Revenue Note for Guidance

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Revenue Note for Guidance

112B Granting of vouchers

Summary

This section provides an exemption from tax where an employer provides a small incentive (benefit or voucher) to an employee where the following conditions are met–

  1. it is not connected to a salary sacrifice arrangement,
  2. it cannot be converted to cash,
  3. the incentive is the first, second, third, fourth or fifth granted in the year, and
  4. the cumulative value of incentives in the year of assessment does not exceed €1,500.

Details

Definitions

(1) “benefit” means a tangible asset, but does not include physical cash;

“qualifying incentive” means a relevant incentive that is the first, second, third, fourth or fifth relevant incentive given to an employee in a year of assessment where–

  1. in the case of a first relevant incentive, the value does not exceed €1,500, and
  2. in the case of a second relevant incentive, the cumulative value of the first and second relevant incentives does not exceed €1,500,
  3. in the case of a third relevant incentive, the cumulative value of the first, second and third relevant incentives does not exceed €1,500,
  4. in the case of a fourth relevant incentive, the cumulative value of the first, second, third and fourth relevant incentives does not exceed €1,500, and
  5. in the case of a fifth relevant incentive, the cumulative value of the first, second, third, fourth and fifth relevant incentives does not exceed €1,500.

“relevant incentive” means either a voucher or a benefit that is given to an employee by his or her employer in a year of assessment where the following conditions are satisfied:

  1. the voucher or the benefit does not form part of a salary sacrifice arrangement;
  2. the voucher can only be used to purchase goods or services and cannot be redeemed, in full or in part, for cash.

“salary sacrifice arrangement” means any arrangement under which an employee forgoes the right to receive any part of his or her remuneration due under his or her terms or contract of employment and in return his or her employer agrees to provide him or her with a qualifying incentive.

The relief

(2) A qualifying incentive is exempt from income tax and is not classed as income for the Income Tax Acts. As a consequence, it is exempt from USC also and is not liable for PRSI.

(3) This section shall cease to have effect for the tax year 2030 and subsequent tax years.

Relevant Date: Finance Act 2024