New PAYE rules from Revenue impact globally mobile employees

26 April, 2018

What are the implications for global mobility?

On 17 April 2018, Revenue issued updated PAYE rules in relation to non-Irish employments exercised in Ireland. These long awaited changes will have direct implications for business travellers and assignees to Ireland.

The issue of Irish withholding tax obligations has been problematic for a large number of employers and their internationally mobile population (traditional assignees, short-term business visitors, commuters). Some of the new rules are helpful. Other new provisions will potentially require further engagement with Revenue and increase compliance requirements for employers.

A woman leads a boardroom meeting on global mobility.

It will take some time to see how Revenue will implement these new rules in practice. However, employers need to act now and review their own particular situation in light of the new rules. The key changes are summarised below. 

Welcome additions

  • Extension of time limit for applications for dispensations from 21 to 30 days from the employee’s arrival in Ireland.
  • Revenue are indicating that they will not penalise an employer for failure to give notice on initial arrival where it was not expected that an employee would exceed the 60-workday threshold in Ireland at the outset.
  • Clarity around Revenue’s view of “integral part of the business activities of the Irish employer” however, we feel this will remain an area of challenge as regards interpretation.
  • Guidance on the circumstances when Revenue view a recharge of costs as having taken place.
  • Expansion on the number of examples to show where a PAYE dispensation may apply.
  • Reconfirmation regarding bonuses earned prior to arrival in Ireland where paid by a foreign employer to an employee who is now working in Ireland (subject to the bonus being taxable in the jurisdiction where it was earned). This is important in the context of separate changes in Ireland which affect income being taxable on a receipts rather than an earnings basis from 1 January 2018.


  • It will remain difficult for employers to meet the new 30-day deadline to apply for PAYE dispensations.
  • The guidance around what constitutes “integral part of the business activities” includes factors such as who instructs where, how and when work is performed, and to whom the employee reports. The guidance as issued could make this a more contentious area going forward.
  • If a business traveller is working in Ireland for very short periods of time over a period of two or more consecutive tax years and breaches the 60 workdays in Ireland collectively across those consecutive tax years, an application for a PAYE dispensation will be required. This is a strange outcome but it does indicate a loss of the self-assessment approach which was available in the past. That said, most cases should still qualify for dispensation once the application is made.
  • If a role, or function is performed by different or rotating employees from a non-Irish employer on a consistent basis, an application for a PAYE dispensation is required irrespective of whether each employee spends less than 60 workdays in Ireland.
  • For people coming to Ireland from a country that does not have a Double Tax Agreement (DTA) with Ireland (e.g. Brazil), the rules are slightly tighter again. A 30-day threshold for PAYE exemption will apply but you must count visits to Ireland over two consecutive tax years, if applicable. It remains to be seen how Revenue intend to apply the rules for employees coming from non-DTA countries for more than 2 years.
  • It is important to ensure that an employee’s Irish immigration status is aligned with the tax treatment being applied.
  • The new rules apply from 1 January 2018.

What do businesses need to do now?

Companies that operate internationally need to implement robust processes for tracking employees who spend time working in Ireland. These controls and processes must be fit to meet compliance with the new regulatory requirements.

Contact us

Pat Mahon

Partner, PwC Ireland (Republic of)

Tel: +353 1 792 6186

Anne Bolster

Director, PwC Ireland (Republic of)

Tel: +353 1 792 6209

Liam Doyle

Director, PwC Ireland (Republic of)

Tel: +353 1 792 8638

Colm Waters

Senior Manager, PwC Ireland (Republic of)

Tel: +353 1 792 6531

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