Tax credits withdrawn for Non EEA National

S

Shadowsilk

Registered User
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Hi all,

Can someone please help with this query. Apologies for the long story but I want to try to be as detailed

I am a Non EEA national and recently move to Ireland to take up employment about 3 months ago. I have an issue quite worrying for me regarding tax credits. My HR partner gave me the tax credit form but didn't provide much guidance however and stated I'm married and my spouse still resides in my home country though she works there I didn't state her income on the form as I wasn't sure if it mattered.

I was issued a week 1 basis Tax credit certificate on single person however I later updated my details with Revenue providing my wife details and her income in my home country (equivalent of 20,000 euros Gross) (which I thought was the right thing). My gross income here is 45,000 Euros.

I later got a response back from Revenue below and I just don't understand the implication as regards my net pay. I'm beginning to feel like I should have not provided these details. I am yet to receive the amended TC but it sends shivers down my spine like I will be heavily taxed.

Can some help with an explanation and implication of the withdrawal?
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Response from revenue

On checking your recent application I now see that you are from a non Member State of the EU and you would therefore not be entitled to any credits - see information below:

Non-Resident Individual Entitlement to Tax Credits

EU Citizen, National:

Full tax credits are granted on a Cumulative Basis if 75% of the worldwide income is taxable in Ireland. Week 1 Basis certificate is issued if income taxable is less than 75%.

Citizen of Double Taxation Country:

Full tax credits are allowable on a Cumulative Basis where the person's only source of income is Irish source income. Where the person has non - Irish source in addition to the Irish income, a Week 1 Basis certificate is issued.

Other:

In all other cases a certificate of nil tax credits is issued.

I have withdrawn your credits, on a week 1 basis, and issued an amended certificate to your employer.
 
Last edited:
Shadowsilk said:
Initially 3 months ending November. Possibly for 2 years or more from next year January.

Thanks
Click to expand...


Strictly, you are non-resident for 2015.

If you are sure that you would be resident in 2016 and 2017, then you can elect to be treated as Irish resident for 2015.

See here and scroll to Tests of residence and then to Option to elect to be tax resident in the State for a tax year.

You would, however, need to provide convincing proof to Revenue that you will be resident for 2016 and 2017.
 
Hi Sophrosyne. Just a quick question please. Does it mean it's not because of my spouse income it's being withdrawn. I really dont understand now. I have my tax credit certificate apart from TC being withdrawn, it states that my rate band is decreased by allocation to other income. Now I don't have any income taxable at 20%. All income is taxable at 40%.

Please is there any reason why rate band is affected. USC is also chargeable at 8%. That's like half of my gross gone to tax. I feel so doomed. Is there anything I need to do please
 
Hi Shadowsilk

There are a number of issues.

  1. Residence Position. Since you will not be present in Ireland for 183 days you are non-resident for this year. You appear to be from a country, which is outside the EEA and with which Ireland does not have a double taxation treaty, and so you are not entitled to any credits.

    You can elect to be treated as Irish resident for 2015, subject to the conditions mentioned in my previous post. This would restore the single tax credits.

    Whether you are considered resident or non-resident also affects the married credits and rates.

  2. If you are not resident you are not entitled to any credits, as above.

  3. Entitlement to the Married Personal Credit and rate bands depends upon the income of both spouses being assessable to Irish income tax.

  4. If you were considered resident and your wife had no income, you would be entitled to the credits and rate bands applicable to a married couple.

  5. If you were considered resident, even though your wife has an income, you might still be entitled to a portion of the married credits and rates, which Revenue would calculate.

I notice that the amended Tax Credit is on Week-One-Basis.

Has your total Irish income to date exceeded €32,000?
 
Thanks for the explanation.

My total Irish income to date has not exceeded €32,000?

Sophrosyne said:
Hi Shadowsilk

There are a number of issues.

  1. Residence Position. Since you will not be present in Ireland for 183 days you are non-resident for this year. You appear to be from a country, which is outside the EEA and with which Ireland does not have a double taxation treaty, and so you are not entitled to any credits.

    You can elect to be treated as Irish resident for 2015, subject to the conditions mentioned in my previous post. This would restore the single tax credits.

    Whether you are considered resident or non-resident also affects the married credits and rates.

  2. If you are not resident you are not entitled to any credits, as above.

  3. Entitlement to the Married Personal Credit and rate bands depends upon the income of both spouses being assessable to Irish income tax.

  4. If you were considered resident and your wife had no income, you would be entitled to the credits and rate bands applicable to a married couple.

  5. If you were considered resident, even though your wife has an income, you might still be entitled to a portion of the married credits and rates, which Revenue would calculate.

I notice that the amended Tax Credit is on Week-One-Basis.

Has your total Irish income to date exceeded €32,000?
Click to expand...
 
Shadowsilk said:
My total Irish income to date has not exceeded €32,000?
Click to expand...


Hi Shadowsilk

Apologies! I should have said €33,800 rather than €32,000 in my previous post.

I cannot think why the entire 20% rate band was allocated against “other income” if you do not have Irish income other than your salary or why the top rate of USC is being applied to that salary.

Perhaps your wife's income is being confused with yours, but that would not account for the 8% PRSI.

You should contact Revenue immediately for an explanation.
 
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