If you are a U.S. citizen or resident alien living or traveling outside the United States, you generally are required to file income tax returns, estate tax returns, and gift tax returns and pay estimated tax in the same way as those residing in the United States. Your income, filing status, and age generally determine whether you must file a return. Generally, you must file a return if your gross income from worldwide sources is at least the amount shown for your filing status in the Filing Requirements table in Chapter 1 of Publication 54, Tax Guide for U.S. Citizens and Resident Aliens Abroad (available at www.irs.gov). The IRS web site has a wealth of information available for the overseas taxpayer. Follow the ‘Individuals’ and ‘International Taxpayers’ links, or search for IRS Publication 54.
U.S. Tax Information
Internal Revenue Service
P.O. Box 920
Bensalem, PA 19020
(215) 516-2000 (not toll-free)
Phone service available from 6:00 am to 11:00 pm (EST) M-F
The income that you earn from employment in Ireland is liable to tax and is deducted from your wages by your employer on behalf of the Irish Government. This is known as Pay As You Earn (PAYE). The two basic PAYE rates are 20 percent and 42 percent, with the standard rate of tax (20%) paid up to the cut-off point determined by your level of income and number of dependents, and the higher rate (42%) applied to the remaining balance. There are a number of income tax credits available that can reduce the amount of tax that you have to pay. Self-employed individuals (i.e. people carrying on their own business), are responsible for paying their own tax through the Self Assessment system.
Your residence status for tax purposes is determined by the number of days that you are present in Ireland in a tax year. You are regarded as resident in Ireland if you spend 183 days or more in Ireland during a tax year. If you spend 280 days or more in Ireland over a period of two consecutive tax years, you will be considered as resident for the second tax year.
If you are taking up a job as an employee for the first time, you will need to apply for a Personal Public Service (PPS) Number with the Department of Social & Family Affairs and notify your employer of your PPS Number once you have received it by mail. Next you will need to complete the Application for a Certificate of Tax Credits and Standard Rate Cut-Off Point (Form 12A), available from the Revenue office. After you have submitted Form 12A to Revenue, a Certificate of Tax Credits and Standard Rate Cut-Off Point will be issued to you and to your employer so that the correct deductions may be made from your salary.
In addition to income tax, social insurance (known in Ireland as ‘Pay-Related Social Insurance’ or PRSI) and, where applicable, a 2% Health Contribution are also deducted through the tax system by employers. PRSI is calculated on a weekly basis on gross income less any relevant exemptions. Social Insurance provides funds for social welfare benefits and pensions for Irish citizens, and the Health Contribution goes to the Department of Health and Children to aid Health Services.
As some types of income can be taxable in both the country where it is sourced and also in the country in which the recipient of that income is resident, Ireland has a number of double taxation agreements with other countries in order to avoid taxation in both countries or to allow credit where tax is paid in both countries. If your income is chargeable to tax in Ireland and in a country with which Ireland has a double taxation agreement, a double charge is prevented by either exempting the income from tax in one of the countries, or allowing a credit in one country for the tax paid in the other country on the same income.
The precise treatment of your income will depend on the details of the particular agreement, the nature and source of your income and, in some cases, on your nationality/citizenship. If the income arises in a country with which Ireland does not have an agreement, the amount of tax in Ireland will be the net amount received by you after the deduction of the foreign tax paid. There is no credit available for foreign tax paid against your Irish tax liability on the same income.
Department of Social & Family Affairs