Tax Relief for Expats in Ireland
SARP, which stands for special assignee relief programme, is a highly valuable income tax relief targetted at expats coming to work in Ireland.
The relief exempts up to 30% of salary from income tax up to €1m.
In addition to significant tax savings, expats can also receive several tax-free benefits including:-
- One “home leave” trip per year for the expat and his/her family, and
- Payment of school fees of up to €5,000 per child per annum.
SARP is highly value and it should be seriously considered by expats and companies (espcially those companies that operate tax equalisation models).
Where SARP relief applies, the amount of qualifying income liable to tax in Ireland is reduced by 30% for up to 5 years.
Relief is available to expats with a minimum salary of €75,000 up to an annual limit of €1,000,000.
The relief applies to individuals arriving to work in Ireland up to the end of 2020 and it can then be claimed for five years.
In calculating whether the minimum salary condition is met, benefits in kind, bonuses, termination payments, and share-based remuneration is excluded. However these items qualify for relief in full once the access condition is met.
Some of the above can be structured to access relief with careful planning.
To qualify for SARP tax relief an individual must:
- have a base salary of at least €75,000
- meet certain conditions of employment in the period 6 months before coming to Ireland.
- acquire Irish residence
- Come to Ireland to perform duties for their employer or an associated company of their employer.
- Have been non-Irish resident in the five years before the year of arrival.
- Make the necessary application within 90 days of arrival.
Revenue have temporarily agreed to extend the application process to 150 days to submit the necssary SARP application. Revenue may extend the deadline even further in exceptional circumstances.