A guide to how Irish tax works for foreign nationals moving to Ireland and for Irish nationals leaving Ireland. This article covers residency, domicile, income tax, USC, PRSI, foreign income, investments, capital gains and inheritance considerations, together with practical steps before and after a move.
Moving to or from Ireland brings a number of tax considerations that often differ significantly from those in your home country. While Ireland’s tax system appears relatively straightforward on the surface, the combination of residency rules, domicile, worldwide income exposure and varying treatments of foreign assets means that even small misunderstandings can have long term consequences.
This guide provides a clear overview of how Irish tax works for people relocating to Ireland, as well as Irish nationals and residents planning to move abroad. It is designed to give you a solid foundation before seeking personalised advice based on your circumstances.
This article provides general information about the Irish tax system. It is not tax advice and should not be relied upon to make decisions. Tax treatment depends on your specific circumstances and local advice is essential.
If you would like to speak to a trusted Irish tax specialist, we can introduce you to an experienced professional. Request an introduction and we will connect you with the most suitable expert: Request Irish tax introduction >
Irish tax residency is determined mainly by the number of days you spend in Ireland during a calendar year. The thresholds are:
If you become resident, Ireland may tax you on your worldwide income. This typically applies when you are both resident and domiciled in Ireland. If you are resident but not domiciled, Ireland may only tax your foreign income and gains if those funds are brought into Ireland.
People who move part way through a year may be eligible for split year treatment for employment income, depending on their circumstances. Dual residency with another country can arise and double taxation agreements often determine where specific types of income are taxable.
Domicile is a deeper, longer lasting concept than residence.
It refers to the country that you consider your permanent home. For most individuals, domicile of origin is inherited at birth and only changes if you establish a clear and permanent intention to live in another country indefinitely.
Domicile matters in Ireland because:
Income Tax in Ireland is charged at standard and higher rates. Rather than a personal allowance, Ireland operates a system of tax credits which reduce the final tax bill. Most employees qualify for the personal tax credit and either the PAYE credit or earned income credit.
Universal Social Charge (USC) is applied to gross income. It is separate from Income Tax and uses its own set of income bands.
PRSI is payable on most employment and self-employed income. It secures access to certain Irish social welfare benefits. Self-employed individuals usually fall under Class S contributions.
Where you work for a foreign employer or hold foreign directorships, the Irish treatment can vary. In many cases, your residence and where your duties are performed affect whether Irish tax applies.
People who own property in Ireland, whether resident or non-resident, are subject to specific tax obligations on rental income and property ownership.
Rental income from Irish property is always taxable in Ireland. It is assessed after allowable deductions, which can include mortgage interest (subject to current rules), repairs and maintenance, management fees, insurance, letting agent fees and certain other property related costs.
Non-resident landlords must appoint either an Irish collection agent or have tax withheld by the tenant. Even where tax is withheld, a self-assessment return is normally required to ensure the correct amount of tax is calculated.
Rental income is liable to Income Tax, Universal Social Charge and PRSI, depending on the landlord’s circumstances.
Most residential properties in Ireland are subject to Local Property Tax.
This is charged annually based on the self-assessed market value of the property. Landlords must ensure the property is correctly valued and that payments are kept up to date.
If you sell an Irish property that has been rented out, the gain will usually be liable to Irish Capital Gains Tax. This applies whether you live in Ireland or abroad. The rate is generally 33 per cent. The timing of a sale relative to changes in residence or domicile can affect exposure in other countries, so professional guidance is often advisable before disposing of a property.
Stamp Duty is payable when purchasing property in Ireland. Landlords acquiring additional properties should consider the impact on their overall investment planning, particularly if purchasing through a company or other structure.
If you are self-employed or operate as an independent contractor, you must register for self-assessment and file an annual tax return. You will normally declare worldwide trading profits if resident and domiciled, or Irish source profits and remitted foreign profits if resident but not domiciled.
Allowable business expenses can be claimed, provided they are wholly and exclusively for the purposes of the trade. PRSI and USC also apply.
Once resident, you may need to declare foreign income such as salary, dividends, interest, rental income or pension payments. The treatment depends on residence, domicile and whether any foreign income is remitted to Ireland.
Double taxation agreements may reduce or eliminate tax in one jurisdiction, but you must still declare the income in Ireland where required.
Many foreign investment products, such as collective investment schemes or offshore funds, can have different or less favourable tax treatment in Ireland than in their country of origin. Similarly, tax efficient structures in your home country may lose their tax advantages once you become Irish resident.
Pension contributions to Irish schemes, and in some circumstances to qualifying overseas schemes, may attract tax relief.
Capital Gains Tax is charged on gains from the disposal of assets, including property, shares and certain foreign investments. Irish residents who are domiciled in Ireland are typically liable on worldwide gains. Residents who are not domiciled may only be liable on foreign gains if they remit the proceeds to Ireland.
The timing of a move can significantly affect the taxation of gains, so reviewing your position before disposing of assets is essential.
Ireland charges Capital Acquisitions Tax on gifts and inheritances received above certain thresholds, generally at 33 per cent. Residence, ordinary residence, domicile and the location of the asset all influence whether Irish tax applies.
For people arriving in Ireland, exposure to Irish inheritance tax can arise sooner than expected, depending on residency and domicile. For Irish nationals leaving Ireland, domicile remains relevant even after departure.
Cross border estate planning should be reviewed whenever you relocate.
Irish tax residency is based on the number of days you spend in Ireland during a calendar year. You are resident if you spend 183 days or more in a year or 280 days across two years with at least 30 days in each.
If you are resident and domiciled, worldwide income and gains are normally taxable. Residents who are not domiciled may only be taxed on foreign income and gains if they remit them to Ireland.
Employees typically pay Income Tax, Universal Social Charge and Pay Related Social Insurance. Tax credits reduce Income Tax but do not affect USC or PRSI.
If you leave Ireland and become non resident, you are usually liable only for Irish source income. However, domicile and double taxation rules can affect liabilities for gifts, inheritances and certain foreign income.
Foreign pensions may be taxable in Ireland depending on the terms of the relevant double taxation agreement and your residence and domicile position.
International mobility often results in tax exposure in more than one country. The combination of Irish residency tests, domicile, source rules and foreign income reporting means that individual outcomes vary significantly.
Obtaining personalised advice before or shortly after a move can help avoid double taxation, unexpected liabilities and the loss of tax advantages that existed in your previous country of residence.
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