No Net Liability (NNL) Class S PRSI

My only income for the past few years has been dividends from US shares. I file a Form 11 each year, but never pay any income tax (the tax liability is less than my credit). In 2020 this income passed the Eur 5000 threshold so, although I still do not owe any income tax, it seems that I now have to pay a Eur 500 PRSI contribution. In the information about this tax I see "No Net Liability (NNL) cases: A person who has been told by an Inspector of Taxes that they need not make a tax return, who has self-employed income of €5,000 or more per year, is liable to pay a flat rate [Eur 300] self-employed PRSI contribution to this Department." Does anyone know anything about this? What are the conditions for being told that you do not need to make a tax return? Is it possible that I might quality for this?

To short-circuit the question, how old are you? If you are over 66 you have no PRSI liability.

Thank you for your reply. I am 35.

Given that you have a PRSI liability for 2020, it seems highly unlikely that any Inspector of Taxes would tell you that you are no longer required to make tax returns. Revenue aren't inclined to kill off the laying hens! However, if you sold your American shares then you might be in luck!

(An example of when this did happen, would be a relative of mine, a taxi driver, who, after he sold his taxi plate and informed revenue was told that he no longer had to make tax returns - but his sole income was the State OAP.)

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Thank you for your thoughts, Shirazman, however the section of the information page that I quoted seems to describe my situation: I have an income of over 5k (just), and no net income tax liability. It says that in this case I might qualify to directly send the department Eur 300 for the PRSI contribution rather than filing a tax return and paying Eur 500 for the PRSI contribution.

basilbrush said:

What are the conditions for being told that you do not need to make a tax return? Is it possible that I might quality for this?

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I had never heard of this but looked it up and it's the case.

Not sure what the conditions are. You can always write to Revenue and ask if you satisfy them.

Otherwise your €500 Class S flat rate payment a year will give you eligibility for a full state pension in due course which is incredible value. If I were you I would make sure I had income of at least €5,000 a year from now on

Indeed, and hopefully in time my income will be substantially more than Eur 5000, but for now it would be nice if I qualified for the lower rate.

I have sent a message to Revenue and will report back here when I hear from them.

They replied (impressively quickly) and said that I do need to file the tax return (and thus pay the higher PRSI contribution). They unfortunately did not say how one qualifies for the "No Net Liability case", or why I do not.

basilbrush said:

Thank you for your thoughts, Shirazman, however the section of the information page that I quoted seems to describe my situation: I have an income of over 5k (just), and no net income tax liability. It says that in this case I might qualify to directly send the department Eur 300 for the PRSI contribution rather than filing a tax return and paying Eur 500 for the PRSI contribution.

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Ah, but you have a fluctuating income that occasionally exceeds the PRSI threshold. And Revenue's primary role is to collect funds for the Exchequer - hence I cannot see any reason why they would exempt a 35 year old from having to file a tax return!

It's rather like asking a tick to stop sucking your blood because you have anemia!