Living in another EU country and paying tax in Ireland

di11on

Hi folks,

I'm just wondering... if you work for an Irish company but are living in another EU country.... is it possible to pay tax in your country of residence instead of Ireland.... or is it the case that if it goes through the PAYE system, you have to pay tax in Ireland and that's it, regardless of where you live?

dbran

Hi

It will depend on what your contract of employment says and where the work is actually carried out.

It is possible to apply to the revenue for a PAYE exclusion order to have your salary paid gross without deduction of Irish PAYE and foreign payroll taxes deducted instead. You should contact your payroll department to see if such an arrangement can be put in place.

dbran

di11on

Thanks Dbran - that's very helpful.

Do I understand correctly that your foreign tax liability would be deducted in place of PAYE? Is it possible that you could be paid in gross with it being left up to you to settle your foreign taxes? I just ask this because it sounds complicated... how would they know how much foreign tax to deduct?

Thanks again

di11on

Thanks again for the advice.

I have a follow up question. If I was a director of an Irish company, along with my wife but all the work was done in another EU country - could the same be done for my director's salary? I.e. get paid in gross and them make the necessary return in France?

All the clients are Irish based but most of the work would be carried out in another EU country.

dbran

Hi

Ahh... the plot thickens

A director of an Irish Limited company exercises an office of employment in Ireland and as such not a normal employment.

Therefore it is nearly almost always the case that directors' salaries or fees will be subject to Irish taxes irrespective of where in the word they reside or where the work is done.

I believe that there are some tax structures that can be set up to get around this but I am not convinced that they work and they will definately be attacked by revenue as they are highly tax aggressive.

dbran

di11on

Hi Dbran,

Thanks - My situation is highly non-standard and I'm finding it really difficult to get solid advice.

I have a part time PAYE position which provides little over half of my income and then I have my own company which I do consultancy through. All the while I live in France except for around 42 days a year when I'm Ireland.

It looks like I would be way better off paying taxes in France as currently I'm double-paying social charges (I pay PRSI in Ireland but have to get healthcare in France and pay €3600 to the French a year for the privilege). Furthermore, if my wife earns even €1 here in France, I lose all my tax credits and low tax rate band.

Could you point me in the direction of someone who could advise me properly? It seems that accountants aren't interested in providing advice if there is no prospect of getting business from you long term.

nompere

di11on wrote: »

Hi Dbran,

Thanks - My situation is highly non-standard and I'm finding it really difficult to get solid advice.

I have a part time PAYE position which provides little over half of my income and then I have my own company which I do consultancy through. All the while I live in France except for around 42 days a year when I'm Ireland.

It looks like I would be way better off paying taxes in France as currently I'm double-paying social charges (I pay PRSI in Ireland but have to get healthcare in France and pay €3600 to the French a year for the privilege). Furthermore, if my wife earns even €1 here in France, I lose all my tax credits and low tax rate band.

Could you point me in the direction of someone who could advise me properly? It seems that accountants aren't interested in providing advice if there is no prospect of getting business from you long term.

The general EU principle is that a person will only be subject to the social security system in a single EU member state. There are regulations (Article 11 Regulation (EC) No 883/2004) for determining the Member State in which a person is subject to social security.

In the case of both social security payments and tax, it's not a case of you choosing where to pay, it's a matter of applying the two domestic systems, and taking tax treaties and EU regulations into account.

Tax advisers generally work to earn a living. If I'm gaining a long-term client then I might take a view about advice at the outset. But if I know it's a one-off consultation then I'm charging all my time.

Mr. Incognito

This is structured advice and is banned per the charter.

Youll have to pay someone for tailored advice.

Contact the irish taxation institute to find a list of aiti qualifed persons