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Ireland Explains Tax Rules For Payments To Non-Resident Landlords

by Jason Gorringe, Tax-News.com, London

18 October 2019


The Irish Revenue has updated its Tax and Duty Manual on the taxation of non-resident landlords to clarify a number of obligations.

TDM Part 45-01-04 clarifies the obligation of a tenant to deduct standard rate income tax from rents paid directly to a non-Irish resident landlord, and remit such tax to Revenue. The standard rate is 20 percent.

The TDM states that, strictly, the tenant should account for the tax immediately after it is deducted, but Revenue will allow tenants to remit the tax deducted from the rent when filing a return of income for the tax year. For tenants whose sole income is subject to Pay As You Earn, recovery of the tax deducted can be achieved by an adjustment of tax credits.

In cases where rent is paid by persons other than tenants – such as local authorities or housing authorities – standard rate income tax must likewise be deducted from the rent and remitted to Revenue.

Where a tenant pays rent to an Irish collection agent of a non-resident landlord, the tenant is not obligated or entitled to deduct income tax from the rent.

The landlord is assessable and chargeable to income tax in the name of the Irish collection agent. The collection agent should be set up under a new Personal Public Service number. The agent is not entitled to deduct tax from the rent on payment to the landlord, but may retain a sufficient portion of the rent to satisfy the tax payable. This should be paid to Revenue when filing the tax return.

The assessment is in the name of the collection agent, but the tax to be charged is the amount which would be charged if the non-resident landlord was assessed in their own right.

TAGS: compliance | tax | tax compliance | Ireland | real-estate | tax credits | tax authority

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