The relief allows for a 30% reduction in taxable income on income between €100,000 and €1,000,000.

It is vital that the employee in conjunction with their employer considers eligibility for the relief prior to agreeing the terms of any secondment to Ireland. Unfortunately, we have seen some live cases where no Irish tax advice was taken prior to the employee’s move to Ireland which resulted in the employee inadvertently missing out on this valuable income relief.

Conditions of the Relief

The conditions that must be satisfied to claim this relief are as follows:

• The employee must be in receipt of relevant employment income of at least €100,000 in the year,
• The employee be a relevant employee meaning:
  • They must have been a full-time employee of the employer for a period of at least 6 months prior to their arrival in Ireland,
  • There are strict conditions regarding how many days the employee can spend in Ireland in the 6 month period prior to their Irish secondment.
  • They must not have been resident in Ireland in the 5 years prior to their arrival,
  • They must perform their duties in Ireland for a period of at least 12 months,
  • They must hold an Irish PPS Number within 90 days of their arrival.
• The employer must also be a relevant employer meaning that they are resident in a country with which Ireland has a Double Tax Agreement.

Filing Requirements and Claiming the Relief

There are a number of filing requirements in relation to this relief for both the employee and the employers, as follows:

• The employer must file a Form SARP 1A with Revenue within 90 days of the employee’s arrival in Ireland.  From 1 January 2024, this form must be filed online via Revenue’s Online System (ROS). Where this cannot be filed online, the employer must request to supply the information manually to Revenue in writing which can be a time-consuming process.
  
  This Form requires the PPS number of the employee; therefore, it is vital that the employee sets about obtaining an Irish PPS Number as soon as they arrive in the state.
• The employer is also required to file an annual return with Revenue by February 23rd in the year following the SARP claim.
• On the employee side, because of claiming SARP relief, they become a Chargeable Person and are therefore required to file an Irish Income Tax Return (Form 11) by 31st of October in the year following their claim.

Additional Points to Note

Some additional points to be aware of in relation to SARP relief include:

• This relief  only provides a reduction in  Income Tax and does not reduce the income subject to USC & PRSI (social security).
• This relief can be claimed for a maximum of 5 years consecutively.
• As part of relief, the employee will also receive costs associated with one return trip home for employee and their spouse/children and school fees up to €5,000 per annum for each child.

Final Thoughts

SARP relief is a very useful and effective relief when it is available to a seconded employee.

However, it is vital that the employee sets about obtaining an Irish PPS number as soon as possible after their arrival into the State. Whilst Revenue and the Department of Social Protection have taken steps to speed this process up, the wait time for an PPSN application can be up to 8 weeks.

If the PPSN is not obtained and the SARP1A is not filed by the employer within 90 days of arrival, the relief is likely to be denied by Revenue.

As with all international secondments, the key is to obtain proper tax advice in advance of the move to Ireland.