COVID-19: Ireland income tax & immigration considerations

We are in unprecedented times and the Irish Government has introduced a number of significant measures and recommendations to limit the spread of coronavirus. Working from home introduces a number of employment tax and immigration impacts particularly if your employees are working from home in a country that is different to the usual country where they work.

The purpose of this document is to address some of the main areas of impact such as their Irish residence status and various other Irish income tax related matters.

Revenue have issued very welcome and helpful guidance which addresses employment tax and global mobility issues providing clarity to employers on these areas during this challenging time. The measures will apply for the duration of the COVID-19 pandemic. Records should be maintained by employers and employees outlining the circumstances of COVID-19 restrictions and should be available to Revenue on request. Your Deloitte team will be sure to keep you up to date with developments in a fast moving and challenging situation.

1) Executive Summary

  • An individual’s tax residence position may be impacted as a result of changes in work locations during the crisis which could result in unforeseen Irish or foreign payroll obligations. Revenue will consider the “force majeure” circumstances during COVID-19 period.
  • Many employees are now working from home temporarily. Employees can make a claim for additional costs incurred wholly, exclusively and necessarily in the performance of their employment duties while working from home.
  • Introduction of a COVID-19 temporary wage subsidy scheme for employers who continue to keep their employees on payroll during the current crisis. Further details are to be announced on this.
  • There are no BIK implications for costs paid by employer for an integral employee’s holiday cancellations or taxis provided for employees for health and safety reasons, subject to conditions.
  • For SMEs, Revenue has suspended the application of interest for late payment of tax in respect of February and March 2020 PAYE liabilities and January/February 2020 VAT liabilities.
  • Tax filing deadline extended for employees who received a real time tax credit through payroll for foreign tax paid on restricted stock units (RSUs) to the Pay and File deadline of12 November 2020.
  • The employer share schemes reporting deadline has been extended to 30 June 2020.
  • Revenue have issued guidance relating to a number of tax reliefs and exemptions applicable to globally mobile employees during COVID-19 period including an extension to SARP application period and relaxation of rules relating to business travellers, transborder relief and PAYE exclusion orders.
  • In cases where an individual is present in Ireland and that presence is shown to result from travel restrictions related to COVID–19, Revenue will be prepared to disregard such presence in Ireland for corporation tax purposes for a company.
  • PPSN appointments are likely to be delayed or postponed due to social distancing measures implemented by the Department.
  • Employment permits continue to be processed but a number of Irish embassies are closed which may impact on individuals who require a visa to enter the country.

2) Irish Tax Residency

An individual is treated as being resident in Ireland if, in the tax year from 1 January to 31 December an individual: 

  • Is physically present in Ireland for 183 days or more or;
  • Spends a combined total of 280 days or more in Ireland in both the current and preceding tax years, provided that they will not be treated as resident under this test for any tax year during which less than 30 days is spent in Ireland.

A day is counted if the individual is present in Ireland for any part of a day.

If an individual who normally works in Ireland is now working from home in another jurisdiction (or vice versa an individual who normally works outside of Ireland is working from Ireland) and is now unintentionally out of (or in) the country, this may impact their tax residence position. It may also impact on the company’s payroll obligations and we have highlighted this in section 9 below.

'Force majeure' circumstances

Revenue guidance provides for “force majeure” circumstances where an individual is prevented from leaving Ireland on his or her intended day of departure because of extraordinary natural occurrences (e.g. severe adverse weather conditions), or an exceptional third party failure or action (e.g. the breakdown of an aircraft). Under these rules, the individual will not be regarded as being present in Ireland for tax residence purposes for the day after the intended day of departure provided the individual is unavoidably present in the Ireland on that day due only to 'force majeure' circumstances.

Revenue have confirmed that they will consider “force majeure” circumstances for the purpose of establishing tax residence position for individuals who are not be able to return to their country of residence as planned. It is likely that Revenue will consider each individual on a case-by-case basis.

3) Home Working

As a result of COVID-19, a large number of employees are working from home.

Revenue historically had guidance which provided tax relief for “e-workers”. The relief is dependent on the employee being required to work from home regularly under formal arrangements with the employer. Generally, informal or ad hoc working from home is unlikely to qualify for any relief, as is working that is arranged on an exceptional or temporary basis.

Employers have provided employees with equipment to facilitate this such as laptop, printers, telephone, office furniture, etc. in order for employees to set up a working space at home during the COVID-19 period. Revenue have confirmed that a benefit-in-kind (BIK) will not arise where employers have provided such equipment. Revenue issued guidance which states that in situations where the Government recommends that employers allow employees to work from home to support national public health objectives, as in the case of COVID-19, the employer may pay the employee up to €3.20 per day to cover the additional costs of working from home. If the employer does not make this payment, the employee may be entitled to make a claim on their personal tax return in respect for expenses incurred wholly, exclusively and necessarily in the performance of the duties of the employment. Such expenses will need to be supported by receipts.

4) COVID-19 Wage Subsidy Scheme and Social Welfare Entitlement

The Government announced a COVID-19 temporary wage subsidy scheme for employers who continue to keep their employees on payroll during the current crisis. The scheme will be in place for 12 weeks from Thursday 26 March 2020. This scheme replaces the Employer Refund Scheme announced on 15 March 2020, and any business that received refunds under the current scheme do not need to reapply. The scheme applies to employers who top-up employees’ wages and those that are not able to do so.

Under the scheme, employers will be refunded 70% of an employee's wages up to €410 net per week (gross €38,000 per annum).

In order to qualify for the scheme:

  • The employer is required to make their best efforts to pay employees as close to 100% of their normal income as possible during the subsidised period; 
  • The employee must have been on the employer’s payroll on 29 February 2020 and for whom a payroll submission was made to Revenue between 1 February 2020 and 15 March 2020;
  • The employer must be experiencing significant negative economic disruption due to COVID-19 and be able to show, to the satisfaction of Revenue, at least a 25% decline in turnover has and demonstrate an inability to pay normal wages and normal outgoings fully;
  • Retain their employees on payroll.

Revenue have not provided details of how the above rules will apply. Legislation and further Revenue guidance material is due to be published shortly which will hopefully clarify the outstanding questions on this scheme.

The subsidy payment is exempt from employee PRSI and PAYE/USC withholding. Any top-up payment is subject to PAYE/USC withholding but is exempt from employee PRSI. Employers PRSI will not apply to the subsidy payment and a reduced rate of 0.5% will apply to the top-up payment. Employers wishing to avail of the scheme must apply to Revenue.

The reimbursement of the subsidy will be made within 2 working days after receipt of the payroll submission by the employer. Revenue have indicated that any income tax and USC refunds that arise as a result of the application of tax credits and rate bands can be repaid by the employer and Revenue will also refund this amount to the employer.

The Department of Employment Affairs and Social Protection (DEASP) has confirmed that employees who are laid off temporarily as a result of the COVID-19 crisis can apply for an emergency jobseeker’s payment. Any employees who have been diagnosed with COVID-19 or have been told to self-isolate by a doctor can apply for enhanced illness benefit payments. The applications can be made online at

5) Other Benefits in Kind

Holiday/flight cancellations for employees

Some employers have funded the cost of holiday/flight cancellations for employees or incurred costs assisting employees returning to Ireland including costs related to family members.

Revenue have confirmed that there are no BIK implications for such costs provided the employee is integral to the business and was required to return to deal with issues related to the COVID-19 crisis, the costs incurred are reasonable and the employee is not otherwise compensated (i.e. via an insurance policy or direct claim to the service provider). This exemption includes costs related to the employee’s family members.


The Revenue guidance also confirmed that there are no BIK implications where an employer pays for a taxi to transport an employee to or from work due to health and safety concerns for the duration of the COVID-19 period only. Taxis can be provided for employees under other circumstances, subject to a number of conditions.

6) Small and Medium Enterprises (SMEs)

To assist SMEs experiencing cash flow and trading difficulties, Revenue has suspended the application of interest for late payment of tax in respect of February and March 2020 PAYE liabilities and January/February 2020 VAT liabilities. Importantly, taxpayers should continue to file tax returns on time. 

A SME is a business with turnover of less than €3m which is not dealt with by Revenue’s Large Cases Division. Taxpayers, other than SMEs, which are experiencing temporary cash-flow or trading difficulties should contact the Collector-General’s office. Alternatively, such businesses can engage directly with their branch contacts in Revenue.

7) Income Tax Returns

Individuals can continue to file their 2019 tax returns and any liability due does not need to be paid until 12 November 2020. Individuals who are due a refund can file their return to claim the refund now.

Under Revenue guidance, an employer who facilitated a real time tax credit through payroll for foreign tax paid on restricted stock units (RSUs) during 2019 must report the details to Revenue and the relevant employee must file their income tax return by 31 March 2020. Revenue have confirmed that due to the current unprecedented circumstances, the 31 March 2020 deadline for filing the income tax returns will be extended to the extended Pay and File filing deadline (12 November 2020). The employer notification should be submitted as soon as possible but no later than 12 November 2020.

8) Share schemes filing obligations

The filing deadline for all 2019 share scheme returns is being extended from 31 March 2020 to 30 June 2020.

9) Global Mobility Reliefs & Exemptions

Employers with globally mobile employees will need to be mindful of the impact that changes in working locations brought about by COVID-19 may have on certain reliefs and exemptions from Irish taxes:

a) Special Assignee Relief Programme

SARP is a relief from income tax aimed at attracting skilled individuals from abroad to take up positions in Ireland with their employer (or an associated employer). The relief operates by allowing a 30% deduction from employment income in excess of €75,000, subject to meeting certain qualifying conditions.

As a result of COVID-19 many employers have introduced flexible working arrangements including allowing employees to return to their home country to work remotely to be nearer to family during the crisis. Other employees may have found themselves unable to return to Ireland after a temporary business trip or holiday overseas due to travel restrictions beyond their control.

The impact of these unforeseen changes in work locations is that individuals may no longer be in a position to meet some of the conditions for the relief whereby:

  • The individual claiming the relief must be tax resident in Ireland in the year of claim 
  • The individual must work in Ireland for a minimum of 12 consecutive months from the date of first arrival in Ireland

Revenue clarified that they will consider force majeure circumstances when determining an individual’s tax residency (see section 2 above). It remains to be confirmed by Revenue that these days may be treated as days of presencefor the purposes of meeting the SARP conditions in light of the extenuating circumstances.

In order to claim SARP relief an employer Certification of Eligibility (SARP 1A) must be submitted within 90 days from the date of arrival in Ireland. Irish Revenue have adopted a hard-line approach to this deadline in recent times and where this deadline has been missed, the relief has been denied. 

Understandably, the focus of HR/Finance personnel who typically administer these applications on behalf of employees may lie elsewhere due to the operational challenges faced by most employers at this extraordinary time. As the relief applies for a five-year period, a missed application can have a considerable personal financial impact for the employee. Where employees are assigned to Ireland under tax-equalised arrangements, a denial of SARP significantly increases the cost of relocating employees to Ireland, contrary to the fundamental objective of the relief.

Revenue have agreed to extend the application process by a further 60 days allowing 150 days from the employee’s date of arrival in Ireland to submit the SARP 1A. Revenue have indicated that they will extend deadline for SARP application to more than 150 days in exceptional circumstances which will be considered on a case-by-case basis.

b) Temporary Assignees/Business Travellers

Irish payroll obligations can arise where an individual carries on the duties of a foreign employment in Ireland. This can apply not only to individuals on formal assignment to an Irish entity but also to short-term business visitors and commuters. If the foreign employer does not fulfil its Irish payroll obligations, a secondary liability falls on the Irish entity for which the individual is working.

Where an individual spends more than 60 workdays but less than 183 days in Ireland and certain treaty conditions are met, an application can be made for an exemption from Irish payroll withholding. This application must be made within 30 days of the date that the individual takes up duties in Ireland.

Certain foreign employees may spend longer than originally anticipated working in Ireland a result of travel restrictions, or because the Irish business requires their expertise and experience to help them navigate these uncertain times. Revenue guidance states that an employer will not be penalised for failure to give timely notice where it was not expected or readily apparent that the individual will be present in Ireland for more than 60 workdays. However even making an application within 30 days of becoming aware of the breach of the 60 workday threshold may not be feasible for foreign employers (or the local Irish entity where relevant) where urgent operational matters must take precedence to ensure business continuity.

Revenue have confirmed that they will not strictly enforce the 30 day notification requirement given the unprecedented consequences of COVID-19. 

In some cases, the employer may never have intended that an individual would carry out their foreign employment duties in Ireland, for example, where the foreign employer has facilitated remote working to allow the individual to return to Ireland to be near family during the COVID-19 crisis.

Revenue have advised that they will not seek to enforce Irish payroll obligations for foreign employers in genuine cases where an employee was working abroad for a foreign entity prior to COVID-19 but relocates temporarily to Ireland during the COVID-19 period and performs duties for his or her foreign employer while in Ireland.

Employers will also need to be mindful of foreign payroll obligations that may arise if Irish employees are restricted from returning from an overseas business trip/assignment or if they request to work remotely in an overseas location due to family commitments.

c) PAYE Exclusion Orders

Where an Irish employee is sent on assignment abroad and becomes non-resident of Ireland the employer can apply for a PAYE exclusion order so that Irish PAYE and USC is not required to be withheld from the individual’s employment income for the duration of the assignment. The PAYE exclusion order remains valid for the period of non-residence as long as the individual has up to 30 incidental workdays in Ireland in a tax year.

This 30-work-day limit could be breached where an employee wishes to work from home for family reasons due to COVID-19 or if they are unable to return to the foreign location due to international travel restrictions. In certain cases, employers will seek to repatriate overseas employees for the duration of the pandemic due to concerns about the healthcare system in the jurisdiction in question.

The Revenue guidance confirms that an employee who currently has an exclusion order and may be required to work in Ireland for more than 30 days due to COVID-19 will not be adversely impacted.

d) Transborder Relief

Transborder Relief is an important tax relief for Irish individuals who commute daily or weekly to employments typically in Northern Ireland/UK or mainland Europe. Irish resident and domiciled individuals are liable to Irish tax on worldwide income however where Transborder Relief applies no Irish tax will be due and the individual will only pay tax in the country in which they are working on the income from that employment.

One of the conditions for the relief is that an individual can only have incidental Irish workdays in a tax year (i.e. up to 30 workdays).

Revenue have advised that if an employee is required to work from home in Ireland due to COVID-19, any days spent working at home in Ireland will not preclude an individual from being entitled to claim this relief, provided all other conditions of the relief are met.

10) Social Security

Employees who require a PPS number are required to attend a DEASP office to make the application. Due to social distancing restrictions in DEASP’s offices, there are delays for PPS number appointments.

Employees on assignment outside Ireland may have certificates of coverage or A1 certificates in place to ensure that they remain within the Irish social security system for the duration of the assignment. Some of these employees may have temporarily repatriated to Ireland during the COVID-19 pandemic. In addition, employees may be now working in other locations as they are unable to return home which may trigger social security issues. We await DEASP guidance on these situations.

11) Corporation Tax – Permanent Establishment

The Revenue guidance outlines that in cases where an individual is present in Ireland and that presence is shown to result from travel restrictions related to COVID–19, Revenue will be prepared to disregard such presence in Ireland for corporation tax purposes for a company in relation to which the individual is an employee, director, service provider or agent.

In addition, and where relevant, if an individual is present in another jurisdiction as a result of COVID-related travel restrictions, and would otherwise have been present Ireland, Revenue will be prepared to disregard such presence outside of Ireland for corporation tax purposes for a company in relation to which the individual is an employee, director, service provider or agent.

The individual and the company should maintain a record of the facts and circumstances of the bona fide relevant presence in or outside Ireland, for production to Revenue if evidence that such presence resulted from COVID-related travel restrictions is requested.

12) Immigration

The Department of Business, Enterprise and Innovation is still processing employment permit applications. It is expediting employment permits for medical staff currently and we expect a delay in processing of permits. For visa required nationals, a number of Irish embassies are closed during the COVID-19 crisis and this may impact the ability of new hires to apply for entry visas to enter Ireland once their employment permit has issued.

For renewal work permission applications, once the extension application has been submitted, they are permitted to remain in Ireland as well as continuing their activities. Deloitte is seeking written confirmation of this on their website. Once the new employment permission is processed, employees will need to attend an appointment to renew their residency permission.

For residence permission (both initial and renewal), currently the Irish Naturalisation Immigration Service at Burgh Quay, Dublin is operating as normal by way of appointment. They are practicing social distancing in their office. For Registration offices outside of Dublin: we recommend reaching out prior to attending appointments. Athlone, Limerick, Waterford, Dundalk, Letterkenny are open by way of appointment.

There are currently no entry bans preventing employees from entering Ireland. As of the 25th of March 2020, however, the Irish government has announced that anyone coming into Ireland (except from Northern Ireland) will be required to restrict their movements or self-isolate on arrival for 14 days to mitigate the spread of COVID-19. This applies to all nationals. Once the employee holds an employment permit, entry visa (for visa required nationals) and/or an Irish Residence Permit, they can still enter Ireland. It is the discretion of the immigration officer to allow for entry. The requirement to restrict movements or self-isolate could impact their ability to start work.

For employees working from home, there may be immigration impacts if they are a non-EEA national holding an employment permit. Likewise, if an employee decides to work from home outside of Ireland, there will be an immigration and tax impact. Please contact your usual Deloitte contact with any further queries or to carry out an assessment. 

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