RCT - Principal Contractors

New Registration Procedures for RCT Principal Contractors.

Section 20 Finance Act 2004 amended Section 531 Taxes Consolidation Act 1997 relating to Relevant Contracts Tax. The amendment included an enabling provision allowing Revenue, by way of regulations, to set up and maintain a register of Principal Contractors in the construction, forestry and meat processing industries and to require all Principal Contractors in those industries to formally register as Principals.

The Income Tax (Relevant Contracts) Regulations 2004 (S.I No. 761 of 2004), made recently by Revenue provide that the new registration procedures will come into effect from 1 January 2005.

Obligation to Register

A person who becomes a Principal after the operative date of the Regulations i.e. 1 January 2005, must formally notify the Revenue Commissioners of that fact within 21 days of entering into his or her first relevant contract as a Principal. A person who is a Principal on the operative date but has not previously indicated this to Revenue must do so within 21 days of that date. Notification must be made on the appropriate form. The standard registration forms for individuals (TR1) and companies (TR2) have been amended and now contain an application for registration as a Principal. For persons who are already registered with Revenue for IT, CT or VAT, the appropriate form is a Form P33. These forms are available at www.revenue.ie. Revenue will subsequently give notice to such Principals that they have been registered.

Persons who have already indicated to Revenue that they are Principals

A person who is a Principal on the operative date and who has previously indicated this to Revenue, is taken to have met the notification requirements and will be formally registered as a Principal. Revenue will again give notice to this effect. However, if at the time such notice is given a person has ceased to be a Principal, Revenue must be informed in writing of that fact within 21 days of the date of receipt of the registration notice.

Changes to registration details/Duty to inform of Cessation

Where a change occurs in any of the details provided, or taken to have been provided, to Revenue, or where a person ceases to be a Principal, the Regulations make provision for Revenue to be informed within certain time limits.

Cancellation of a Registration

In addition, to allow for the ongoing maintenance of the register, the Regulations allow Revenue to cancel a person’s registration where in its opinion that person has ceased to be a Principal. Persons affected will get 21 days notice of the intention to cancel the registration and will have the opportunity, within that period, to inform Revenue in writing that they are still Principals for Relevant Contracts Tax purposes.

Other Changes

The Regulations also make some minor amendments to the original Regulations to update certain references and to bring them into line with the primary legislation.

Copies of the Regulations may be purchased from:

The Government Publications Sales Office,
Sun Alliance House,
Molesworth Street,
Dublin 2

or through any bookseller. They may also be accessed on the Revenue website at www.revenue.ie.