Special Assignment Relief Programme (SARP)

www.pwc.ie/HRS
Human Resource Services
Special Assignment Relief
Programme (SARP)
May 2015
SARP has been through a number
of “facelifts” since its introduction,
and it does look like it will now be
much more accessible and effective
for companies.
What does SARP look like in 2015?
SARP has been through a number of “facelifts” since its introduction in 2009. Recent
enhancements would appear to be very positive for business and should make it more
accessible than previously. The 2015 version removes the previous earnings ceiling of
€500,000, which was seen as one of the main shortcomings of the relief, and it is also
available to employees who have spent greater than 6 months with the group
(previously 12 months).
The key features of the relief are summarised below.
What are the qualifying conditions for SARP?
In order to avail of the relief, the individual must:
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have a base salary of at least €75,000;
be a full-time employee of a company tax resident in a country with which
Ireland has a Double Taxation Agreement (or information exchange
agreement) for 6 months immediately prior to arrival;
arrive in Ireland to perform duties for their employer or with an associated
company of their employer – i.e. the relief does not apply to organisational
“new hires”;
become tax resident in Ireland; and,
not have been tax resident in Ireland for the five tax years immediately
preceding the year of arrival.
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Contacts
Pat Mahon
Partner
Mary O’Hara
Partner
Jean Coleman
Director
Email: [email protected]
Phone: +353 (0) 1 792 6186
Email: [email protected]
Phone: +353 (0) 1 792 6215
Email: [email protected]
Phone: +353 (0) 1 792 7380
How does SARP operate?
The relief operates by allowing a 30% deduction from any employment income in excess of €75,000.
The relief extends to non-core remuneration, e.g. bonus, benefits in kind and share based remuneration. The
relief is available to individuals on local Irish employment contracts or individuals remaining on overseas
contracts. Relief may be claimed either up front via payroll deductions (if the company wishes to facilitate this)
or after the end of the year via a tax return. Irish domiciled individuals may qualify for the relief provided
certain conditions are fulfilled.
Example
Qualifying individual earns €250,000 base salary and has other employment earnings (e.g. bonus, shares) that
are taxable in Ireland of €400,000. The relief operates as follows:
(€650,000 - €75,000) * 30% = €172,500
Total Employment Earnings
€650,000
Less Relief
€172,500
Taxable Income under SARP
€477,500
The overall value of the relief is the amount of the relief calculated at the assignee’s marginal income tax rate:
€172,500 * 40% = €69,000
Note: Relief is from income tax only – PRSI and USC charges will not be relieved under SARP.
What other benefits are available?
Where SARP is claimed, the individual may also benefit from the following on a tax free basis:
1. one “home leave” trip per year for the individual and his/her family.
2. school fees of up to €5,000 per child, per annum.
What are the reporting requirements?
Employee
Form 11 self-assessment tax return (by 31 October each year)
Employer
SARP1a application form (within 30 days of the employee’s arrival to Ireland)
SARP employer return (due by 15 February each year)
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HRSB 15-03