deadline for the 2019 ESS1 – Return of Information by the Trustee of an Approved Profit Sharing Scheme to 31 October 2020.
In their December 2020 update, Revenue confirmed that the filing deadline for all 2020 share scheme returns will revert back to 31 March 2021.
Income Tax Returns – Real Time Credit Relief
Revenue previously confirmed that the 31 March 2020 deadline for filing of 2019 income tax returns where an employer operates a real-time tax credit through payroll for foreign tax paid on restricted stock units (RSUs) was extended to the standard filing deadline of 31 October 2020. The employer notification in relation to such cases should also have been made no later than the extended income tax filing date.
Revenue has since confirmed that the 31 March 2021 filing deadline for 2020 cases where real-time foreign tax credits were provided through payroll is also suspended. The return date for such employees is extended to the standard filing date (31 October 2021).
Global Mobility Reliefs
Special Assignee Relief Programme (SARP)Revenue confirmed in March 2020 that the 90-day employer filing obligation for SARP 1A applications had been extended for a further 60 days to provide sufficient time for employers to file the required return.
This concessionary measure ceased to apply on 31 December 2020. From 1 January 2021 all SARP 1A forms must be filed within the 90-day timeframe in the usual manner.
Transborder Workers Relief
Revenue previously confirmed that if employees are required to work from home in Ireland due to COVID-19, such days spent working at home in Ireland will not preclude an individual from being entitled to claim transborder workers relief, provided all other conditions of the relief are met.
The updated Revenue guidance confirms that this concessionary measure will continue to apply for the tax year 2021
Foreign Employments – Operation of PAYE
Revenue had confirmed that they would not seek to enforce Irish payroll obligations for foreign employers in genuine cases where an employee was working abroad for a foreign entity prior to COVID-19 but relocates temporarily to Ireland during the COVID-19 period and performs duties for his or her foreign employer while in the State.The updated guidance confirms that this concessionary measure ceased to apply on 31 December 2020. From 1 January 2021 employers are required to operate PAYE on such employments in the usual manner.
Revenue also point out that this measure only provided for a temporary relaxation on the employer’s obligation to operate PAYE. It did not provide any concession regarding the underlying income tax liability that the individual may have or the filing obligations of the individual.
PAYE Dispensations
Given the unprecedented circumstances and the restrictions on travel as a consequence of COVID-19, Revenue confirmed that they would not strictly enforce the 30-day notification requirement for PAYE dispensation applications.
The updated guidance confirms that this concessionary measure ceased to apply on 31 December 2020. From 1 January 2021 it is expected that the normal 30-day notification timeframe will be adhered to.
PAYE Exclusion Orders
Revenue previously confirmed that individuals who normally work abroad for a foreign employer under an Irish contract of employment where a PAYE exclusion order is in place, will not be adversely impacted where the employee works more than 30 days in the State due to COVID-19.
The updated guidance confirms that this concessionary measure ceased to apply on 31 December 2020. From 1 January 2021 employers are required to operate PAYE on such employments in the usual manner.
Revenue also point out that this measure only provided for a temporary relaxation on the employer’s obligation to operate PAYE. It does not provide any concession regarding the underlying income tax liability that the individual may have or the filing obligations of the individual.
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