SARP for Employers
What is SARP relief?
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 conditions of qualification – what employers need to know
SARP can be claimed by employees who meet the following criteria:
- The employee must have worked for their relevant employer outside of Ireland for the six months immediately prior to being employed here;
- They must be contracted to work in Ireland for a minimum period of 12 months from the date they are first assigned here;
- They must not have been tax resident in Ireland for the five years immediately prior to being assigned here;
- They must be tax resident in Ireland for all of the years in which they claim SARP relief; and
- Their basic salary must be a minimum of €75,000 per year.
It is important to note that employees who avail of SARP cannot claim any of the following:
- Foreign Earnings Deduction;
- Cross Border Relief; and
- Research & Development Relief.
SARP for employers – how to calculate SARP
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 exemption can be spread proportionately across the year, so the threshold for a monthly paid employee is €6,250 per month.
- Expense reimbursements and any amounts contributed into pension schemes cannot be included in the calculations for SARP.
- The exemption is limited to income tax only, so USC and PRSI should be deducted as normal.
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.
SARP application – how to claim SARP
The employer must apply for SARP relief by completing a Form SARP 1A and submitting it to Revenue within 90 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.
Employer / employee SARP reporting
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.
How EisnerAmper Ireland can help
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.
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* From 1 January 2019 the government plan to introduce a ceiling of €1 million on eligible income.
Latest News →Budget 2019 Payroll Considerations
With Budget 2019 announced, EisnerAmper Ireland examines its effect on take home pay and employer costs from 1 January 2019.
Income Tax
The most eye-catching of the measures introduced in Budget 2019, from an employee’s perspective, is the €750 increase in the 20% income tax rate ceiling (€1,500 for dual income households). This represents a potential increase in take home pay of €150 (€300 for dual income households). Other changes to income tax include a €300 increase in the home carer tax credit, and a €200 increase in the earned income tax credit – which will benefit proprietary directors.
Universal Social Charge (USC)
Other changes which will impact positively on most employees are in relation to USC. The 2% rate ceiling has been increased (see below), and rate band 3 (currently 4.75%) will be reduced to 4.5%. Overall the changes in USC rates could be worth up to €139 per year for those with higher incomes.
National Minimum Wage
An increase in the national minimum wage, from €9.55 per hour to €9.80 per hour, in and of itself should not affect the income of higher earners, however, to prevent full-time minimum wage earners from moving into a higher USC rate band the Minister for Finance and Public Expenditure & Reform, Paschal Donohoe TD, announced an increase in the 2% rate ceiling. This will benefit all employees with an annual income of over €19,372.
For employers, the national minimum wage increase has necessitated an increase in the employer PRSI higher rate threshold, which is a positive measure, although, an 0.1% increase in employer PRSI at both the lower and higher rates will have a negative impact on employer costs. It was also announced that there will be a further 0.1% increase in employer PRSI from 1 January 2020, which will see the higher rate at 11.05%.
For more information on Budget 2019 read our Budget 2019 Tax Considerations here.
Learn more about our outsourced payroll services here.
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Request a payroll quote or request a callback from our specialists now.
Payroll Insights →Payroll Insights Series – Welcome
Welcome to EisnerAmper Ireland’s Payroll Insights Series. Here, our payroll specialists will provide insights into upcoming industry developments along with tips and resources to help you ensure your payroll compliance and maximise the business and employee value of your payroll function.
Stay up to date with our Payroll Insights Series
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Learn more about our outsourced payroll services here.
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Request a payroll quote or request a callback from our specialists now.
Payroll Insights →EisnerAmper London hosts official launch event
EisnerAmper hosted its London Office Inauguration event at The Conduit in Mayfair, London on Tuesday 9 October, 2018. Over 200 financial services executives and key professionals within the asset management industry attended the event.
It was an exciting evening that featured guest speaker, Mark Littlewood, Director General of the Institute of Economic Affairs. EisnerAmper US CEO Charles Weinstein and the head of EisnerAmper’s London office Robert Mirsky also spoke at the event.
Robert Mirksy addressing the crowd at EisnerAmper’s London launch
Mark Littlewood speaking at EisnerAmper’s London launch event
Charles Weinstein at EisnerAmper’s London launch
At EisnerAmper, we design business & compliance solutions to make your regulated business model better.
We help Alternative Investment & Private Equity Fund Managers and Fund Administrators meet their assurance and reporting requirements. For UK fund queries, please contact Robert Mirsky. For Irish fund queries, contact Ray Kelly.
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Latest News →Tax Insights Series – Welcome
Welcome to EisnerAmper Ireland’s Tax Insights Series. Here, our tax specialists will provide insights into upcoming industry developments along with tax tips and resources to help you ensure that your company is compliant with appropriate tax obligations.
Stay up to date with our Tax Insights Series
To keep up to date with our Tax Insights Series follow us on LinkedIn now.
Learn more about our Tax Services here.
Tax Insights →Budget 2019 Tax Considerations
With Budget 2019 announced yesterday, EisnerAmper Ireland examines its effect on Irish-based businesses across the following four areas:
- Corporation Tax
- Indirect Tax
- Employment Tax
- Personal Tax
1. Corporation Tax
Relief from corporation tax for certain start-up companies
The Minister for Finance and Public Expenditure & Reform, Paschal Donohoe TD, announced that the relief is to be extended for a further three years. The relief will, therefore, be available to companies which commence qualifying trades in the period up to 31 December 2021, where relevant conditions are met.
As this relief is linked to the amount of employer’s Pay Related Social Insurance (PRSI) paid by a company in each accounting period, it continues to support job creation in the start-up sector. A company can benefit from a maximum tax credit of €40,000 per annum in its first 3 years of trading.
Accelerated Capital Allowances for Employer-Provided Fitness and Childcare Facilities
This measure, introduced in Finance Act 2017, is being amended and will commence with effect from 1 January 2019. Its purpose is to incentivise employers to provide fitness and/or childcare facilities for the use of their employees, by providing an accelerated deduction for the capital investment costs incurred.
Exit Tax
In line with European Union Anti-Tax Avoidance Directive (ATAD), the Minister announced changes to the existing Irish Exit Tax regime. These changes are in effect from 10 October 2018.
Under ATAD, EU member states are required to introduce or update existing rules to ensure they are in line with EU provisions by 1 January 2020. These rules seek to tax unrealised gains where assets are migrated from Ireland, and as a result, are removed from the scope of Irish tax. Any gains falling under this provision will be subject to tax at 12.5%, rather than the existing Capital Gains Tax (CGT) rate of 33%. There are specific anti-avoidance rules which prevent transfers/migrations benefitting from the 12.5% rate if the main purpose of the transaction is to benefit from the lower tax rate on unrealised gains.
There are no longer exemptions from exit tax for certain companies which are foreign-owned.
Controlled Foreign Company (CFC) Rules
The Minister announced that CFC rules will be introduced for accounting periods commencing on/after 1 January 2019. The CFC rules will be included in the Finance Bill 2018, to be published on 18 October 2018.
Transfer Pricing (TP)
The Minister noted that a review of Ireland’s TP regime would be conducted in 2019, including a public consultation. It was previously confirmed that updated TP legislatiocn will be included in Finance Bill 2019. These updates will also include the formal adoption of the OECD’s 2017 TP Guidelines into Irish domestic legislation.
2. Indirect Tax
VAT increases
The VAT rate for the tourism and hospitality sectors will increase to 13.5% with effect from 1 January 2019. This VAT rate had been reduced to 9% in 2011 as part of a stimulus measure and Budget 2019 has returned to the pre-recession rate for these sectors.
The increased VAT rate will apply to restaurant and catering services, hotel and holiday accommodation, shows, exhibitions and cultural facilities. In addition, disposal of waste material, repair and maintenance services, hairdressing services and the supply of live horses and greyhounds will return to the pre-2011 rate. Such an increase will result in an additional €466 million for the Exchequer but has been heavily criticised by the industry.
Other Indirect Tax considerations
The 9% VAT rate will continue to apply to printed newspapers and sporting facilities.
The VAT rate on electronically supplied publications will be reduced from 23% to 9% with effect from 1 January 2019 following recent EU developments in this area.
There is no increase in the excise rate for diesel, however, any new diesel engine passenger vehicles registered from 1 January 2019 will be subject to a 1% Vehicle Registration Tax.
3. Employment Tax
Key Employee Engagement Programme (KEEP)
Amendments were announced to the KEEP scheme which was introduced in 2018. The ceiling on the maximum annual market value of share options that may be granted by an SME will increase from 50% to 100% of the annual salary. The overall value of the share options also increased from €250,000 to €300,000. However, the three-year limit has now been replaced to a lifetime limit. The maximum value of options that can be granted in a year remains at €100,000.
Benefit in Kind (BIK)
The 0% BIK rate for employers providing electric cars or vans has been extended to 31 December 2021. A cap of €50,000 on the original market value (OMV) of the car or van that is exempt from BIK is applied from 1 January 2019 and any amount in excess of €50,000 is taxable in the normal manner.
Employer’s PRSI
Weekly income threshold for the higher rate of employer’s PRSI will increase from 1 January 2019 from €376 to €386. The rate of employer’s PRSI will also increase to 10.95%.
Hourly minimum wage
The hourly minimum wage will increase from 1 January 2019 to €9.80. This has been introduced following a recommendation from the Low Pay Commission.
4. Personal Tax
Income tax and Universal Social Charge (USC)
The Minister announced an increase in the income tax standard rate band of €750 for single and married individuals (one earner) and €1,500 for married individuals (dual earners). Therefore, the 20% tax band has been widened and it will mean that individuals will reach the higher rate of tax (40%) at €35,300. USC band for the 2% rate has increased by €502 to €19,874 and the 4.75% rate has reduced to 4.5%. These changes in USC will benefit all taxpayers.
Tax credits
The earned income credit has been increased by €200 to €1,350 in order to minimise the differential in taxes payable by self-employed individuals and employees under the PAYE system.
Capital Acquisitions Tax (CAT)
The tax-free Group A threshold for gifts or inheritances from a parent to child has increased by €10,000 to €320,000. This is expected to rise further in upcoming budgets.
At EisnerAmper Ireland, we design business & compliance solutions to make trade happen. This is what we do everyday.
EisnerAmper Ireland’s Tax Department provides support to the Firm’s Financial Services and International Business market groups. We advise corporates, their people and principals operating in the technology, life sciences, real estate, structured finance, aircraft leasing and investment funds industries. To find out more, visit our Tax Services page.
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Latest News →EisnerAmper Ireland attends Graduate Fairs across Ireland 2018
Throughout September and October 2018, EisnerAmper Ireland staff have been busy attending various graduate fairs across Ireland including:
- The UCD Business, Finance & Management Career Fair;
- CIT Graduate Fair;
- NUIG Career Fair;
- UL Career Fair;
- Maynooth Career Fair; and
- DCU Career Fair.
Laura Cowman, Kinga Houlding and Jennifer Higgins from EAI’s Human Resources team, as well as a number of interns and graduates from EAI’s Financial Services, International Business and Tax departments, attended the graduate fairs.
In addition to attending career fairs, EAI’s HR team also conducted mock interviews with Business, Accounting & Finance students in the National College of Ireland (NCI) in Dublin’s International Financial Services Centre (IFSC) as part of their ‘Getting into Accounting & Finance’ event.
Below is a selection of photographs from the events:
Jack Carey, Ketri Kivi and Dagan Morris at UCD’s Business, Finance & Management Career Fair, 2018.
Jennifer Higgins, Michéal Ó Cualáin and Ketri Kivi at NUI Galway
Employer-led mock-interviews as part of NCI’s ‘Getting into Accounting & Finance’ event. Photo courtesy of the National College of Ireland.
We care about business and we care about the people we work with in business.
Our trainees are involved in all elements of practice management from day one. From the outset, trainees work closely with partners and senior management to deliver services to our key markets. This approach facilitates our trainees getting hands-on experience while also developing the core awareness, knowledge, skills and confidence to succeed in their careers. To learn more about our trainee programme, click here.
Latest News →EisnerAmper Ireland hosts INED Forum II 2018 with Insurance Ireland
On Thursday 27 September 2018, EisnerAmper Ireland & Insurance Ireland hosted the second in a series of INED fora in the St. Stephen’s Green Hibernian Club, Dublin 2. The event focused on two topics concerning INEDs in the Insurance Industry: International Financial Reporting Standard (IFRS) 17 and the General Data Protection Regulation (GDPR).
Dave Montgomery, Partner, Head of Risk & Regulatory at EisnerAmper Ireland acted as the MC for the afternoon and the speakers included:
- Ray Kelly, Partner, Financial Services, EisnerAmper Ireland
- Dermot Corry, Principal, Milliman
- Stephen Gormley, Regulatory Compliance Manager, EisnerAmper Ireland
- Garrett O’Neill, Assistant Commissioner, Office of the Data Protection Commissioner
EisnerAmper Ireland & Insurance Ireland INED Forum II. From left to right: David Montgomery, EisnerAmper Ireland; Dermot Corry, Principal, Milliman; Ray Kelly, EisnerAmper Ireland; Brendan McCarthy, BMC Consulting; Stephen Gormley, Manager, EisnerAmper Ireland. Photo credit: Iain White Photography
EisnerAmper Ireland is delighted to be working with Insurance Ireland and their dedicated INED Council, supporting the delivery of their Annual INED Seminar in February and co-hosting a series of bespoke INED Fora throughout 2018. As the voice of insurance actively promoting the highest standards, Insurance Ireland represents 95% of the domestic market and more than 80% of Ireland’s international life insurance market. The Insurance Ireland INED Council promotes best practice for insurance industry INEDs in addition to acting as a sounding board for entities, organising appropriate training and acting as a networking hub.
At EisnerAmper, we design business & compliance solutions to make trade happen.
As Head of Risk & Regulatory at EisnerAmper Ireland, Dave Montgomery leads a team in the provision of regulatory, risk management, audit and advisory solutions to Insurers and Reinsurers operating in or through Ireland. As a former regulator with the Central Bank of Ireland, Dave supervised insurance and reinsurance firms and also worked on the development and implementation of the PRISMTM framework. If we can assist you or your business in any way, please contact Dave Montgomery.
Contact Dave Montgomery
The implementation of IFRS 17, Solvency II, GDPR and other developments across the regulatory landscape have led many (re)insurers to consider how they can best demonstrate the manner in which they satisfy their regulatory requirements in a cost-efficient and compliant manner. We provide specialist Insurance Regulatory Compliance Services to help you meet your regulatory compliance and corporate governance requirements. To read more about our specialist Insurance Regulatory Compliance Services, click here.
Guests at the INED Forum event in the St. Stephen’s Green Hibernian Club, Dublin 2
Minister for Finance and Public Expenditure and Reform appoints Diarmaid O’Keeffe to Credit Union Advisory Committee
On 25 September 2018, the Minister for Finance and Public Expenditure and Reform, Paschal Donohoe TD, announced the appointment of four new members to the Credit Union Advisory Committee (CUAC), including Diarmaid O’Keeffe, Partner and Head of Audit, EisnerAmper Ireland.
CUAC advises the Minister for Finance and Public Expenditure and Reform, Paschal Donohoe TD, in accordance with its mandate under Section 180 of the Credit Union Act 1997. CUAC was established in 1997 to advise the Minister for Finance regarding the improvement of the management of credit unions; the protection of the interests of members and creditors of credit unions; and other matters relating to credit unions upon which the Minister and the Central Bank may from time to time seek the advice of the Committee.
Speaking in relation to the appointments, Minister Donohoe stated; ‘These four new members ensure that the CUAC is well balanced in terms of diversity of experience and expertise which includes academia, business management and financial analysis, and will complement the existing members of the Committee who are Credit Union management. I wish the new Committee members well over the next three years and I am confident that they will make a valuable contribution to the CUAC’s work.’
The Committee members will hold office for three years from 1st September 2018 and will join two existing members who were appointed in December 2017. Others appointed to the panel included Lorraine Corcoran, Director, Afanite; Olive McCarthy, Senior Lecturer in University College Cork (UCC); and Seamus Newcombe, Chief Executive, Payac Services CLG.
To read the original press release from the Department of Finance, click here.
At EisnerAmper Ireland, we design business and compliance solutions to make trade happen.
We have advised over 200 credit unions, including working with and auditing some of the largest credit unions in the state, advising in relation to the largest merger transactions and providing training and consulting services to Senior Management including those responsible for the Head of Finance role. If you have any questions in regard to EisnerAmper Ireland’s services to the Credit Union sector, contact Diarmaid O’Keeffe.
Contact Diarmaid O'Keeffe
Latest News →EisnerAmper Supports Cancer Week Ireland
In support of Cancer Week Ireland, a number of EisnerAmper Ireland team members will be attending and contributing to various events this week. Cancer Week Ireland, an Irish Cancer Society and Trinity College Dublin initiative, will run from 24 September to 30 September. This national initiative aims to “get people talking about cancer and how we can prevent it, spot it, treat it, and survive and thrive afterwards” – learn more about Cancer Week Ireland here. To find and support an event near you, visit cancerweek.ie/events.
EisnerAmper Ireland is delighted to have raised over €4,500 so far this year in support of Irish Cancer Society through various activities such as our Coffee Morning. In addition, our team has raised over €4,600 for the Temple Street Foundation through initiatives such our Bake Sale, Bouncers for Temple Street and our Table Quiz Night.
At EisnerAmper Ireland, we design solutions to support our community.
Corporate Social Responsibility (CSR) is integral to how we do business and manage interactions, not just with our employees and clients but also our wider community and society as a whole. As a professional services firm, demonstrating ethical high performance in all aspects of our work and how we run our firm is fundamental to our success. Learn more about our CSR policy here and our CSR initiatives here.
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Latest News →EisnerAmper Ireland’s Ian Duncan completes 100km Charity Cycle Race
On Saturday 15 September 2018, Ian Duncan, Semi-Senior in EisnerAmper Ireland’s Financial Services Group, completed a 100km Charity Cycle Race in aid of Longford Hospice Homecare and the Irish Cancer Society. In support of these great causes, Ian cycled from Athlone to Roscommon, Lanesboro, Ballymahon and returned to Athlone. Ian, and members of his fundraising team, have successfully raised over €1,700 so far for Longford Hospice Homecare.
Longford Hospice Homecare provides appropriate physical, emotional and spiritual support to palliative care patients and their families enabling them to manage life-limiting illness and bereavement with fortitude and dignity.
To support this great initiative directly, donate via Ian’s GoFundMe page here.
The 100km Charity Cycle Race was organised by Pat McDonnell Paints in support of the Irish Cancer Society. For more information about Longford Hospice Homecare, funded in part by the Irish Cancer Society, visit County Longford Citizens Information Service website here.
At EisnerAmper Ireland, we design solutions to support our community.
Corporate Social Responsibility (CSR) is integral to how we do business and manage interactions, not just with our employees and clients but also our wider community and society as a whole. As a professional services firm, demonstrating ethical high performance in all aspects of our work and how we run our firm is fundamental to our success. Learn more about our CSR policy here.
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Latest News →EisnerAmper Ireland attends basis.point 6th Annual Corporate Challenge
EisnerAmper Ireland are proud supporters of basis.point, the Irish Fund Industry’s initiative to come together to help make a difference to those in need.
On Friday 7 September, Gavin Lee, Head of International Trade in EisnerAmper Ireland, attended the basis.point 6th Annual Corporate Challenge in Milltown Golf Club. The event was a great success and we were delighted to have the opportunity for members of our team to enjoy a pleasant afternoon and connect with our contacts.
We care about business and we care about the people we work with in business.
To find out more about basis.point or to donate, visit basispoint.ie.
At EisnerAmper Ireland we create business & compliance solutions for Asset Managers and Funds to make trade happen. If we can assist you or your business in this regard, please contact Gavin Lee.
Contact Gavin Lee
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