Non Resident Irish Tax Return

M

Me Fein

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I have to submit an income tax return for a US citizen who comes here every summer and has self employed income for 3 months.

She is US resident and makes tax returns in US.

When filling in Form 11 here am I right in thinking that US income is not included anywhere on form 11, also that she is not entitled to any tax credits in this country.
 
Have you considered the Treaty ? Back to Basics - where is she tax-resident under the Treaty ?
 
Cutting through this for you. Based on extremely limited information you've provided; the person is not likely to be Irish tax-resident.

Unlikely to get credits as a result - I would have to check legislation for this however.

Will be taxable in full by the IRS on the Irish income but would achieve relief by exemption or credit - would have to check the Treaty to be certain of which.

(Are you sure you should be doing a Tax Return for this person?)
 
She is US resident, born there and live there apart from few months of summer spent here.

Irish income is approx 5000 per year. Withholding tax has been deducted at 20%.

US tax returns submitted every year but I don't think she included irish income on them.
 
Talking in very general terms here as I don't have full info.
Likely the WHT will satisfy her Irish liability in respect of income tax. Am not up on my rules re PRSI / USC for non-EU residents so cannot comment here.

The Irish income and tax should be declared to the IRS.
 
You will need to engage a US tax accountant.

I wouldn't attempt another country's (or even this country's) tax return without expertise in that area.
 
They have an accountant in US who submitted their US details but as far as I am aware they did not included Irish details on US Return. I will just submit form 11 here with Irish details and get their accountant at home to look after rest. Do you think this would be ok.
Thanks
 
Ok, just checking.

And here is where my expertise fails me. I think the American system runs April-April (similar to us years ago & UK today) but I'm unsure when their filing season is, or when they have to make prepayments (our preliminary tax).

My guess - and only a guess - is that the IRS wouldn't allow relief for Irish PSWT as its not a final-WHT and that they would only grant relief against actual income tax paid, which can only be proved when your client submits their Irish income tax return and the PSWT is set against the Irish liability.

So this would mean your client requires a 2013 Notice of Assessment to prove - do they have self-assessment in the States? - Irish tax paid. Summer 2013 earnings and 2013 PSwT = nil Irish 2013 liability but your client might need the NofA to prove this to the IRS for her 2013/2014 return which might be filed sometime later this year.

***Please note this paragraph is all guesswork and could be wide-of-the-mark and proper advice/research is required***
 
I presume it Professional Services Withholding Tax. Are they resident in Ireland for tax purposes?
 
Hi Joe. Yes, PSWT.

I assume US-resident as they are only here for a few months in the Summer (Summers being less than 183 days). I note reference to US Citizen - and am also assuming therefrom US-tax-residency - citizenry being the nexus for US residency status for individuals.

Happy to hear your thoughts ...
 
Don't know but on the basis that non resident American citizens have to file a US tax return I would imagine your friend should include their Irish income as they are taxable on worldwide income.

I don't think an Irish tax return would be required so http://www.revenue.ie/en/tax/it/forms/ic11.pdf
Would do but I imagine they will tell the IRS the amount of the income.
 
(Hmmmm ... again thinking out loud here .... quite prepared to be wrong esp in light of an actual Revenue form in existence!)

Would the fact that it is a Case II income change your views; in that it (Case II) is treated similarly to a trade and an Irish tax return therefore required. (That will charge to tax, the income earned but will set the PSWT against the liability arising - ie same net effect)

I do know, as you rightly point out, that the Irish income will be reflected entirely in the US Return but the income tax paid will also be treated as a credit. If the US rate of tax is higher than the Irish rate, ultimately she effectively only pays tax at the prevailing US rate.
 
Thanks joe, but if she is liable to irish income tax on irish income @ 20 per cent, the wht just covers this, so I don't think they would get wht back here would they not just get relief for it on us return, irish income is 10000, wht 2000
 
Art.14 of the US/Ireland treaty;
Article 14

Independent Personal Services
Income derived by a resident of a Contracting State in respect of professional services or other activities of an independent character shall be taxable only in that State, unless he has a fixed base regularly available to him in the other Contracting State for the purpose of performing his activities. If he has such a fixed base, the income may be taxed in the other State but only so much of it as is attributable to that fixed base.
The term "professional services" includes especially independent scientific, literary, artistic, educational or teaching activities as well as the independent activities of physicians, lawyers, engineers, architects, dentists and accountants.
 
I think the above could demonstrate she is taxable in Ireland.

What are the exact nature of the services provided, does she have the use of a 'fixed base' eg office/rental property ?
 
Article 24

Relief From Double Taxation
In accordance with the provisions and subject to the limitations of the law of the United States (as it may be amended from time to time without changing the general principle hereof), the United States shall allow to a resident or citizen of the United States as a credit against the United States tax on income:
the Irish tax paid by or on behalf of such citizen or resident; and
 
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