530F Obligation on principals to deduct tax

Summary

Section 530F sets out the obligations on principals to deduct tax in accordance with a deduction authorisation. It sets out the penalty that a principal is liable for when they fail to do so. It imposes an obligation on principals to submit an unreported payment notification in such circumstances. It also sets out information to be provided by the principal to subcontractors regarding relevant payments. The section also sets out the position where a principal is unable to submit a payment notification due to persistent technology systems failure.

Details

(1) A principal to whom a deduction authorisation has issued must deduct tax from the relevant payment in accordance with the terms of that deduction authorisation.

(2) A principal contractor who is obliged to operate RCT and who makes a relevant payment to a subcontractor other than in accordance with the deduction authorisation shall be liable to a penalty of -

(2)(a) 35% of the relevant payment where the subcontractor has not had a determination made by the Revenue Commissioners under section 530I.

(2)(b) 20% of the relevant payment where the subcontractor has had a determination made under section 530I and where neither section 530G nor section 530H applies to the subcontractor.

(2)(c) 10% of the relevant payment where the subcontractor is a person to whom section 530H applies.

(2)(d) 3% of the relevant payment where the subcontractor is a person to whom section 530G applies.

(3)(a) Where subsection (2) applies a principal must submit an unreported payment notification.

(3)(b) The Revenue Commissioners shall make regulations in relation to the submission of unreported payment notifications.

(4) A principal making a relevant payment, from which RCT was deducted, to a subcontractor must give either a copy of the deduction authorisation or the details contained in the deduction authorisation to the subcontractor.

(5) The tax which a principal is due to deduct from a relevant payment shall be due and payable to the Revenue Commissioners for the return period in which the payment is made.

(7) If due to persistent technology systems failure a principal is unable to submit a payment notification and has no option but to make a payment to a subcontractor without submitting the notification, then that principal shall not be liable for a penalty under subsection (2) if the principal -

(7)(a) Deducts tax at the rate last notified to the principal for the subcontractor or if there was no such notification at a rate of 35%

(7)(b) Immediately after the resolution of the technology systems failure, submits a payment notification.

(7)(c) Provides all details regarding the payment to the Revenue Commissioners.

(7)(d) Pays the tax deducted by the due date.

(8) Where a principal complies with the requirements of subsection (7) the principal shall be deemed to have deducted tax in accordance with a deduction authorisation and the payment shall be deemed to have been made in the return period in which the principal submits the notification under subsection (7)(b).

(9) Where requested to do so by the Revenue Commissioners a principal must provide full details of the persistent technology systems failure.

Relevant Date: Finance Act 2025