With the continuation of the Russian–Ukrainian war, Revenue has introduced a tax concession for Ukrainian citizens working from Ireland. Jane Quirke explains what the concession involves and how to comply.
On 14 April 2022, Revenue announced a concession in relation to the Irish tax treatment of Ukrainian citizens who continue to be employed by their Ukrainian employer while performing their duties remotely from Ireland.
There are several points people need to keep in mind while helping those in this position with their tax.
Liability of income to Irish tax and concessional treatment
Regardless of the tax residence position of the employee or the employer, income from non-Irish employment attributable to the performance in Ireland of the duties of that employment is chargeable in Ireland to income tax and the Universal Social Charge (USC). It is within the scope of the PAYE system of deduction of income tax at source.
However, by way of concession, Revenue will:
- treat the Irish-based employees of Ukrainian employers as not being liable to Irish income tax & USC on Ukrainian employment income attributable to the performance of duties in Ireland; and
- ·not require the Ukrainian employer to operate within the PAYE system on such employment income.
The concession applies solely to employment income paid to the Irish-based employees by their Ukrainian employer.
This concessionary treatment will apply for the tax year 2022 where the employee:
- would have performed their employment duties in Ukraine but is currently unable to because of the war; and
- is still subject to Ukrainian income tax on their employment income.
Corporation tax
Similarly, due to the ongoing war in Ukraine, an employee, director, service provider or agent may have come to Ireland and may, as a result, have an unavoidably extended presence in the state.
Revenue will disregard such presence in Ireland for corporation tax purposes where the employee, director, service provider or agent would have continued to be present in Ukraine if it wasn’t for the war. This concessionary treatment will apply for the tax year 2022.
Record keeping
Any individual or relevant entity that avails of the concessional treatments set out here should make sure to keep any documents or other evidence – such as a record with the individual’s date of arrival in the State – showing that the individual came to Ireland due to the war in Ukraine and is performing their work or duties here.
Jane Quirke is Director of Tax and Legal at Grant Thornton.