Returning to Ireland – Relocation expenses & reliefs
Here’s what you need to know about returning to Ireland.
Tax is always a major concern for ex-pats thinking of returning to Ireland. In a special holiday season series, our tax department are sharing some of the common questions that we are frequently asked from people who are looking to return home.
Question: I am moving to Ireland to work for an Irish subsidiary of my foreign employer. Am I entitled to any Irish tax reliefs or exemptions?
Tax-free reimbursement of relocation expenses.
It has been a Revenue practice for many years to allow an employer to reimburse certain relocation and removal expenses to an employee tax-free provided certain conditions are satisfied.
Tax-free reimbursement of removal/relocation expenses may be allowed where the reimbursement to the employee or payment directly by the employer is in respect of removal or relocation expenses actually incurred. The expenses must be reasonable in amount, properly controlled and necessary to move house. Examples of expenses covered by this exemption are auctioneer and solicitor fees, furniture removal and storage charges.
Special Assignment Relief Programme (SARP Relief).
Another benefit to consider on your relocation is the Special Assignment Relief Programme (SARP Relief). This relief operates such that, where you meet all of the relevant conditions, 30% of your Irish employment income over €75,000 is disregarded for Income Tax purposes.
Your employment in Ireland must last for at least 12 months to qualify and the relief can only apply for a maximum of five years. You must not have been Irish tax resident for the five tax years immediately preceding the year in which you return.
Finally, it is important to note that SARP relief must be applied for within 90 days of arriving in Ireland. In our experience this deadline can often be missed resulting in Revenue’s refusal of the relief. Previously, the deadline was 30 days but Revenue have recently extended this deadline to 90 days which is a welcome change.
If you have any questions about returning to Ireland or any other personal tax issues, please contact a member of our tax team.
