Revenue Note for Guidance
Chapter 2 of Part 18 provides for a scheme of tax deduction (known as relevant contract tax (RCT)) from payments to subcontractors in the construction, forestry and meat processing industries. Tax is deducted from payments made to subcontractors at a rate which reflects their tax compliance status. Section 531 sets out the statutory provisions governing payments to subcontractors prior to 1 January 2012. Sections 530A to 530V provide for a new e-based scheme of relevant contracts tax (RCT) which was introduced by order of the Minister for Finance with effect from 1 January 2012.
Reference should also be made to the provisions of section 904 which provides authorised Revenue officers with powers of inspection (including the right of entry onto, and search of, premises) in connection with the scheme of payments to subcontractors in certain industries.
Some of the definitions in section 530 apply solely to the scheme of RCT which operated in respect of payments made to subcontractors prior to 1 January 2012, some other definitions apply solely to the new scheme of RCT which was introduced with effect from 1 January 2012 while others have common application to both schemes of RCT.
(1) “certificate of authorisation” is the certificate issued by the Revenue Commissioners to a subcontractor and which allows a principal contractor to apply for a relevant payments card from Revenue, on receipt of which the principal contractor can make payments to the subcontractor in respect of construction, forestry or meat processing contracts without deduction of tax. Such a certificate is valid for such period as the Revenue Commissioners may, by regulations, provide.
“certificates of deduction” means a certificate issued under section 531(11).
“certified subcontractor” is a subcontractor for whom the principal holds, at the time of making a payment under a relevant contract to the subcontractor, a relevant payments card for the year in which the payment is made and for whom the principal has not received a notice from Revenue cancelling the subcontractor’s certificate of authorisation issued under subsection (11) of section 531.
“chargeable period” has the same meaning as in section 321(2).
“construction operations” are —
“the contractor” has the meaning assigned to it by the definition of “relevant contract”.
“deducted tax” has the meaning given to it in section 530P
“deduction summary” in relation to a return period, means a statement (adjusted as appropriate in accordance with regulations made under this Chapter) which is issued to a registered principal setting out, in summary form, details in respect of each relevant payment notified by that principal and the aggregate amount of tax payable by a principal in respect of those payments.
“designated area” has the meaning assigned to it by section 13(1), which is an area designated by order under section 2 of the Continental Shelf Act 1968.
“director” means, in relation to a body corporate, where the affairs are managed by a board of directors or similar body, a member of that board or body; where the affairs are managed by a single director or similar person, that director or person and; where the affairs are managed by the members themselves, a member of the body corporate. It also includes any person who is or has been a director.
“due date”, in relation to a return period, means 14 days after the end of that return period, or 23 days after the end of that return period where the return for that period is made by electronic means and the amount of tax tthat the person was liable to remit to the Collector-General is made by such electronic means as are required.
“electronic means” has the same meaning as in section 917EA(1)
“forestry operations” are —
“income tax month” means a calendar month.
“meat processing operations” are —
“NAMA” and “NAMA group entity” have the same meanings, respectively, as they have in the National Asset Management Agency Act 2009.
“principal” is the person to whom a subcontractor is liable to for —
“proprietary director” is a director of a company who is either the beneficial owner of, or is able directly or indirectly to control, more than 15 per cent of the ordinary share capital of the company.
“proprietary employee” is an employee of a company who is either the beneficial owner of, or is able directly or indirectly to control, more than 15 per cent of the ordinary share capital of the company.
“qualifying period” is the 3 year period, or such shorter period as the inspector may allow, ending on 31 December in the year preceding the year of assessment which is the first year of assessment of the period, in respect of which a certificate of authorisation is sought together with the period, if any, from the 1 January in the first year of assessment to the date on which the application for the certificate is received by the Revenue Commissioners.
“registered principal” means a principal included in a register of principals kept and maintained by the Revenue Commissioners for the purposes of this Chapter.
“relevant contract” is a contract, other than a contract of employment, or a contract between NAMA and a NAMA group entity or a contract between a NAMA group entity and another NAMA group entity, under which a person (“the contractor”) is liable to another person (“the principal”) to —
Where on or after 15 May, 1996, relevant operations are performed collectively by a gang or group of subcontractors, including persons in partnership, a separate relevant contract is deemed to exist between each member of the gang or group and the principal, despite the fact that any payment in respect of the work done under the contract is made to one member of the gang or group or to some other person on behalf of the gang or group.
“relevant operations” are construction operations, forestry operations or meat processing operations, as appropriate.
““relevant payment” means a payment made by a principal to whom section 530A applies in respect of a relevant contract.
“relevant payments card” is a card issued to a principal to enable him/her to keep a record of payments made to a subcontractor. The principal is obliged to apply to the Revenue Commissioners for a relevant payments card where the subcontractor produces a current certificate of authorisation.
“relevant tax deduction card” is a card on which a record of the tax deducted from subcontractors is kept.
“return period”, in relation to the principal concerned, means the period specified in a notice in writing given by the Revenue Commissioners to that principal, being a period of one or more income tax months, in respect of which the principal is required under section 531(3A) to make a return to the Collector-General.
“Revenue officer” means any officer of the Revenue Commissioners.
“subcontractor” means the contractor under a relevant contract where the principal under that contract is a person to whom section 530A applies.
“technology systems failure” means circumstances in which the electronic system put in place by the Revenue Commissioners for the operation of RCT is not functioning or is not functioning properly at any particular time such that a person is unable to comply with an obligation under this Chapter, or regulations made under this Chapter, or circumstances where a person is unable to use the electronic system at any particular time because of a general or partial systems failure of an internet service provider or of an electricity service provider, occurring in the general locality of the person’s place of business.
“uncertified subcontractor” is a subcontractor who is not a certified subcontractor.
“unreported payment notification” means a notification which has not been made to the Revenue Commissioners in accordance with 530C and where a deduction authorisation has not been issued in accordance with section 530D.
(2) Unless the context otherwise requires references to income tax include references to corporation tax, and references to a year of assessment include references to an accounting period.
(3) For the purpose of determining whether a proprietary director or a proprietary employee is the beneficial owner of, or is able to control directly or indirectly, more than 15 per cent of the ordinary share capital of the company, any shares so owned or controlled by —
are deemed to be owned or controlled by the director or employee and not by any other person.
(4) Where relevant operations under a relevant contract are carried out in the State and with effect from 1 January 2016 designated areas of the Continental Shelf, then the relevant contracts tax (RCT) system applies regardless of whether or not—
Relevant Date: Finance Act 2021