Tax Advisors express concern over Revenues new approach to foreign employee taxation

Posted Thursday, February 9, 2017

Contracting PLUS recently highlighted and summarised the revised Statement of Practice issued by Revenue regarding the obligations of foreign employees working in Ireland, even on a temporary basis. Since this revision, a number of senior Tax Advisors have expressed their concerns on what has been deemed as the biggest change in cross-border taxation of individuals in a decade.Describing the changes as “draconian”, Deloitte’s Head of Global Employer Services, Daryl Hanberry, warned Revenues new approach causes uncertainty and could potentially jeopardise Ireland’s strong reputation as a country in which it was easy to do business in.

Under the new changes, employers must withhold taxes once the employee is in Ireland for more than 30 days and under additional circumstances, if they are deemed “integral” to operations or are seen to be “gaining experience”. The new measures are considered vague and ambiguous with exceptions which can bring the withholding obligation down to as little as one day.

Peter Vale, a tax partner at Grant Thornton, said the new guidance was “unfortunately timed in the context of Brexit” and will create an administrative burden for companies with little or no benefit. The changes will no doubt negatively impact the flexibility and mobility of professional workers who drive our economy, could also scupper post-Brexit relocations to Ireland.

To read further discussion and opinion on these changes by Revenue, please click here to read the full article which appeared in the Irish Times

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