If you’ve recently moved to Ireland for employment, or if you are planning to leave Ireland to start a career some place new, you will need to know about Split Year Treatment (SYT) for your income tax liabilities.
Below, we outline what SYT is, the eligibility criteria, how the treatment varies for those arriving and those leaving the country, as well as how to claim tax back.
What is Split Year Treatment?
When people move to Ireland, it usually occurs at some point in the middle of the tax year. This means they are receiving foreign income until the date they arrive in Ireland. The same applies to people leaving Ireland, who receive Irish income until they leave, and foreign income thereafter.
Split Year treatment is a special rule that ensures you are not taxed in both countries for the same income. It only applies to income arising from employment and means you are treated as a resident of Ireland from the date you arrive.
All your employment income from that date will be taxed in the normal way; and generally, full tax credits are allowable on a cumulative basis.
Qualifying for Split Year Treatment
If you’re leaving Ireland, to qualify for SYT you must be resident in the year of departure and intending to be non-resident in the year following your departure. You don’t have to wait until the tax year following the year you arrive or depart.
Although, you must satisfy an authorised officer that you fulfil the intended residence requirements for the following tax year. A letter confirming your employment or an employment contract are preferred forms of proof. If you are unsuccessful, you may reapply at the end of the following tax year.
If you have successfully qualified for SYT and fulfilled your intentions, you will be taxed as resident in the state for the appropriate period only. You should be aware that should you qualify for Split Year Treatment and not fulfil your intention for some reason (e.g. ill health or cancellation of employment), the ruling will stand regardless.
This could leave you liable to pay Irish tax on foreign employment income for the following year, if you were resident in the State for the previous tax year.
Moving to Ireland – Split Year Relief
If you are coming to live in Ireland or you are returning to Ireland after living abroad for a number of years, you can claim split-year treatment in the year you arrive, meaning you will be treated as a resident from your date of arrival.
You will need to be resident in Ireland for the following year to qualify and all your employment income will be taxed in the normal way, once you are in the country. Full tax credits are allowable on a cumulative basis, meaning you can apply a full year of tax credits, despite only being resident for part of the year.
Leaving Ireland – Split Year Relief
If you are leaving Ireland for employment purposes, your Split Year Relief means you will be treated as a resident up until the date you depart. All income from employment is taxed in the normal way up to that point, and ignored thereafter for Irish tax purposes.
Again, full tax credits are allowable on a cumulative basis, meaning you can also apply a full year of tax credits.
Claiming Split Year Relief
If you would like to claim Split Year Relief or need any other help claiming tax back, get in touch with Irish Tax Rebates today. We have the highest average tax rebate in Ireland and the lowest fee; and if you aren’t owed any tax back, there is no fee applied.
Apply online now and we will work hard on your tax back claim to help you get back all the tax you are due.