Revenue has published updated guidance on the tax treatment of RSUs. The guidance sets the PAYE procedures to be applied to facilitate granting of double taxation relief in real time. The guidance follows engagement between practitioner bodies and Revenue under the TALC forum on the implications of the measures introduced in Finance Act 2011 which brought RSUs within the scope of PAYE and chargeable to USC and PRSI.

The PAYE procedures as set out in the guidance will apply to RSUs that are taxed through the PAYE system from 1 January 2013 and are subject to a foreign income tax. The position will be reviewed for 2015. In general, the arrangement provides for a credit in respect of foreign tax deducted in a country with which there is a double taxation agreement when computing an individual's income tax liability on RSUs under the PAYE system.

A number of conditions, which are also set out in the guidance, are deemed to apply for the purpose of this interim arrangement. Non-compliance with these conditions will result in the withdrawal of the arrangement and the application of standard interest and penalties.

Revenue's guidance is inserted in Part 5 of their Income Tax, Corporation Tax and Capital Gains Tax manual.