PAYE Exclusion Orders - non-resident employees recruited abroad and who exercise all their duties abroad

What is a PAYE Exclusion Order?

The obligation to deduct tax at source under the PAYE system from emoluments is a statutory obligation placed on employers and other persons paying emoluments by Section 985 of the Taxes Consolidation Act (TCA) 1997. A PAYE Exclusion Order issued by Revenue to an employer or other person paying emoluments, under Section 984 TCA, relieves that employer or other person from that obligation.

Non-resident employees who are recruited abroad and who exercise all their duties abroad

Some Irish resident employers carry on some or all of their trade or profession in foreign jurisdictions and recruit non-resident employees to work in the foreign jurisdiction. These employees generally reside locally in the area in which the trade or profession is being carried on and carry out all the duties of their employment in the foreign jurisdiction and never set foot in Ireland.

To obviate the necessity for such a non-resident employee to apply for a PPS number and for the employer to apply for an Exclusion Order under section 984 of the Taxes Consolidation Act 1997, Revenue is prepared to accept that the employer is released from the obligation to make the appropriate deductions under the PAYE system from the employee's remuneration in certain circumstances. Those circumstances are where the employee -

• is not resident in the State for tax purposes,
• has been recruited abroad,
• carries out all the duties of employment abroad,
• is not a director of the employer, and
• is outside the charge to tax in the State.

Paragraph 5.1A has been added to Revenue's PAYE - Exclusion Orders Manual - to reflect this position.

16 January 2015