COVID-19: Irish tax residency and force majeure

Revenue previously confirmed in March 2020 (March 2020 Global Mobility Update), that where a departure from the State is prevented due to COVID-19, they consider this ‘force majeure’ and the individual will not be regarded as being present in Ireland for tax residence purposes for the day after the intended day of departure.

Due to the unexpected length of the pandemic, Revenue have since released updated guidance in the form of a 4-page detailed document which covers the application and scope of this concession and also includes worked examples.

The updated guidance states that the force majeure concession seeks to give relief to individuals who, except for the COVID-19 pandemic, would not have been considered resident in the State for tax purposes, but only in circumstances where the individual maintains their foreign tax residence position.

The new guidance outlines a list of reasons that Revenue consider to have prevented an individual’s planned departure from the State;

• The individual has COVID-19 or a family member or partner with whom they are travelling has COVID-19
• The individual quarantining or self-isolating in a particular location due to suspected COVID-19
• The individual self-isolating whether on advice from a health professional or public health guidance or self-imposed
• The individual has received medical advice not to travel
• An employer requests that individual not to travel
• Border controls or entry restrictions in a home country of that individual
• The non-availability of commercial flights

The guidance states that the maximum length of time that may be disregarded for residence purposes due to COVID-19 under force majeure circumstances will depend on whether the individual was present in the State on or prior to 23 March 2020 or travelled to the State between 24 March and 5 May 2020.

If an individual was present in the State on or before 23 March 2020, then the period from the day after the original planned departure date up until 18 May 2020, or the actual departure date if earlier, may be disregarded for the purpose of determining their residence.

If an individual travelled to the State between the period 24 March 2020 to 5 May 2020, then the period from the day after the original planned departure date up until 18 May 2020, or the actual departure date if earlier, may be disregarded for the purpose of determining his or her residence. This is subject to a maximum of 30 days permitted in all circumstances, except in the case of an individual whose departure is prevented due to him or her having a confirmed COVID-19 diagnosis.

The guidance states that it is mandatory that the individual must have left the State as soon as they reasonably could, which must have occurred on or by 1 June 2020. Where a departure did not occur on or by 1 June 2020, force majeure will not apply to any of the days, except where the individual contracted COVID-19 and was not in a position to leave the State on or by 1 June 2020 on health grounds. With regard to such confirmed COVID-19 cases, force majeure may still apply in respect of the period to 18 May 2020.

Where an individual had more than one trip to the State during the period up to 5 May 2020, only days relating to the first trip may be permitted to be considered for this concession. Any days relating to a second or subsequent trip do not qualify for relief.

Individuals who travelled to the State on or after 6 May 2020 will not be regarded as having their departure from the State prevented due to COVID-19 under force majeure circumstances as the occurrence could reasonably have been foreseen and avoided.

Revenue request that individuals seeking to rely on this concession must maintain an appropriate record of the supporting facts and circumstances.