The scope of income tax The scope of income tax Defines what income is subject to income tax in Ireland Concepts of residence, ordinary residence, and domicile Implications of residence, ordinary residence and domicile

The scope of income tax Residence Current residence rules in place since 6 April 1994 Individual is resident in the State if he/she is present in the State at any one time or several times in a year of assessment for a period which amounts to 183 days or more

The scope of income tax Residence Individual is resident in the State if he/she is present in the State at any one time or several times in a year of assessment and the preceding year for a period which amounts to 280 days or more He/she will not be regarded as resident for any tax year in which he/she spends a period amounting to 30 days or less, and no account shall be taken of such a period for the 280 day test

The scope of income tax Residence An individual is considered resident in Ireland on any day in which he/she spends part of the day in Ireland An individual may elect to be resident for a year of assessment in which he/she is present in the State with the intention and in such circumstances that he/she will be resident in the following tax year

The scope of income tax Residence - Example Example 1- Eric was seconded to Ireland on 15 July on a 12 month contract. During that period he did not leave Ireland at any time. He left Ireland for good on 1 August 2014. Example 2 – Same as above except he left Ireland on 1 May 2014 due to ill-health

The scope of income tax Ordinary Residence An individual is ordinarily resident in Ireland for a tax year if he/she has been resident for each of the three tax years preceding that year An individual will not cease to be ordinarily resident until the individual has been non-resident for three consecutive tax years

The scope of income tax Ordinary Residence - Example Miguel arrived in Ireland from Spain on 1 March 2013, where he took employment and stayed in the country until 1 January 2020, when he returned to Spain, where he stayed permanently. For what years will he be ordinary resident in Ireland?

The scope of income tax Domicile Not defined in the Income Tax Acts Complex legal concept, with a large volume of case law Generally, a person is domiciled in the country of which he/she is a national and in which he/she spends his/her life However, it is possible for a person to be domiciled in a country which has not been his/her home

The scope of income tax Three principles of domicile No person can be without a domicile No person can have more than one domicile at the same time An existing domicile is presumed to continue until it has been proved that a new domicile has been acquired

The scope of income tax Domicile of origin Individual is born with a domicile of origin Usually the domicile of his/her father However, where the parents are not married or the father dies before the birth the child’s domicile will be that of the mother Before reaching majority, if the relevant parents domicile changes so does the childs

The scope of income tax Domicile of choice On reaching majority, he/she can reject his/her domicile of origin and acquire a domicile of choice Must prove conclusively that all links with the country of domicile of origin have been severed By positive acquisition not abandonment

The scope of income tax Domicile of choice Acquired by residence and intention A domicile of choice can also be rejected

The scope of income tax Domicile of choice Acquired by residence and intention A domicile of choice can also be rejected

Implications of Residence, Ordinary Residence and Domicile Resident, ordinarily resident and Irish domiciled Taxable on all Irish and worldwide income

Implications of Residence, Ordinary Residence and Domicile Resident, not ordinarily resident, and Irish domiciled Taxable on all Irish and worldwide income

Implications of Residence, Ordinary Residence and Domicile Not resident, ordinarily resident and Irish domiciled Taxable on all Irish and foreign sourced income in full. However, income from the following sources is exempt: Income from a trade, profession, office or employment all the duties of which are exercised outside Ireland, And other foreign income, provided that it does not exceed €3,810

Implications of Residence, Ordinary Residence and Domicile Not resident, but ordinarily resident in Ireland and not Irish domiciled Taxable on Irish source income in full and other foreign income only to the extent that it is remitted to Ireland Income from the following sources is exempt: Income from a trade, profession, office or employment all the duties of which are exercised outside Ireland, And other foreign income, provided that it does not exceed €3,810

Implications of Residence, Ordinary Residence and Domicile Resident and ordinarily resident in Ireland but not Irish domiciled Taxable on Irish source income in full and other foreign income only to the extent that it is remitted to Ireland

Implications of Residence, Ordinary Residence and Domicile Resident, not ordinarily resident in Ireland and not Irish domiciled Taxable on Irish source income in full and other foreign income only to the extent that it is remitted to Ireland

Implications of Residence, Ordinary Residence and Domicile Not resident, not ordinarily resident, irrespective of domicile Taxable on Irish source income in full and taxable on income from a trade, profession or employment exercised in Ireland

Implications of Residence, Ordinary Residence and Domicile Example Alex has the following sources of income in 2014: Irish salary €25,000 UK Dividends €10,000 USA Rental income €15,000 Alex is resident in Ireland but no domiciled in Ireland. He remitted €8,000 of his UK dividends into Ireland but none of his US income.

Implications of Residence, Ordinary Residence and Domicile Example An Irish engineer moves to Saudi Arabia. While abroad and still ordinarily resident in Ireland he receives foreign rental income of €3,000 per annum and other foreign investment income of €600 per annum.

Implications of Residence, Ordinary Residence and Domicile Example An Irish engineer moves to Saudi Arabia. While abroad and still ordinarily resident in Ireland he receives foreign rental income of €3,000 per annum and other foreign investment income of €1,000 per annum.