Resident in Ireland for 155 days - income tax implications?

I have a query regarding residency and completing the From 11E Self Employed Tax Return. I have phoned the Revenue but I am not convinced by their replies.

My wife and I moved to Ireland from the UK last summer to be closer to her family (she is Irish).

• We both set up ourselves up as self-employed - however the economic situation meant we struggled to get work so we had to move back to the UK.
• We were resident in Ireland for 155 days only (29th July 2008 to 31st December 2008).

Having returned to the UK we completed a UK tax return in the normal way (for the UK tax year April 2008 to March 2009) - we declared all the Irish income and expenditure on this and were taxed on the total of our UK & Irish income. As far as the UK were concerned we were taxed as UK self employed with some Irish earnings. (which as we already did some business in Ireland in the years prior to moving over was not unusual).

I had assumed that as we were resident for only 155 days we would not be liable for Irish income tax and would not need to complete an Irish tax return.

However the Irish Revenue wants us to complete a return and ALSO pay tax on the (small) income we earned during our 155 days in Ireland. They will then give us a tax credit to present to the UK revenue thus avoiding any double taxation.

I think the double taxation agreement means our net financial position will be the same but:

• I just don't understand why we should be taxed in Ireland when we were resident for less than the 183 days. Am I missing something here?
• I would also like to avoid the extra leg-work and time involved in completing an Irish tax return

Anyone have any experience or advice on this slightly unusual situation?

thanks in advance for any help

As non-residents, you are taxable on Irish sourced income - and as you were self-employed while in Ireland this income is taxable in Ireland.

You therefore need to file a Form 11 inclusing all of your Irish sourced income, and pay the relevant tax. You will only be entitled to Irish tax credits based on the percentage of your Irish income over your total worldwide income for the year, as non-residents.

The UK will then give you a credit for Irish tax paid.

This is not such an unusual situation with all the global mobility nowadays, and I'm coming across these types of issues regularly.

If you need help with this let me know.

www.taxingtimes.ie

Domo

Thanks very much for taking the trouble to reply - much appreciated.

What are the implications for us now we are resident in the UK and doing some occasional work for Irish clients?

- do we have anything to file with the Irish revenue?
- do we have any liabilities for Irish income tax?

thanks

As long as you are in the UK and doing the work there - it is UK sourced income.
But it really depends on what you are doing.
Are you providing services or goods, as you may have VAT issues.

Domo - thanks again for your input

Domo said:

As long as you are in the UK and doing the work there - it is UK sourced income.
But it really depends on what you are doing.
Are you providing services or goods, as you may have VAT issues.

Click to expand...

We provide consultancy services and executive coaching:

• Some of the work requires face to face meetings on Irish soil
• But the work is also carried out in the UK
  • with reports etc written in the UK and e-mailed to Ireland
  • also coaching and advice provided over the telephone from UK to Ireland

Does it matter where you carry out the work?
Or is it the fact that an Irish company pays for the work which makes you laible for Irish Income Tax?

Regarding Irish VAT:

• we don't appear to fit any of the criteria for VAT registration in section 2.2 of the Revenue guidelines on their web-site [broken link removed]
• We are also below the annual threshold amount

Is there anything else we should be considering

This is a bit complex.

Regarding the supply of services from the UK - that would probably fall under distance selling, and then you have the relevant limit for VAT registration in Ireland if you hit that limit (€35,000).

Regarding the actual work you do here - what is this?

I would need more information and need to research the position to confirm the position, so can't offer any further advice here.

Email me if you need any further advice.