Reporting Requirements

New reporting requirements for certain termination payments

Under Section 201(2)(a) TCA 1997, payments made in connection with the termination of the holding of an office or employment on the death of the holder or made on account of injury to or disability of the holder of an office or employment are relieved from the charge to income tax.

Section 19 Finance Act 2005 introduced a mandatory reporting requirement for employers in relation to such payments and is effective for all such payments made on or after the 25 March 2005.

Details of all lump sum payments made and treated by employers as exempt by reference to Section 201 (2)(a) TCA 1997 and made after 25 March 2005 must be reported to the Revenue Commissioners not later than 46 days after the end of the year of assessment in which the payment was made.

The details to be forwarded to the appropriate tax district responsible for the income tax affairs of the employee / office holder are -

• The name and address of the person to whom the payment was made;
• That person’s personal public service number (PPS no.);
• The amount of the payment made; and
• The basis on which the payment is not subject to tax.

In circumstances where the payment is on account of injury or disability of the holder of the office or employment, particulars of the injury or disability must also be indicated.

Enquires on this article should be addressed to taxbrief@revenue.ie