Ireland (Eire) - Tax Guide for Freelance Contractors

Tax residents in Ireland:          are liable to pay Irish tax on their worldwide income,
Non tax residents in Ireland:   are liable to pay tax only on their Irish-source income.

Residence:

• Residence is not determined by tax law, but according to the circumstances. The following circumstances are considered important: the availability of a permanent home, the place where the spouse and the children live and the centre of personal and economic relations.

Domicile:

• Is a concept different to residency or nationality and in essence means the place gained through birth or by choice (i.e. the place where an individual intends to ultimately return. Individuals who are deemed Irish resident but not Irish domiciled can normally qualify for the remittance rule basis whereby any non-Irish and non-UK source income and gains are only taxed in Ireland if the income or gains are remitted to Ireland.

Married persons may elect to be taxed either jointly or separately.

Taxable income includes:

• salary,
• fees,
• bonuses,
• benefits in kind (company cars, certain employer loans, accommodation allowances, etc.).

Certain deductions are permissible for 2012 including:

• tax credits applicable for single person EUR 1’650, married person EUR 3’300 and PAYE EUR 1’650,
• tax credit is granted for medical expenses incurred on non-routine medical treatment,
• for pension contributions

Income tax rates for 2012:

• 20% for the first EUR 32’800 for a single person without dependent children,
• 20% for the first EUR 41’800 for a married couple with one income,
• 41% on the excess.

Miscelleanous

New Domicile Levy introduced in 2010

An Irish domicile levy of EUR 200'000 per year has been introduced for non-resident Irish nationals and domiciled individuals, whose worldwide income exceeds EUR 1'000'000 and whose Irish-located capital is more than EUR 5'000'000.