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1 www.pwc.com Insights from Global Mo
www.pwc.com Insights from Global Mobility Services Ireland: Updated PAYE rules for foreign employees with Irish work days September 2 1, 2020 In brief The Irish Revenue has issued an update on the requirements to operate Pay - As - You - Earn tax (PAYE) when foreign employees exercise employment duties in Ireland. This update, which was promised in the announcement made in December 2019, contains some good news, particularly in relation to short - term business visitors to Ireland . In detail The changes, which apply from January 1, 2020, are very welcome and provide employers with significant clarity on the number of workdays a foreign employee can spend in Ireland without triggering a PAYE obligation. In addition, the alignment of the PAYE obligation with the conditions contained in the employment article of the relevant Double Taxation Agreement (DTA) will help with cash flow, as the exemption from Irish tax available under the relevant DTA will be given in ‘real time,’ removing the necessity to claim such refunds after the year end. While employers will still need to ensure they have processes in place to t rack business travellers, these changes mean the administration involved is substantially reduced . Key Changes Effective from January 1, 2020, the key changes are as follows: When counting the number of work days spent in Ireland, each year is considered on a stand - alone basis; • Exemption from the requirement to operate PAYE is based on meeting the exemption provisions of the employment article in the relevant DTA; • The actual le

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gal relationship between the employee and the employer will be consid ered ; therefore, the nature of the role and the duties being performed in Ireland do not need to be considered by the employer; Insights 2 PwC • Simplification of the process to apply for a PAYE dispensation. The application may include multiple employees, but must include confirmation that the exemption provisions contained in the employ ment article of the relevant DTA are met; and • For employees who come to Ireland from a non - DTA country, an obligation to operate PAYE will only arise where the employee will spend more than 30 work days in Ireland. Summary of PAYE rules that apply from January 1, 2020 Number of days spent in Ireland From DTA Country From Non - DTA Country Less than 30 work days in the tax year No PAYE obligation No PAYE obligation Between 30 and 60 work days in the tax year No PAYE obligation* PAYE obligation More than 60 work days but less than 183 days in the relevant period specified in the DTA** PAYE obligation unless a PAYE dispensation is obtained from Irish Revenue PAYE obligation 183 days or more presence in the tax year or in the releva nt period specified in the DTA** PAYE obligation PAYE obligation * Subject to the conditions of the Employment Article in the relevant DTA being met . **The relevant period will be specified in the Employment Article of the applicable DTA . The takeaway These new changes are welcome, as they provide clarity and may substantially reduce the administration involved for

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employers in relation to the operation of PAYE for short - term business visitors to Ireland. However, employers must ensure that the appropriate processes are in place in order to accurately track their business travellers, assignees, and cross - border workers. Insights 3 PwC © 20 20 PwC. All rights reserved. PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate l egal entity. Please see www.pwc.com/structure for further details. This content is for genera l information purposes only, and should not be used as a substitute for consultation with professional advisors. At PwC, our purpose is to build trust in society and solve important problems. We’re a network of firms in 15 8 countries with over 2 50 ,000 peop le who are committed to delivering quality in assurance, advisory and tax services. Find out more and tell us what matters to you by visiting us at w ww.pwc.com. Let’s talk For a deeper discussion of how this impacts your business, please contact your Global Mobility Services engagement team or one of the following professionals : Global Mobility Services – Ireland Pat Mahon , Partner pat.mahon@pwc.com Kathryn Brady , Director kathryn.brady@pwc.com Aoife Reilly , Senior Manager aoife.reilly @pwc.com Global Mobility Services – United States John Shea, US Leader john.w.shea@pwc.com Global Mobility Services – Global Leo Palazzuoli, Global Leader leo.palazzuoli@pwc.com Meet the Global Mobility Services global leadership team