Moving/working outside Ireland - tax questions

Kiith

My wife and I are looking into moving to southern Italy, as they currently have an offer to exempt up to 90% of your salary from taxes (the very Italian sounding Lavoratori Impatriati regime). I'd keep my current job, still get paid into my Irish account, and then pay the required taxes in Italy. Obviously this requires approval from work, which i'm working on, but i want to make sure i have everything in order before talking to them.

It seems like its a fairly straightforward process, where a PAYE exemption order gets submitted for me, and then i start getting paid my gross salary (minus PRSI if possible). I then pay taxes (at a much reduced rate) in Italy.

• Can i continue to pay PRSI while i'm abroad?
• Are there any implications from a tax point of view to not paying PAYE in Ireland, specifically for when i return in 2 years?
• Anyone know if it would impact a mortgage application (i know that's not really a question for the Tax forum)
• Anything else i'm not considering?

We talked to an Italian Tax guy, who cleared up a lot of questions for us there (such as being allowed to keep my current job and still avail of the tax benefits), and i want to talk to an Irish tax person before we go, to ensure we've not missed anything, but figured i could get good advice here as well.

Marcusm

You need proper Irish tax advice as well. The Ireland/Italy tax treaty is more than 50 years old; if you perform any of the duties of the employment (such as attending meetings, training etc) in Ireland then you will still be subject to Irish income tax for the full amount of the employment income. It might suit your employment but it would not suit all employers.

Kiith

https://www.boards.ie/discussion/comment/120927911#Comment_120927911

If i'm a tax resident in Italy, would i still pay tax in Ireland if i'm only here a a few days a month? Revenue seem to be saying that you need to be there for 183 days or more (280 over 2 years) to be considered a tax resident.

Kiith

Also, since I won't be a resident for tax purposes, the paye exclusion page says that I can do 30 days in Ireland if I read that correctly.

Will still be asking for professional advice, but if anyone has any thoughts I'd appreciate it.

DFB-D

Is it all employment income?

Cutting a long story short, it will be taxable where duties are performed under Irish and Italian leg., so no need to consider double tax.

Any other income, could be taxable in both jurisdictions, then consider dble tax.

PAYE exclusion not relevant as you will be performing your duties abroad for a foreign employer.

Del2005

Has your employer got an Italian office? If not then there's little chance of them letting you work there as they will need one and setting up a business in Italy isn't easy or cheap.

GenericName

I did something similar back around 2010; i.e. lived abroad, employment income paid into an Irish bank account. Rather than have a PAYE Exclusion Order, I paid the PAYE income tax as usual but claimed it back at the end of the year. I submitted statements from my employer around the days I worked abroad along with copies of my passport stamps.

I didn’t have any issues doing it that way.

Pawwed Rig

Your company will have to register for payroll taxes in Italy.

The big problem will be what your job entails as if you are in a decision making capacity then you can potentially create a permanent establishment in Italy whereby your employer will have Italian filing obligations.

Most employers will not allow this unless they already have an Italian connection.

Kiith

Appreciate all the comments above folks...will definitely be talking to a tax accountant in the next few days.

https://www.boards.ie/discussion/comment/120928426#Comment_120928426

Yeah, we have multiple Italian offices (large multinational).

https://www.boards.ie/discussion/comment/120928379#Comment_120928379

Yeah, its all employment income (is a bonus employment income?).

And it wouldn't be a foreign employer though, right? If i'm still working for and getting paid by the Irish branch, just living in Italy? That's why i thought the PAYE exclusion would work.

https://www.boards.ie/discussion/comment/120928460#Comment_120928460

I don't really have any decision making, as I'm software dev/support. Direct line manager is based in Ireland but supports multiple regions.

https://www.boards.ie/discussion/comment/120928437#Comment_120928437

Did you have any issues with double taxation?

DFB-D

Ah sorry, assumed from the name that you were going to be seeking employment in Italy.

Yes the exclusion order will probably be granted.

Cash Bonus = income in period earned, review annual bonuses paid in year of departure.

Travel and reloc expenses - review against reliefs.

The date you leave on will determine your residency and how you deal with income. As mentioned earlier, normally the country where you perform your duties will operate PAYE, but in Ireland for example there is split year relief, so no need to pay IT on Sch E in Ireland if resident in year of departure.

Some multinationals have hypotax arrangements, so make sure you are aware of these.

It would be worthwhile getting all the information about the move and meeting with an Irish tax advisor.

Honey50000

https://www.boards.ie/discussion/2058307499/moving-working-outside-ireland-tax-questions

https://www.imidaily.com/editors-picks/how-to-live-in-italy-and-pay-a-single-digit-tax-rate-3-special-tax-regimes/#:~:text=In%20addition%2C%20those%20who%20take,90%25%20exemption%20from%20income%20tax.

Remote working does not qualify if its for a company outside of Italy then?