Over the past couple of months, we have discussed tax and taxation issues at length. We have also talked about tax relief available and the many ways in which individuals may have overpaid tax and be due a rebate of some description. This week, we have decided to focus on one form of tax relief which is not as widely known about, and one which directly affects business owners and a great many Irish workers, namely the Trans-Border Workers Relief.
This is a form of tax relief available to an individual who is a resident of Ireland and commutes daily or weekly to work abroad and is as a result paying tax in that country on their employment income. This tax relief is an important one for those workers and business owners whose employment takes place entirely abroad, but their residence remains in Ireland. As a cross border worker, you are in the strange situation of having to pay income tax in the country of earning whilst your ultimate tax responsibility lies within your country of residence, therefore an annual self-assessment tax return must be completed each year regarding your world-wide income.
One thing to consider when working abroad is double taxation agreements. A double taxation agreement is in place between the UK and Ireland which means that you will be awarded credits for tax paid in the UK, if this applies to you we would recommend visiting the HM Revenue and Customs website for further information. Trans-border Workers Relief ensures that you do not pay additional income in Ireland, unless it is income earned from other Irish sources or you have chosen to be jointly assessed with your spouse.
As with all tax relief options, there are a few conditions you must meet in order to qualify.
- Employment must take place in a country with which Ireland has a Double Taxation Agreement (detailed above)
- You must be employed for a continuous period of at least 13 weeks of the tax year.
- Your income from employment must be subject to tax in the country of employment and have been paid in full.
- For each week worked abroad, you must be present in Ireland for one day.
If you feel that this may apply to you and require further information, it would be advisable to contact the Revenue directly in order to assess what the best course of action would be. Should you have any other concerns or issues you require financial advice on, please don’t hesitate to contact us here at DCA Accountants.
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