Do foreigners not pay tax in same way as Irish people?

biggebruv · 24-06-2019 12:25pm #1

The reason I ask is
My co worker does not get tax deducted from the wage every week but does for PRSI and USC

How come this is? I get taxed every week I’m actually on more money but come out with less because of this it does not seem fair anybody any info on this?

Captain_Crash · 24-06-2019 12:31pm

Don't quote me as its been 14 years since I've lived abroad, but I believe that you can pay tax in either your country of residence, or your country of origin should you be living abroad. So if your from lets say Spain, and the income tax is much less than here, you can pay tax in Spain while working here.

I lived in Canada and paid tax in Canada so I've no personal experience, but I do remember being given the option to pay here instead (Canada was a lesser tax rate, hence paying there)

amcalester · 24-06-2019 12:33pm

He may not be earning enough to pay income tax.

RobbieTheRobber · 24-06-2019 12:36pm

biggebruv wrote: »

The reason I ask is
My co worker does not get tax deducted from the wage every week but does for PRSI and USC

How come this is? I get taxed every week I’m actually on more money but come out with less because of this it does not seem fair anybody any info on this?

People who are resident here for tax purposes are taxed the same as Irish nationals who are resident here for tax purposes.

There could be many reasons for differences in tax.
Is your colleague consider resident for tax purposes.
if resident has your colleague recently moved here, and so would have no earnings for this year.

https://www.citizensinformation.ie/en/money_and_tax/tax/moving_country_and_taxation/tax_residence_and_domicile_in_ireland.html

TaurenDruid · 24-06-2019 12:43pm

biggebruv wrote: »

The reason I ask is
My co worker does not get tax deducted from the wage every week but does for PRSI and USC

How come this is? I get taxed every week I’m actually on more money but come out with less because of this it does not seem fair anybody any info on this?

Short answer: yes, foreigners employed in Ireland are taxed exactly the same as Irish people.

Different people, though, will have different tax credits depending on things like how much they've earned so far in the year. An Irish guy who starts in your place tomorrow and who hasn't worked yet this year will also pay no tax.

dennyk · 24-06-2019 5:15pm

Can confirm; I'm a foreigner and I definitely pay income tax. Probably there's some other situation affecting your co-worker's tax withholding, not the fact that they aren't an Irish citizen.

Captain_Crash wrote: »

Don't quote me as its been 14 years since I've lived abroad, but I believe that you can pay tax in either your country of residence, or your country of origin should you be living abroad. So if your from lets say Spain, and the income tax is much less than here, you can pay tax in Spain while working here.

That's definitely not how it works, absent some very unusual circumstances. Perhaps you're thinking of the "split-year treatment" option where you can choose to be considered tax-resident during your first year residing in Ireland even if you weren't here for the full 183 days during that year? That only applies to your first tax year residing here and only if you're going to be physically present long enough to be tax-resident in the following year, though, and it may or may not have any impact on the taxes you might owe in whatever foreign country you moved from (it would depend entirely on their own tax laws and any tax treaties they might have with Ireland). There's also no such thing as a "reverse" split-year option where you could elect *not* to be tax-resident in Ireland if you meet the physical presence requirements for tax residency.

Stopitwillya · 24-06-2019 5:18pm

I am a foreigner too but I pay no income tax here but pay prsi and usc. Pay my income tax in Estonia, which is only 7% compared to 20% here and 40%.

dennyk · 24-06-2019 5:37pm

Stopitwillya wrote: »

I am a foreigner too but I pay no income tax here but pay prsi and usc. Pay my income tax in Estonia, which is only 7% compared to 20% here and 40%.

Are you posted here temporarily on a short term work assignment, or do you actually reside in Ireland full time? PAYE income tax can only be excluded in certain limited circumstances. If you are residing in Ireland for more than 183 days a year and performing work here, you should almost certainly be paying income tax in Ireland, and Revenue will likely catch up with you eventually if you aren't paying taxes properly or you or your employer have misrepresented your situation to avail of a PAYE exclusion order.

TaurenDruid · 25-06-2019 9:51am

Stopitwillya wrote: »

I am a foreigner too but I pay no income tax here but pay prsi and usc. Pay my income tax in Estonia, which is only 7% compared to 20% here and 40%.

Huh. When did you renounce the Irish citizenship that you held, based on other threads you've posted in?

Captain_Crash · 25-06-2019 10:46am

dennyk wrote: »

Can confirm; I'm a foreigner and I definitely pay income tax. Probably there's some other situation affecting your co-worker's tax withholding, not the fact that they aren't an Irish citizen.

That's definitely not how it works, absent some very unusual circumstances. Perhaps you're thinking of the "split-year treatment" option where you can choose to be considered tax-resident during your first year residing in Ireland even if you weren't here for the full 183 days during that year? That only applies to your first tax year residing here and only if you're going to be physically present long enough to be tax-resident in the following year, though, and it may or may not have any impact on the taxes you might owe in whatever foreign country you moved from (it would depend entirely on their own tax laws and any tax treaties they might have with Ireland). There's also no such thing as a "reverse" split-year option where you could elect *not* to be tax-resident in Ireland if you meet the physical presence requirements for tax residency.

It was an awful long time ago so can’t be sure of specifics but did have forms to fill in and one of the options I did have (and I remember it because I clarified with the Canadian tax office) was where to pay my income tax, might have been to do with the visa I had as it was a working holiday visa and I was never a permanent resident

Peregrinus · 26-06-2019 2:20am

The general rule in double tax treaties is that tax on employment earnings is payable in the country where you are employed. So somebody working in Ireland would pay income tax in Ireland on their earning from their Irish job, regardless of their own nationality.

However things can get complicated. Suppose I'm employed in Ireland, but I have to go to London for a meeting. Obviously, I don't pay income tax in the UK on one day's earnings, and in Ireland on the earnings for the other 364 days. I'm employed in Ireland for the whole year, even if the my employment requires some travel, and sometimes I am in a foreign country when discharging the duties of my employment.

Which brings us to posted workers. I am employed in (say) Estonia but I am posted for period to (say) Ireland. I am considered to be in an Estonian employment throughout, and pay income tax on the earning from my employment in Estonia.

There are rules about this, but I have no idea of the details of those rules. But, at a guess, my employment does have to be a genuine Estonian employment, and the amount of time I can spend in another country discharging the duties of that employment without becoming taxable there will be limited.

Do foreigners not pay tax in same way as Irish people?

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