SARP (Special Assignee Relief Programme) is an Income Tax relief available to certain individuals who have been assigned by a relevant employer to work in Ireland, either for that employer or an associated company of that employer. The relief can be claimed for five consecutive tax years and is currently available to qualifying employees arriving in the years up to, and including, 2020. The aim of SARP relief is to encourage multinational employers to redeploy talented employees into key positions within Ireland.
SARP can be claimed by employees who meet the following criteria:
It is important to note that employees who avail of SARP cannot claim any of the following:
Under SARP relief, 30% of all income* over a threshold of €75,000 is exempt from income tax. For example; an employee who is paid €175,000 will not pay income tax on €30,000 of that income (€175,000 – €75,000 x 30%). The marginal rate of income tax is 40%, so the value of the relief in this instance would be €12,000.
The cost of one return trip for the employee and his or her family to their home country can be claimed tax free from their employer, as well as up to €5,000 per child for Irish school fees.
The employer must apply for SARP relief by completing a Form SARP 1A and submitting it to Revenue within 30 days of the employee’s arrival in the country. If more than one employee is claiming SARP, the employer must submit a separate Form SARP 1A for each employee.
Employers are obliged to file a SARP Employer Return, containing the pay and tax details for each SARP employee, to Revenue by 23 February following the year end in which SARP was claimed.
SARP employees are considered ‘chargeable persons for self-assessment’ by Revenue, which means they must file a Form 11 (Income Tax Return) to Revenue by 31 October following the year in which SARP was claimed.
At EisnerAmper Ireland, our dedicated team of outsourced payroll professionals possess the knowledge and experience required to assist employers claiming SARP relief for their staff. From the initial application process and the monthly calculations, right through to the filing of the employer return, we can provide expert advice and insight every step of the way.
Our income tax specialists are also on hand should your employees require any advice and assistance with their income tax filing obligations. Learn more about our outsourced payroll services here.
* From 1 January 2019 the government plan to introduce a ceiling of €1 million on eligible income.Payroll Insights