Revenue Note for Guidance
The section provides for what is known as split year treatment. It is aimed at the foreign employment earnings of those persons who only spend part of a tax year in the State but who are, nevertheless, resident in the State in that year by reference to the rules of residence. It applies, therefore, to persons making a permanent move to or from the State during the course of a tax year. Thus, in the case of a person moving to the State, the treatment afforded by the section is only to apply where the person is likely to be resident in the State in the following year. Likewise, where a person is moving from the State, it is only to apply where the person will not be resident in the following year. Since these persons may be resident for the year of arrival or departure, they would consequently be taxable on any foreign earnings earned either before arrival in, or after departure from, the State. To ensure that this does not happen and to preserve previous administrative treatment, the section provides that in these cases residence is deemed to commence only on the date of arrival in the State or cease from the date of departure from the State. The effect of this is to attribute non-residence to that part of a tax year for which the person is not in the State. In this way the foreign earnings of residents arising in the part of the tax year for which they are treated as not being resident are not taxable.
Relevant Date: Finance Act 2021