My question is as follows: I work for an Irish sofware company and am recieving a £5000 pound bonus and if any one know Irish taxes they take almost 50%. I was trying to find out if my company was to apply the bonus to my rent( ie. since I moved from America to Dublin,Ireland a clause could be added to my contract to state the the company would pay my first 8 months of rent and the lease could act as the reciept. Is this legit and whats costs for the company/me are there?
I’ll find out for you in the next day or two. I am assuming you are an American citizen working in Ireland on a reasonably permanent, full-time basis… and you’ve been in (or will be in) Ireland for more than 180 days the tax year.
You said that you are working at the Irish parent company, and not the European HQ of an American company that happens to be located in Ireland?
Note that I can only find out IN GENERAL what the tax treatment of company-paid housing is. An individual may have special circumstances that could cause variation from a general statement. Lots of tax rules have exceptions or special conditions, and yours is not necessarily just a case of Irish tax law, but of the tax treaty between the U.S. and Ireland, as well.
You assume correct I am American and have been here for over 1 year and will be here for at least 1 more year. The company is Irish based/headquartered with offices in the States. I pay Irish taxes just like any Irish citizen here. My boss said he was leaving the research to me before he would agree to this plan. I appreciated your help and if you find yourself on this side of the lake the Guinness is on me. Mark
P.S. If you are aware of any other resources I could reference I would be most grateful.
Sorry, probably should have used this first, I accidently snet it to your email.
Did this company transfer you over to Ireland, or were you there anyway?
Normal practice would be for the company to pay the fees for a tax provider or tax preparer. Your taxes are massively more complicated, because (as an American citizen) you will still need to file U.S. tax forms, while (as an Irish resident) you will also need to file Irish tax forms. The tax treaty between the two countries will pretty much ensure that you don’t have to PAY twice, but you will have to FILE twice.
Consequently, almost all firms that transfer employees will pay the costs of a professional tax preparer who is used to dealing with such issues. Those fees are, themselves, taxable income to you, so almost all firms would gross them up so that you have enough after taxes to pay the tax advisor’s fees. It’s protection for you, and protection for the company – small cost compared to you doing this stuff on your own, and stumbling over some tax issue, and then having the company accused of “conspiring” to help you “evade” taxes.
Stong word, I like creative accountancy… I moved here then got the job. The plan was to add to the my contract now that the company would reimburse me for the first 8 months of my rent which would be £5000. Could it be a moving expense or something else creative that would be considered tax-free?
Well, I learned enough to know that you should seek professional advice. Ask your company to pay the fees for such.
The first hit is that you will be viewed as resident, but you may be able to be classed as “not domiciled” or “not ordinarily resident.” That is, your “real” home is in the U.S. In that case, you will be taxed only on your Irish sourced income – that is, savings accounts etc in the U.S. would not be subject to Irish tax if you didn’t have any amounts remitted (taken out of the U.S. account and spent in Ireland.)
Generally speaking, almost any advantage provided to you by your employer is taxable in Ireland. This can include moving expenses, except in certain conditions (if you were moved by the company.) That doesn’t sound applicable to you.
The company paying your rent is complex, but probably does not provide any tax advantage. It is possible that your rent payments are deductible against your income; lots of technical ducks that would need to be in the line to make that happen. It is also likely that any rent paid directly by the company would be considered taxable income to you. So you may, in fact, be better off tax-wise paying the rent yourself than having the company pay it for you (assuming that your gross pay remains the same.)
All this is leading me to say that it’s complicated, and does not lend itself to an easy answer. You’ll need to see a professional tax preparing, and my suggestion would be one of the big global accounting firms. “Sean’s Tax Preparation and Donut Shop” very likely won’t be well enough versed in the US/Irish tax treaty to be of major help. Sorry I couldn’t find out more… I may get some additional info in the next day or two from our office in Ireland, but I think it’s unlikely.