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On 11 December 2019 the Irish Revenue issued a much awaited update to the PAYE rules for non-Irish employments exercised in the State. The update to the current rules is welcome, practical and business friendly.

This update includes the removal of the “multi-year test” to determine whether a PAYE withholding obligation arises. From 1 January 2020 we move to a year in question basis for determining whether PAYE needs to be operated for employees with Irish workdays or whether an exemption needs to be applied for by the employer.

Decision tree for download

The ‘decision tree’ is available below for download.  It summarises the PAYE withholding obligations effective from 1 January 2020  in respect of foreign employees working in Ireland and provides some guidance to employers of the considerations. 

The key changes (effective from 1 January 2020) are as follows:

  1. ‘Multi-year’ test removal
    Employers need only to consider the number of workdays a foreign employee spends in Ireland in a single calendar year when determining whether a dispensation is required.

  2. Annual workday thresholds
    Revenue have stated the tests will now effectively be:
  • 60 workdays in a calendar year if coming from a treaty country
  • 30 workdays in a calendar year if coming from a non-treaty country (e.g. Brazil)

What should business be doing?

  1. Continue to track and document workdays for overseas employees who spend time in Ireland
  2. Understand clearly the nature of the duties exercised in Ireland
  3. Apply for a dispensations from operating PAYE where appropriate (typically within 30 days of arrival)
  4. Operate PAYE in respect of certain business travellers