Revenue Note for Guidance

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Revenue Note for Guidance

530P Treatment of tax deducted

Summary

Section 530P provides that RCT deducted shall be treated as a payment on account of income tax or corporation tax; that RCT deductions will be available for offset against other tax liabilities of a subcontractor; that RCT deductions which are not required to meet the income tax or corporation tax liability of a subcontractor, or are not required to meet other tax liabilities of a subcontractor will be available for refund, subject to the provisions of section 865 governing the repayment of tax; that no amount of RCT deductions shall be treated as a payment on account, set off or refunded more than once; and that no amount of RCT deductions set off or refunded shall be treated as a payment on account.

Details

(1) Where a principal deducts tax from a payment in accordance with a deduction authorisation such tax shall be treated as a payment on account of either income tax where the tax was deducted in the basis period for a tax year or corporation tax where the tax was deducted in an accounting period of a company.

(2) For the purposes of the RCT legislation tax treated in accordance with subsection (1) shall be known as deducted tax.

(3) Deducted tax is available for offset against other tax liabilities (within the meaning of section 960A) of the subcontractor and the Revenue Commissioners shall notify the subcontractor of any offsets made.

(4) When the income tax or corporation tax liability for a subcontractor for a chargeable period has been finalised, any deducted tax that is not required to meet either the income tax or corporation tax liability of the subcontractor or which has not been offset against other liabilities may, subject to section 865, be repaid to the subcontractor.

(5) No repayment of tax deducted shall be made except in accordance with section 4.

(6) Deducted tax shall not be treated as a payment on account, set off or refunded more than once and no amount of deducted tax that is refunded or offset shall be treated as a payment on account.

Relevant Date: Finance Act 2025