1. Background

Arising from discussions at recent meetings of the TALC Direct Taxes Technical Sub-Committee, Revenue is setting out the income tax treatment of the reimbursement of expenses relating to travel and subsistence in the case of temporary assignees from abroad working in the State.

2. Away from normal place of work

One of the main conditions under which the reimbursement (within certain limits) to office holders and employees of travel and subsistence expenses may be made tax-free is that the office holder or employee is temporarily away from his/her normal place of work in the performance of the duties of his/her office or employment.

The normal place of work for an office holder or employee is the place where he/she normally performs the duties of the office or employment. It is a question of fact whether an individual is attending for duty at his/her normal place of work or away from his/her normal place of work on a temporary assignment.

With effect from 1 January 2007, the Revenue Commissioners are prepared to accept that, subject to Paragraphs 5.2 and 5.3 hereunder, tax-free subsistence may be paid or reimbursed for the first 12 months of a temporary assignment provided that the period of assignment in the State does not exceed 24 months.

3. Temporary assignment

For the purposes of this practice, a temporary assignment is one where –

1. an office holder or employee resides temporarily in the State for the purposes of the performance of the duties of his/her foreign office or employment; and
2. there is the intention that the office holder or employee will, at the end of the assignment, return to work at the foreign location from which he/she was assigned

4. Temporary assignee

For the purposes of this practice, a temporary assignee is an office holder or employee who –

1. holds a foreign office or employment with a nonresident employer and, prior to coming to work in the State, was employed outside the State for a period of not less than 3 months by that employer; and
2. holds a temporary assignment (as defined above) in the State on behalf of his/her non-resident employer; and
3. actually performs the duties of the office or employment in the State for the period of the temporary assignment; and
4. remains an office holder or employee of that employer while on temporary assignment in the State.

A temporary assignee does not include an individual who –

1. is recruited to work in the State or
2. in the normal course of his / her duties is posted or transferred from country to country.

Note: It is expected that, in general, the period of assignment in the State should not exceed the period of employment with the employer outside the State prior to the commencement of the temporary assignment.

5. Subsistence Expenses

5.1 Overview

The reimbursement of expenses may be by way of either –

1. vouched expenses (see Par. 5.2 below); or
2. a flat rate (see Par. 5.3 below).

5.2 Vouched Expenses

Reimbursement of vouched expenses free of tax must not exceed the cost of reasonable accommodation (see Par. 5.2.1 below) and meals while on temporary assignment for 12 months.

5.2.1 Reasonable Accommodation

Hotel Accommodation

Reasonable accommodation includes hotel accommodation for an assignee for a twelve month period.

Where a spouse and children accompany an assignee to the State during the period of the temporary assignment, reasonable accommodation includes hotel accommodation for the spouse and children for the first month only of the assignment to facilitate the procurement of rented accommodation.

Rented Accommodation

Reasonable accommodation includes vouched rent, rental of furniture and payment of utilities (e.g. light and heat) which would normally be payable by a tenant.

Where an assignee is accompanied by a spouse and children in the State during the period of the temporary assignment, reasonable accommodation includes rental of residential accommodation which is suitable for an assignee and his / her spouse and children.

5.3 Flat Rate

Flat rate reimbursement of expenses free of tax for a temporary assignee only on the basis of the Civil Service schedule of rates must not exceed the amounts provided for in the tables below.

Period of Assignment	Allowable Tax Free Subsistence
First 14 nights of the assignment	Up to the Normal Rate Civil Service Rates as per Revenue Leaflet IT54
Next 14 nights of the assignment	Up to the Reduced Rate Civil Service Rates as per Revenue Leaflet IT54
Next 28 nights of the assignment	Up to the Detention Rate Civil Service Rates as per Revenue Leaflet IT54
Remainder of the assignment (up to a maximum of twelve months)	Vouched expenses subject to a maximum of three nights subsistence per week at the normal rate

6. Travel Expenses

Expenses which may be paid or reimbursed free of tax include the vouched cost of the journeys to and from the State at the commencement and cessation of the temporary assignment.

Notwithstanding that tax-free subsistence is limited to a twelve month period, in accordance with the Revenue published practice (Tax Briefing Issue 42) the vouched cost of one return trip per year to the home location may also be paid or reimbursed free of tax. This applies to the assignee, his or her spouse and children.

In the case of an assignee whose spouse and children do not accompany him/her on temporary assignment, the cost of one return trip per year to the State for the spouse and children may be paid or reimbursed free of tax.

7. Anti-avoidance

Reimbursement of tax-free expenses outlined above applies only in the case of temporary assignments to the State and where reimbursement is not used for the purpose of avoidance of tax.