Domicile vs Residency taxes

Dubliner11

Hi,

I am working in Dublin as an IT contractor (director of an umbrella company) and I would like to pay my taxes in my country of citizenship, which is also part of EU, but I was told by my accountant that even if I register my company in my country, I'd still have to pay Irish taxes because I live here for more than 180 days.

But another contractor friend told me that I can register myself as having my domicile in a different country, even if I am resident in Ireland, and in that case I could pay my taxes there instead of Ireland.

Is that possible?

Thank you very much,
A

barneystinson

Dubliner11 wrote: »

Hi,

I am working in Dublin as an IT contractor (director of an umbrella company) and I would like to pay my taxes in my country of citizenship, which is also part of EU, but I was told by my accountant that even if I register my company in my country, I'd still have to pay Irish taxes because I live here for more than 180 days.

But another contractor friend told me that I can register myself as having my domicile in a different country, even if I am resident in Ireland, and in that case I could pay my taxes there instead of Ireland.

Is that possible?

Thank you very much,
A

Short answer, no.

Lockedout2

Dubliner11 wrote: »

But another contractor friend told me that I can register myself as having my domicile in a different country, even if I am resident in Ireland, and in that case I could pay my taxes there instead of Ireland.

You should get your friend to do your tax returns, your accountant clearly has not got a clue.

Dubliner11

Yeah, the other contractor clearly uses that so it must be possible.
His home country is also part of the EU.

Thanks for your replies!

Lockedout2

:-)

what recession?

Dubliner11 wrote: »

Yeah, the other contractor clearly uses that so it must be possible.!

If your friend jumped off a building, would you? My point being that just because he does it, does not mean it is correct or advisable! Our tax system is 'self assessment' so you can technically do anything you want, but you are responsible for your return being correct and if you are caught for doing something wrong then the penalties are severe.

You need to get professional advice, and if you are not satisfied with the knowledge of your current accountant then find someone who has experience dealing with the affairs of other foreign contractors in Ireland - but you shouldn't disregard their advice just because it's different to what your friend says he does (because he might be very, very wrong). Essentially, if you are 'tax resident' in Ireland (which is decided based on the days you spend here) and you are earning money from carrying out a trade/profession/employment in this state, then you will likely find that you are liable to tax here in Ireland. Your tax residence position is more important than your domicile.

JoeSoaped

Tax Resident and Non-Domiciled- Pay tax on Irish source income and income that has been remitted to Ireland after you have become resident.

thegolfer

Dubliner11 wrote: »

Hi,

I am working in Dublin as an IT contractor (director of an umbrella company) and I would like to pay my taxes in my country of citizenship, which is also part of EU, but I was told by my accountant that even if I register my company in my country, I'd still have to pay Irish taxes because I live here for more than 180 days.

But another contractor friend told me that I can register myself as having my domicile in a different country, even if I am resident in Ireland, and in that case I could pay my taxes there instead of Ireland.

Is that possible?

Thank you very much,
A

Being Irish tax resident will mean that you pay tax on your Irish sourced income. In the State in excess of 183 day's or more, or 280 days over two years, on the look back basis.

The Irish company that you are director of, will always be taxed in the state. Directorships are an office and as such will always be taxed here.

Setting up a foreign company, and trading here would also have an impact, I suspect. Though not incorporated here, would be managed and controlled in Ireland, by you, thus being tax resident in the state. The company would effectively be trading here through a branch, and thus subject to tax here.

Any relevant DTA, would most likely point to there being an establishment here also.

Thus any payments taken as salary by you, would also be taxable here, as the company would require to be registered for PAYE purposes in the State, and possibly VAT too.

Your domicile cannot be changed as readily suggested, it requires considerable planning, and effectively cutting all ties, forever, to your home state, and establishing in a new State.

If you were Irish domiciled and resident, then you would pay tax in Ireland on your worldwide income.

If resident only you pay tax on your Irish sourced income, and any foreign income remitted into the State.

Your friend may be referring to paying his PRSI contributions and keeping up his payments back home, with a view to returning in a few years.

Dubliner11

Thank you very much for your replies!!

I just want to know my options, I don't want to do anything illegal. I treasure my freedom but also the effort I put in earning my living.

Can you please tell me more details about this:
"Your friend may be referring to paying his PRSI contributions and keeping up his payments back home, with a view to returning in a few years."

Under which circumstances can he pay only PRSI in Ireland and the rest in his home country? as you mentioned many rules:
"Though not incorporated here, would be managed and controlled in Ireland, by you, thus being tax resident in the state. The company would effectively be trading here through a branch, and thus subject to tax here."

The "control/management" of my company is decided based on my residence, not domicile, as the director of the company that's offering services in Ireland and has to pay taxes?
I'd like to have all my accounting done in my home country and I'll be paying Revenue myself directly through its ROS site whatever Irish taxes are necessary, if possible; and the rest I'll pay in my home country. I was told that it's still good to have an accountant in Ireland in case Revenue wants to contact me, as I don't understand many of their terms and laws yet, nor do I have time to keep up to date with them.

I am only giving services here for a while and I'm using in Ireland only 20% of my net earnings. And every month all my net earnings go in my bank account outside Ireland because I did not considered it necessary to open another account everywhere I move with work, if it's possible.

Ireland has a DTA with my country: revenue.ie/en/practitioner/law/tax-treaties.html
"For the purposes of this Convention, the term "resident of a
Contracting State" means any person who, under the laws of that
State, is liable to tax therein by reason of his domicile, residence,
place of management or any other criterion of a similar nature. But
this term does not include any person who is liable to tax in that
State in respect only of income from sources in that State ."
Is not clear to me how they choose the "reason" that makes me liable to be taxed in the State, but I haven't read it all yet :-)

Thank you very much!
A