eWHT consultation: PwC’s perspective

PwC welcomes the aim to modernise withholding tax processes in Ireland, but sets out significant reservations about elements of the current eWithholding Tax (eWHT) proposals.

In our recent submission to the Joint Public Consultation by the Department of Finance and Revenue, we caution that, without key safeguards, the proposed changes could intensify existing cash‑flow strain and compliance burdens under Professional Services Withholding Tax (PSWT) and Relevant Contracts Tax (RCT).

Core concerns include the risk of accelerated tax collection relative to existing preliminary tax and pay‑and‑file timelines, potential movement to near‑real‑time obligations for self‑employed taxpayers, and the introduction of a single flat rate that does not reflect businesses' cash flow needs and sectoral margin differences.

We recommend retaining the 0% rate for RCT, expanding access to a 0% for PSWT, and introducing materially reduced rates across other bands to avoid sustained working‑capital pressure—particularly for non‑resident taxpayers.

Our submission also calls for simple in‑year adjustments and timely refunds under clear reconciliation rules, retention of a manual ROS filing option (including agent filing) for those unable to integrate systems, recalibrated penalties focused on wilful non‑compliance, and published service standards for determinations and refunds.

Sequencing with EU VAT reforms (e.g. e‑invoicing/ViDA) is key to avoid overburdening taxpayers with IT and process changes and duplicative or misaligned obligations.

On extending eWHT to digital platforms, we advise caution. Layering eWHT on top of DAC7 could add material complexity, cost and GDPR challenges, risk competitive distortions, and create structural cash‑flow issues for low‑margin sellers due to gross‑basis withholding and delayed relief.

We recommend pausing until there is clearer international/EU convergence. If work proceeds, however, we propose consultation on a detailed “strawman” covering scope, proportionality, thresholds, operational feasibility, data protection and cash‑flow impacts.

Overall, our submission supports modernisation that is proportionate, operationally feasible for all taxpayers, and which acts to improve the current scheme, anchored in legal and administrative certainty.