Earning Salary Abroad living in Ireland

Hi,
I am currently a temporary resident in Canada and i have been working here since November, i have recently decided to move home to Ireland and my company have asked me if i would like to continue to work for them remotely from Ireland. This is probably going to be a temporary solution maybe 3-6 months until they find a suitable replacement for me or until i find work in Ireland.

I will be paid in Canadian dollars and paying Canadian tax while working remotely from Ireland...

Would I need to declare this income in Ireland and would I have to pay additional tax in Ireland?

Thanks in Advance for your help.

Hi Sask,


If you left Ireland in November 2009 and will return in June/July 2010 then you will not have broken Irish tax residency and will be considered Irish tax resident throughout the period. More info would be required to determine your exact position, but it is possible that you will have remained taxable in Ireland on your worlwide income i.e. including the Canadian income. A Double Taxation Agreement is in place between Ireland and Canada, so tax credits would be available for foreign tax to avoid double taxation. The income you earn post return to Ireland will be taxable in Ireland. It may be possible to cease Canadian withholding tax on the income earned after your return to Ireland. Some more points for you and your employer to consider:

• Your Canadian employer may be required to register for and pay over Irish PAYE on the income you receive from them after your return to Ireland
• Depending on how long you remain an employee of the Canadian company following your return to Ireland and the duties you are carrying out here, the company could potentially be brought within the Irish corporation tax charge. There could also be VAT issues to consider. This is unlikely if you are only kept on for 3 to 6 months following your return and you do not conclude contracts on their behalf but it is something for you and the company to watch.

If you were providing services to the company as a self employed contractor then these PAYE, corporation tax and VAT issues would not arise for the company. However, you would need to be genuinely self employed.

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Thanks for the information Breninio, I probably should have mentioned that I left Ireland in March 2008 and I have not worked or lived there since. Will this effect the tax I would have to pay when I return?

Hi, if you left Ireland in March 2008 and have been out of the country since then, then you will have broken Irish residency. As a result, the employment income earned since your departure should not be taxable in Ireland. However the employment income you will receive following your return to Ireland will be taxable here and the issue outlined in my previous e-mail will apply.

www.phoenixtaxservices.ie

There is a taxation agreement between Ireland and Canada. Either's Revenue Commissions should be able to tell you how it is applied and give some practical advice.