Updated PAYE rules from Revenue on foreign employments

17 July, 2020

The Irish Revenue have issued their update on the requirements to operate PAYE when foreign employees exercise employment duties in Ireland. This update was promised in the announcement made in December 2019, but was worth the wait as it contains some good news, particularly in relation to short term business visitors to Ireland.

The changes, which apply from 1 January 2020, provide employers with significant clarity on the number of workdays a foreign employee can spend in Ireland without triggering a PAYE obligation. In addition, the alignment of the PAYE obligation with the conditions contained in the Employment Article of the relevant Double Taxation Agreement (DTA), will help with cash flow as the exemption from Irish tax available under the relevant Double Taxation Agreement will be given in “real time”, removing the necessity to claim such refunds after the year end. While employers will still need to ensure they have processes in place to track business travellers, these changes mean the administration involved is substantially reduced.

Key changes

Effective from 1 January 2020, the key changes are as follows: 

When counting the number of work days spent in Ireland each year is considered on a stand alone basis. 

  • Exemption from the requirement to operate PAYE will be based on meeting the exemption provisions of the Employment Article in the relevant Double Taxation Agreement. 
  • The actual legal relationship between the individual & the employer will be taken into account, therefore the nature of the role & the duties being performed in Ireland do not need to be considered by the employer. 
  • Management charges with a markup will not be considered recharges for the purpose of meeting the exemption provisions of the Employment Article of the relevant Double Taxation Agreement. 
  • Simplification of the process to apply for a PAYE Dispensation. The application may include multiple employees but must include confirmation that the exemption provisions contained in the Employment Article of the relevant Double Taxation Agreement are met. 
  • For employees who come to Ireland, from a non-DTA country, an obligation to operate PAYE will only arise where the employee will spend more than 30 work days in Ireland. 

Summary of PAYE rules

The summary of PAYE rules which apply from 1 January 2020 is as follows:

Number of days spent in Ireland

From DTA Country

From Non-DTA Country

Less than 30 work days in the tax year

No PAYE Obligation

No PAYE Obligation

Between 30 and 60 work days in the tax year

No PAYE Obligation*

PAYE Obligation

More than 60 work days but less than 183 days in the relevant period specified in the DTA**

PAYE Obligation unless a PAYE Dispensation is obtained from Revenue

PAYE Obligation

183 days or more presence in the tax year or in the relevant period specified in the DTA**

PAYE Obligation

PAYE Obligation


* Subject to the conditions of the Employment Article in the relevant Double Taxation Agreement (DTA) being met

**The relevant period will be specified in the Employment Article of the applicable DTA

Contact us

Anne Bolster

Director, PwC Ireland (Republic of)

Tel: +353 1 792 6209

Kathryn Brady

Director, PwC Ireland (Republic of)

Tel: +353 1 792 6428

Sheila Glynn

Senior Manager, PwC Ireland (Republic of)

Tel: +353 1 792 5545

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