Revenue Note for Guidance

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Revenue Note for Guidance

985E PAYE Employment not wholly exercised in the State

Summary

Section 985E deals with the case where—

  • an employee carries out his or her duties both in the State and outside the State, and
  • only part of the employee’s earnings is chargeable to under Sch. E, being emoluments in respect of the performance in the State of duties of the employment.

In such a case, where the amount of the employee’s pay which is not chargeable under Schedule E is unknown, an officer of the Revenue Commissioners may, on application by, or on behalf of, the employer, give a direction as to the proportion of pay on which PAYE is to be operated. In the absence of a direction, the employer must operate PAYE on the whole amount.

Details

(1)(a) “appropriate person” means the person designated by the employer for the purposes of this section, and if no person is so designated, the employer.

(1)(b) Any reference to a payment made by the employer includes a reference to a payment made by a person acting on behalf of the employer and at the expense of the employer or a person connected (within the meaning of section 10) with the employer.

(2) The section applies in relation to an employee in a year of assessment only if the employee works or will work in the State and also works or is likely to work outside the State.

(3) Where in relation to any year of assessment it appears to an officer of the Revenue Commissioners that—

  • some of the income of an employee to whom the section applies is assessable to income tax under Schedule E, but
  • an as yet unascertainable proportion of the income may prove not to be so assessable

then the officer may, on an application made by the appropriate person, give a direction for determining a proportion of any payment made in that year of, or on account of, income of the employee, which is to be treated for the purposes of PAYE as a payment of emoluments of the employee.

(4) An application for a direction is to provide such information as is available and is relevant to the giving of the direction.

(5) A direction is —

  • to specify the employee to whom and the year of assessment to which it relates,
  • to be given by notice to the appropriate person, and
  • may be withdrawn by notice to the appropriate person from a date specified in the notice.

(6) A direction may not be withdrawn earlier than 30 days from the date of issue of the notice of withdrawal

(7) Where a direction has effect then the proportion of the payment determined in accordance with the direction is to be treated for the purposes of PAYE as a payment of emoluments of the employee.

(8) Where in any year of assessment no direction has effect in relation to an employee to whom this section applies then the entirety of any payment made of, or on account of, the income of the employee is to be treated for the purposes of PAYE as a payment of emoluments of the employee.

(9) The provisions of the section are without prejudice to—

  • any assessment in respect of the income of the employee in question, and
  • any right to repayment of income tax overpaid and any obligation to pay income tax underpaid.

(10) Where section 985D applies—

  • references to the employer in this section include references to the relevant person (within the meaning of that section), and
  • any reference to a payment made by the employer includes a reference to a payment treated, for the purposes of PAYE, as made by the relevant person.

Relevant Date: Finance Act 2019