Ireland's Revenue Commissioners – also referred to simply as Revenue – issued a brief announcing concessionary treatment for tax year 2022, exempting income from Irish income tax and Universal Social Charge (USC) if earned by Ukrainians located in Ireland because of the war in Ukraine, so long as they continue to be employed by their Ukrainian employer while performing the duties of their employment remotely from Ireland [Ireland Revenue eBrief No. 090/22, 14 April 2022].
In the brief, Revenue makes it clear that such income earned for employment performed within Ireland is chargeable in Ireland to income tax and the USC, and is within the scope of the Pay As You Earn (PAYE) system of deduction of income tax that requires employers to withhold the tax from income earned.
However, by way of concession, Revenue will treat Irish-based employees of Ukrainian employers as not being liable to Irish income tax and USC on Ukrainian employment income that is attributable to the performance of duties in Ireland. Their Ukrainian employers also will not be required to operate the PAYE system on such employment income.
The concessionary treatment will apply for tax year 2022 if: (1) the employee would have performed his or her duties of employment in Ukraine but for the war there; (2) the employee continues to be employed by his or her Ukrainian employer while performing the duties of their employment remotely from Ireland; and (3) the employee remains subject to Ukrainian income tax on the employment income for the year.
Ukrainian employers and employees availing themselves of the concessionary treatment should keep any documents or other evidence – such as a record with the individual's date of arrival in Ireland – showing that it was due to the war in Ukraine that the individual came to Ireland and performed their work or duties there. Revenue may request copies of those documents.
Mavanee Anderson, Esq., is Editor of Payroll Information Resources for the APA.