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Becoming non-resident and tax

  • 30-11-2017 6:18pm
    #1
    arten
    Registered Users, Registered Users 2 Posts: 1 ✭


    Hi guys,
    I have a question regarding residency/non-residency and tax in Ireland. I am an EU national.
    I arrived in ROI from another EU country late July with the intention of staying and working there for one year. However, my employment contract ended after 3 months and in late October I left Ireland and went to another EU country (not the country of my origin).
    I was allocated 3300 EUR tax credit on cumulative basis and in the payslips for August, September and October no tax was deducted. 
    I informed the Revenue about my departure and I was told that my whole worldwide income will be taxable in Ireland and since my status changed to non-resident, the amount of allocated tax credits may be reduced and this may result in a tax liability. 
    Today I received a payslip for the last week of employment (in October). It said that I'm on week 1 basis, there is no tax credit and the pay was taxed with "higher tax" (not "standard tax"). Around 40% was taken.
    Do you know how to deal with this situation? Will the tax credit I received be reduced to 0 and I will have to pay back all the tax that was not deducted during the first 3 months? Am I able to claim a refund from the 40% that was taken now?
    Thanks in advance for your help.


Comments

  • #2
    nokia3310
    Registered Users, Registered Users 2 Posts: 20 ✭nokia3310


    If you are non-resident your total worldwide income would not be taxable in Ireland, but evidence of your worldwide income would be needed to calculate the level of tax credits you would be entitled to. You are entitled to tax credits but you may get a reduced amount rather than the full 3300.

    Your credits are calculated based on the ratio of your Irish income over your worldwide income so it's worked out as follows:

    Irish income x 3300 = your tax credits
    Total income

    However if your Irish income is more than 75% of your worldwide income then you will get full tax credits. If at the end of the year you submit a statement of earnings from the tax office(s) where you worked into Revenue they will work this out and issue you a P21 Balancing Statement and any money due.


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