Ireland Tax & Immigration for Expats

INTRO: 

HTJ.tax, the International tax firm for six, seven, and eight-figure investors and entrepreneurs who are living that international life. Are you ready? 

DERREN JOSEPH: 

All right, so we welcome. Welcome, welcome HTJ.tax. We do these live streams every week and put those who could make it. If you have colleagues or friends that wanted to be on and could make it, please let them know that it is being recorded. It isn’t on the website, HTJ.tax but also wherever you get your favorite podcasts, whether that’s YouTube, SoundCloud, Spotify, iTunes, or wherever you probably gonna find it. So it will be available within 24 to 48 hours after we complete this stream. So we have the honor and the privilege of welcoming back, Mr. Damien Malone, accountant, extraordinary based in Dublin. And for the first time, we have ever Richardson immigration attorney, to respond to some of the questions that some of you did submit in advance, then we’re kind of immigration-related. And so if it’s outside of our skill sets, we got Emily on board to the point you guys, in the right direction, as always, we’re legally required to say that we’re not giving advice. So don’t think that you getting actionable intelligence here. What we doing is perhaps providing you with the key principles, the three ideas, and key issues that you would need to consider as you find your preferred professional, you prefer the accounting professional you for, for immigration maturity, to work with. So again, we talk in general principles. This is not advice like you consider it entertainment or educational, but it’s not advice. So just kind of covering that base. So without further ado, I will hand you over to Damien and Emma, you could please introduce yourself. I know when you guys have a few introductory remarks and some fantastic flights to share before we go into the Q and a portion, I would say ladies first. So Emma will Richie you, 

EMMA RICHMOND: 

Thank you very much and lovely to join you all. And so just to give you a little bit of background, I’m a lawyer here in Dublin and practicing in the area of immigration and employment. And so hopefully can steer you in the right direction in terms of any queries you might have about coming to our Ireland via, to live and potentially retire in Ireland or to live and work in Ireland and the various options that are open to you. And it is one of those areas of fash and thankfully Ireland is known to be welcoming. And we certainly like to welcome you here. And as a result, some of our rules and regulations around immigration permissions and work permissions are relatively amenable and it’s quite practical. And generally, the view is people coming to Ireland, it’s good for Ireland. It brings business to Ireland and that drives growth. So that’s what Arland wants. And so in terms of, I have a few slides as Derren mentioned, and I will, I’m sure if I can share my screen here with you. Oh, do I have to share a screen and suit? So that’s sharing there now. Like, give me just a thumbs up and down. Yep. Perfect. And so in terms of what we can do, so the first option, I’m just going to touch upon people that may like to retire to Ireland. So not necessarily intending to work when they come to our Ireland, both have, you know, potentially looking at moving to a nice and nice place in the south coast of Ireland and some nice scenery. So in terms of the requirements there for people looking to retire to our island, there is the option to obtain. It’s called an immigration permission stamp, zero on all that it’s required. You do need to go through an application process, but you do need to demonstrate effectively that you won’t become a burden on the state so that you have an income of 50,000 per year, that you have access to a lump sum to cover sudden major expenses. So what that is looking to cover is to obtain this stamp. You don’t necessarily need to buy property in Ireland, but what they’re looking for in terms of the lump sum coverage is that in the event, something happened, you could buy accommodation, you could provide for yourself. And in terms of the application process, it is a letter application. It’s not a detailed application form. It’s a letter together with supporting documentation and both from a local accountant in your jurisdiction to verify effectively your accounts together with supporting documents in terms of income. So typically what I would see clients coming in is that income is coming from a pension that they have. And so that rolling income, and then they look to get their stumps, their residence in Ireland. Ultimately it does not lead you to citizenship. It just gives you the power to reside in Ireland. And the other option that people will look at in this situation, is that this gives you the potential to both just live in Ireland, but also potentially the benefit of working in Ireland and that’s our immigrant investor program. So that is where you invest in Arland, in return for residency rights, for both you and your dependence. And, and that’s dependence typically up to the age of 23. There’s no requirement to reside in Ireland once you get this. And the only requirement is to spend 24 hours each year in Arland and where I have seen this and what is most attractive, a lot of parties that go this route, they’re looking to secure for the next generation. So potentially their children to given residency rights in another country. And if they do reside here on a long-term basis, ultimately it can lead to citizenship. And there are a couple of options for how you wouldn’t invest in Ireland. The most common one is enterprise investments. So that’s investing a million in an Irish enterprise and for three years, and that typically they’re, they’re low yield investments. So they are just the benefit of having a home us, each investment is approved by the government at the time of your application, the other alternatives, are less popular investments in investment funds or the real estate investment trusts. And neither of those are as popular as the straightforward 1 million investment. And on the other one that I have found to be quite popular and popular on the basis that it’s a lesser investment amount, and that is your indictment to mind. So for the indictment, you, and you donate 500,000 to some worthy cause in Ireland, it could be a charity. The most recent one I had was to an educational institution, a third-level educational institution. And in that case, I’m one of the benefits. If you have a group of interested parties, it lowers the investment to nine to gain or the donation of mind to 400,000 per person. So if you have five or more applicants, and in that case, what they did was they donated five Steinway pianos to a third-level institution and they hit their donation and all got their residency for them and their dependence. And so there are, it’s certainly an attractive way and to do as it is understandably, it’s becoming more and more regulated. So there is a due diligence process. You will need to gash your local, local, reputable, accountancy practice to effectively verify all your records. And they in turn want to see the path of phones that come into Arland. So where they’re coming from, and that that comes in in a verifiable manner and the alternative to come to our dentist to come and work in Ireland on that may be to come and get a job with an Irish company already established here or what I have had a lot of people who, if they have successful businesses in their jurisdiction, what they will look to do is incorporate a company in Ireland. And from that, they employ themselves through their entity in Ireland and get a work permit. And the one thing I just flag, if you’re looking at that route is you will need to also hire somebody locally as well for any work permission, Arland, you need to maintain a 50, 50 ratio of EEA to non-EEA workers, and both, they don’t have to be equal in status. So typically what I’ve had is, you know, someone employs themselves and hires an assistant to work two or three days a week, and that meets the 50 50 requirement and the different permits again, different requirements for each one by far, the most popular is the critical skills work permit, and certainly where people are looking to relocate. And it requires a salary of 64,000. And if you cross that 64,000 Euro per annum salary, it is deemed a highly skilled job. The alternative is if it’s on a lower salary, is that your, role is listed on the highly skilled list. And our highly skilled list is typically areas where we have a shortage. So they only updated it today. And it has now given the challenges with recruitment in the healthcare sector, and it now includes physios and occupational therapists. And, but traditionally it would have been aimed at the ICT and technology engineering sector. And so there, we would have a high number of Indian nationals working in Ireland and highly qualified in tech, but potentially on salaries of 32,000 Euro per annum. So, it is quite achievable in terms of critical skills work, permit, the alternative, a general work permit. The disadvantage to this that I would flag for most people is that you need to advertise and effectively prove you can’t hire locally. And that’s why you’re getting this general work permit. So it doesn’t tend to be as attractive for somebody who may be just looking out of choice to relocate, to Arland. And if you’re looking at more short-term scenarios, something like our intra-company transfer permit and the maximum you’ll get it for is five years. So what you do is, you know, if you have a group company established in Ireland that you may transfer and relocate to Ireland for that period. And then the atypical permission is a very short stay, but it allows you to work for 90 days. And so I’m in the world of hybrid working. It may be something that people, you know, want to come and just work in art and for 90 days and return home to their, their home jurisdiction and the advantages of things like the critical skills work permit on the general work permit is time spent in the country will count towards citizenship. So when you apply for citizenship in Ireland, you need to have been resident in the country for five out of the previous nine years. So these types of work permits will generally people will move ultimately to citizenship. So they’re not in, a revolving world of reapplying for work permits every couple of years, it does transition across. And so, as I said, at the outset Arland by and by welcoming, we want people to come to Ireland. We want people to bring money to Ireland, to invest in Ireland, and on certainly our immigrant investor program that has driven some very successful projects in Ireland, effectively often projects that government wants to promote, but don’t necessarily have the phones. So there has been some major regeneration of certain parts of our Ireland by the immigrant investor program, we have injected some money into social housing and through the investor program. And similarly, our nursing home sector was one of the most popular because again, it was an area where we were lacking. And so if you are interested in any of those areas, certainly can give you more guidance on that and would be happy to provide more advice and more details on that. So I will pass it over to Damien who can give you some of the more detailed stuff in terms of taxation.

DAMIEN MALONE: 

Exactly that was great. I suppose the bit of overlap that we would see with the dash, and that is being fairly regularly, I suppose we would assist with, and those submissions to the department, as far as vouching, I suppose, and people that are coming to our lender that are maintainable income sources and so forth for those applications. And so I’ll just share my screen here and just get into it into my slides here. And let me see, there we go. So guys at Damien Malone is my name, I’m the founder and managing partner of my own. And Colt I’m aware, I suppose, by Ireland standards and midsize and accounting, all this on tax practice. And we also have a separately branded corporate service and operation on the goal and I’m dot predominantly and assist and support, I suppose, privately in foreign direct investment into Arland. So I suppose on a day-in and day-out basis, the team that I’ve worked with in the dock division of the business is working with people from overseas who want to come over. I need our life in our under setup and business operations in Ireland. And of course there, and they’re usually that are usually the two are usually linked. So just to start to run through the taxes, what tax do you have to deal with when you come to Ireland. So obviously the main one and his income tax. So, so when you come to Ireland and if you’re going to work in Ireland or whatever, you pay your income tax, and that just treats different forms of a direct income tax. So we have pay, which is called P or pays you wearing a USC university associate chart, which is a tax that was brought in in our recessionary years. And unfortunately, it’s still there. We haven’t managed to get rid of it. And then we have PRSI, which is our social insurance, social insurance. So each is taxed dive individually and separately from the other. And it’s quite complicated too, I suppose, when, if you’re a director or if you’re going to be an employee and you see an Irish payslip for the first time, it’s quite difficult to understand and follow the calculations and all of that because of how complicated the system we have, what I suppose, what I would, what I always say as a, as a good way to get an understanding all that far, a single person earning more than 35,000 or would more than 45,000 of taxable income and Ireland, you’re going to be paying, give or take 50% on every Euro and above the Chardy 5,000. So it is quite severe, and it is quite significant over here. And our corporate taxes are a fair bit more advantageous. And I, and we, we, we, our reputation in Ireland and for attracting foreign direct investment is all around us. And we have our headline rate of 12 and a half percent. And we do have a couple of other rates that we have a 25% rate than for companies that would have passive income such as rents and other investment types and so forth. But then we also have some lower rates and with the, what we call the knowledge development box, which was an initiative that was brought out in recent times and all that as well. But the headline rate is 12 and a half percent. We’ve our competent gains tax or CGT, which is disposed of RA gains on disposal of, of assets. And then the headline rate for that is targetry percent. Again, we do have some exemptions and some differences with the doc, which we’ll touch on later. Capital acquisitions tax is gifts and inheritances. And I headline rates with that as well as tardy 3%. And we have a VAT. So for people coming to America, where there is no VAT, this is essentially a consumer tax, something similar to your sales tax. And it’s quite complex complicated for anybody who comes to live in Ireland and wants to set up a business for the first time with that. And we have got several different rates with that, depending on the nature of the services supplied and so forth. And Stan choosy is a, is a tax on transactions in Ireland. And obviously, anyone come into our and to buy a home at we’ll have stamp duty to pay on the, on acquiring the home and for residential property, 1% up to a million euros, and it’s 2% and four transactions over a million euros on residential property for anything commercial-based, it’s, it’s a lot more, and it’s a lot more significant it’s currently at seven and a half percent. So just to, I suppose, be aware of that, then we have a tax that was introduced maybe 5, 6, 7 years ago. And, and it said that the first time we’ve had actual attacks on property. So, every property owner has to pay this annual tax, which is linked to a supposed market value of a property. So, and if you’re a homing to Ireland on you decided you wanted to live in some of the off-market areas in south Dublin and so forth, this is quite a significant part that attaches to valuable property. So am I supposed to be mindful of it? So then for people and for, you know, for non-nationals who and who are coming to our Ireland. So there are three teams, real depth, determined, and the extent to which one is charged to tax in Ireland. And they are persons at residency status. There are what we call ordinarily residency status under domiciled. So a person is resident in Ireland for tax. If they’re here for 183 days or more in the calendar year or crucially 290 days between two years. So on average, then if a person is going to come to Arland or have toys, but Ireland, they can’t be in the country for more than 140 days if they, if, if, if they want to avoid and, you know, being caught under Irish residency rules and where an individual may be resident in Ireland, but resident somewhere else also, we’ve got different features that we look at under the, under the treaties and case law and so forth, which are based around where a person would have their more, I suppose there are more central, personal and economic interests and ties and where they would have a permanent home available. So a person can be a resident in two countries. And we look at these other factors than to, I suppose, crucially decide is where are the resident? So the concept of ordinary ordinarily resident just means that if you’re a resident for three consecutive years in Ireland, you automatically become Barton’s earlier resident. And then the concept of domiciles, which is an important concept for anybody common to Ireland from overseas, generally, where you’re, where you’re born is your, is your, is your place of domiciles. And it’s, it’s, it’s very difficult to change this. And I, I think the example we gave before Darren duck factors that they look at is the only real ways that cases have been made as to where you can change this as if you have if you’re so sure that you’re, you know, you’re, you’re, you, you, you want to cease your ties with a country, and you’re going to, you have you, you have your graveyard plot picked out and all of that outside of the country that you want to see his toys with. These are the factors that, that they’ve looked at before when one wants to essentially change where the silence for tax purposes. So with the em debt, the DAMA soil, and the concept of domiciles is important. And because obviously in Ireland, we have what we call a remittance basis, taxation, which is a very advantageous and a very advantageous thing in our tax code for people who are not Irish national was put who on to come and live and work in our then really what this means is, is that they’re only taxed in Ireland on Irish source income. So local income from an employment or from a business that they would set up crucially only their Foreign Income to the extent that they remit it into our, what this means is that the spending in R and R to bring it into, by responding accounts. So in teary, on, in practice, you could have a wealthy and Wealthy non-national come to Ireland that has investments and business interests all over the world. And none of that income is liable to tax in Ireland. If it’s not remitted if it’s kept outside of Arland and we have a distinction between what’s called income and capital phones, whereby if you have accumulated wealth, essentially before, and taking up residence in Ireland, you can bring prior capital that you’ve already generated. And from at the time you took up residence in Ireland and that does not tax about when you bring it in. So it’s the distinction then going forward between what was a capital that you Aaron and that wealth that you generated before taking up residence in Ireland, and then your ongoing income from your, from your investments and your business interests and so forth. And we’ve emitted in space sustained for capital gains, as well as the foreign capital gains are generally only taxed if you’re non-domiciled in Ireland, to the extent that they are remitted into Ireland, for someone who comes to live in our, in the tape or presidents in Ireland, from it inheritance perspective, you’re generally not caught from inheritance tax in Ireland, unless you’re resident for five consecutive years in Ireland are, unless there’s a couple of other scenarios that you could be where it’s already situated property, or the person who you’ve received the inheritance from and was, you know, was resident themselves at the time of that in Ireland. So again, generally, it’s for someone in the first five years, it shouldn’t be once it’s a bit of planning is done at that. There would be inheritance tax and capital acquisition snacks as a called and should they come into an inheritance. So just from a filings perspective in Ireland, anyone thinking of setting up a business or an operation in Ireland is someone Coleman to live in Ireland that has an, you know, has obviously investments and so forth. So the income tax and a regime and Ireland, so generally you have till the end of October, each year to file your return for the proceeding year. So in October 2022, you’d be expected to file your tax return for 2021 by that time. So it’s called a Form 11 and again, a big part of the tax compliance and that we would do between now and is around all of that for our client base, for people who want to come over and set up a corporate. So to set up a company, obviously to avail of the lower tax rate and profits and all of that, and generally how that works is you have your select, your accounting periods. You have described that you have discretion over not more or less, and you file your annual return to corporate profits on the 23rd day by the ninth-month post the financial period. And so let’s just say how that on 31st of December 21 and accounting period for your company, your father, your, your you’d be due to file your corporation tax return by the 20th harvest September this year. So there’s quite a gap. And by the time the income is errand on when the actual return declares that income is due to be filed. We also have a current Emory tax regime. And so after your first year, when you, and know, when you get into the Irish system, you do have a preliminary tax obligation where you, you, you, you make a payment on account, essentially based on that, one of the numbers of ways to calculate based on the extent of your liabilities, and if you’re a company, the size of your company. So for VAT. So if you go into business of your own accord, when you come to Ireland, you automatically assume the role of being an agent for the Irish tax office as regards VAT is concerned because you have, once you are going to sell an excess of certain thresholds, you know, you must register for VAT and collect the 80 on behalf of the Irish government. So that’s a bi-monthly and a bi-monthly exercise when you’re starting and it can become four monthly, six-monthly or annual once your pattern of trade is established. And again, our general, I suppose, accounting and compliance department and our bread and butter would be doing those VAT returns for our clients and Monton and Mont out on that. And if you’re going to employ staff, or if you’d want to set up a company and apply yourself, you have a payroll that needs to be operated on a couple of years ago, we brought in what’s called pay modernization, where this is all done in real-time. So essentially when you have a payroll and operation, you’ll report the actual payroll figure. So the salary that you take and the tax Jew on the, on that salary in real-time, essentially, and then you make a monthly payment at the tax office and Florida, and as regards to stubble as the compliance and the compliance around tax monitoring and tax collection and all of that. So we do have several, I suppose, things to be very wary and, and mindful of. And if you’re a neighbor filing your tax returns and for income tax and corporation tax, you can be just hit with what we call the surcharge, which is a flat percentage based on an actual liability. They can also be interested in polls, and then they’re sort of fixed type penalties that stair as well, and suppose for more serious cases, when there’s a revenue audit or worse, again, there’s a revenue investigation into and into someone’s tax affairs. You kind of, and that leads to possible publication under the prosecution. And the Irish courts to publication is where the tax owing is in. It is more than a certain amount, your name and the amount get published in the paper. So obviously, and key there is just to make sure you, you, you, you engage somebody who will keep you compliant and make sure things are, things are done promptly on generally done. You don’t have any difficulty in Ireland, just briefly from the Social Security perspective. And so we have both employer and employee, peer Rezai employee. Our appearance is really where you’re employing staff that aren’t, that isn’t yourself essentially in a company scenario. And that is, it has now become quite a significant extra cost to anybody that isn’t blind staff in Ireland. It’s just over 11% at this moment in time. So if you’re going to apply somebody in your business in Ireland, and really if this 11 odd percent ex-driver costs in most cases and to, to pay, and that’s going to increase over the next couple of years as well. And if you’re self-employed, so if you come over and don’t set up as a company, you pay your parasite annually at the time of doing your, your, your, your tax return that we mentioned. As we mentioned previously, the parasite itself is broken down into these classes. So we have different classes or different types of disappearing. Depending on the class that you fall into, that determines the state benefits essentially got you, that you have entitlement to. So we’ve quite a few different classes, but the two main ones that you will come across that will be relevant are class a and class X, and class a is generally far self-employed. People are far directors of companies that would have a controlling interest in those companies. And of course, as well, if you have a controlling interest in a company, and you’re a director you don’t have to pay the extra 11% employ your parasite on your payroll, true and true data. And I suppose I’ve just listed it here. What’re some of the differences between the two are so in class, as you don’t get an endless benefits, cares, benefit health and safety benefits, and occupational injuries benefits with class a and class as the main ones that I’ve listed there that you get are job seekers, benefits, maternity benefit in the course that the state pension. So you do get some level of those benefits with both class a and class S M a doctor, essentially where the money goes to the parasite at your pay. And that’s the dope to that. Your wages are as you pay them. And at the end of the year on your form 11 on your income tax return, it goes to fund, I suppose, the swap gets paid out from doc if he can’t work, which is job seekers benefit, or if your family planning and having kids or so forth. And when you reach retirement age. So just a few final points just that I have here just to flag that that could always be useful to know, and maybe of interest to looking to come over and live in Ireland and set up a little operation in Ireland. We have a very advantageous tree or corporation tax exemption. So this is relevant to businesses that could potentially employ people on the ground in Ireland. And this has the effect of the, essentially the employer peer resides at your pay on those wages can be credited against your corporation tax bill. So in theory, you could have a business operating in Ireland. It doesn’t have to pay any corporate tax profits for three years. And we’ve, you know, we’ve worked with quite a few businesses who have been able to, you know, HUD staff on the ground in Ireland, where we’re able to avail of this concession for them.  We do have a fairly nasty and what’s called BIK or benefit and calling regime in our tax code. And really what this has the effect of doing is if you have a company arrangement and your company is paying perks on your behalf, such as let’s say your medical insurance, or is providing you with a vehicle to drive around and all the dots that this tax kicks in, and it is quite nasty. So just to be aware of that, there are some little exemptions that we can get value out of for our clients, you know, with, you know, to navigate around this as well. And it will be important to take advice from a tax advisor and anybody that is thinking of setting up a business in Ireland as to what you can do and how one can structure their company. And what’s in their company is tax-efficiently as possible. Probably the most advantageous relief we have in Ireland at this moment in time is around pension contributions. And whether you’re going to be self-employed is better, again, like most of our clients would be in a company structure where we can set up these very advantageous executive pension schemes, and, you know, significant pension contributions can be funded out of company profits in a very tax-efficient and compliant manner. It’s one way for any business that is going to make any profits of significance, I suppose, to manage control and how those profits can be, can be sheltered from it from a tax perspective for entrepreneurial and people who may set up businesses with the potential of the businesses and being sold. And in the years to come and marketable businesses, tech companies, and the like D we’ve quite advantageous reliefs, they’re called entrepreneurial relief and retirement relief, which give, and in return the retirement relief scenario, there’s no tax on a potential sale of it and other business. And with entrepreneurial relief, there’s a reduced 10% rate, on the shares of a company that will qualify for this. So again, for entrepreneurial people that may have a business that could potentially be sold down the road, and we do a lot of work then down below with the Irish and holding company arrangements and structures. And again, D this is better in the dash, you can, for entrepreneurial people, you can potentially sell and investment companies, and there’s no capital gains tax at the holding company level with that. And of course, then we do some international residents, crown and Dan, where we can potentially get somebody or get all of that, that, that the proceeds have successful sales are very tax efficiently with better care for the residents and planning for the individuals concerned. And finally then just to touch on with what’s called stark relief, especially the assignee relief program. And this is far essentially relatively higher-earning people who would come over to take up senior positions in our rich companies and essentially at a certain part of their income. And they can get exploded from the charge to add the charge to Irish tax. So in practice, this would typically, maybe I suppose, as a rule at home, maybe say 25 to maybe 35 or 40% of what the income tax at under personal tax exposure would be on the same salary if this relief wasn’t there. But really, I suppose it’s limited to coming over, taking open employment, and in relatively senior positions in Irish companies. So that’s it for me. So at some points to note here is what I would say for anybody thinking of coma to live and maybe get into M or set up a little business operation on the ground in Ireland dice. 

DERREN JOSEPH: 

Fantastic, comprehensive as always deeply appreciated. So we’ve seen some questions come through. Unfortunately, we may not have time to touch on every request it was asked, but we do our best to cover as much as we can within the next 30 minutes or so. So the first two are immigration-related, so probably AMA this is better handled by the US. And the first question is if someone has an American or Canadian passport, how long can they stay in Ireland? If they have no work permit or investment visa or whatever.

EMMA RICHMOND: 

If on entry into Ireland, they will be given a 90-day stamp. So they don’t need to apply for any visa and advance. That’ll just be given at immigration at the airport for Canadian and American nationals.

DERREN JOSEPH: 

Right. And kind of following on from that, of course, the Republic of Ireland and the UK, have a common travel arrangement or agreement. And if you enter that same person with the U S so Canadian passport, they entered the UK. They may be permitted to stay up for 118 days. So with the CTA, how does that work? 

EMMA RICHMOND: 

The CTA only applies to Irish or UK citizens, so they won’t have the beneficial fash. And so typically, you know, you could travel to the UK from Ireland on your 90 days, but your 90 days in Ireland stuffs and restarts when you reenter. 

DERREN JOSEPH: 

Gotcha. Okay. That’s great to know. Next question. Someone is asking about using the term golden visa as the investment visa that you described in great detail. Is that also known as the golden visa? 

EMMA RICHMOND: 

Yeah. That will be, our immigrant investor program or IEP for sure. And it’s the same as the golden visa program. 

DERREN JOSEPH: 

Okay. Understood. So someone is asking about it, but of course, you went into it in great detail in your presentation. So no sense diving into it again, this one we’re going to move on to taxes. So Damien, how to do, and again, you covered this in your presentation as well. 

DAMIEN MALONE: 

Yeah. We, we both, what I would say, Darren, just, what’s always what people sometimes don’t realize is it’s a self-assessed process. So it’s not like the tax office tells you this is where your tax resident is, but it’s up to you essentially to self-assess. And what, obviously happens in practice is you do it in conjunction, which is, our accountant and your tax advisor, and as to where you are tax residents. So, we would have liked it. Dr. Risha’s tardies would have them for obviously some of our higher earning at taxpayers, and that is in our Irish citizens that are with, that did have a, a department that would monitor their movements. So if, if it is, if it is a case that someone with quite significant levels of income and means, and they would generally maintain some sort to travel a red card as to where they spend their days over a year. And that’s typically the type of evidence that would be required in the event of a query raised by the tax officer. So you would typically be next out of spreadsheets and decoration process on your tax return. There’s a sequence of questions that your tax advisor will answer on your behalf. One of those being one of doors being, you know, are you resident in the, in the, in the current year, same way, are you ordinarily resident on, are you of Irish domiciles? If it’s occasion out of our reach on the side, you have to, you have to declare where you are a national, and if it’s the case, you’re not a tax resident in Ireland. You’ll now have to declare where you are a tax resident. I want your local tax reference number in that jurisdiction if you’re filing an Irish tax return. So it has become a lot more comprehensive over years. The extent of the information that’s required on the annual tax return filing in Ireland. Yeah. 

DERREN JOSEPH: 

Oh, okay. So this was the following question, which was around, how does someone registers as being non-domiciled? 

DAMIEN MALONE: 

It’s the very same process. So in practice, what you do is you take the, are you saying no on the, on the tax return on the dusty extent of others, and it’s only then if it’s a case down the road, if something happens in the tax office, you profile you or get information on your circumstances and decide to, to, to query this or challenge you on it, that you get into a whole sort of debacle Denis to trying to substantiate that the declaration that you’ve made on your tax return about your domiciles status. 

DERREN JOSEPH: 

Okay. So like to summarize now, so in terms of the first part of this person’s question, sorry, we didn’t read it out in full for those who are listening and watching. So the first part of the question asked was how does someone sugar tax residents in Ireland? And of course, the demon did cover that when he spoke about, the day’s task, which could be as low as 140 days. If you look at it over two years, as well as a, basically a center of life, you know, a central life test that shows whether you, you know, your center, vital interests, lie, lie in Ireland. Now, if it is that you tribute residents than tax residents, and the question becomes reviewed domiciled and non-domiciled, and I’ll attest to the facts and circumstances that you would go through on the tax return itself. So it’s not something like in some of the European jurisdictions where you applied for it upfront. No. When you file your self-assessment, then by answering the questions as factually as you can, it may lead to you being granted that non-comp status. Am I summarizing it accurately? Yeah, 

DAMIEN MALONE: 

Yeah, yeah, yeah, yeah. Okay. 

DERREN JOSEPH: 

Okay. That’s fair. Right. And moving on from that, the next question is in some of the European jurisdictions. So for example, well, the Southern European countries, so Portugal, which has the NHS, which has the back in the law,  Thank you. Right. If you do it yourself. Okay. Right. So Spain has a backend law and Italy has this flat tax as well. So under those regimes, you, you paid tax on income that arises from within the jurisdiction, assuming your tax resident there, and not in anything that you earn outside, however, you can subsequently bring it in and not be taxed, but that’s not the same in Ireland. Am I, am I correct? 

DAMIEN MALONE: 

Yeah, you’re correct. And you’re correct Derren, if it’s income in the year of assessment that you’re resident in Ireland, you bring it into our, and, and you will be taxed on that income if it’s capital or wealth generated before when you took up residence in Ireland, not should be okay. Once you can clearly distinguish that it is well, our capital was essentially generated before taking up residence in Ireland. And so, yeah, but if you, if you have ongoing annual income, periodic income, and you are bringing down into Ireland to fund your lifestyle or whatever that would be cautious at, that would be caught for tax in Ireland. 

DERREN JOSEPH: 

Okay. So a year of assessment, say I’ve been, I just want to follow this to make sure that you understand. So if someone has been non-domiciled, but still a tax resident in Ireland for say three years and income was earned outside of income investment returns or whatever, outside of Ireland, any year one, can that income that was earned in year one be brought entire learn in year three. 

DAMIEN MALONE: 

Well, not if there were residents in Ireland in your wound. So if it was the year before then they became residents in Ireland. Yes. But not at what? Not at, not, not from the first year on our underwear after. 

DERREN JOSEPH: 

Okay, perfect. And that perhaps leads to some sort of planning opportunity. If they can create some sort of structure that will capture.

DAMIEN MALONE: 

We’d go through their affairs on distinguished, distinguished wealth was generated before taking up residence in Ireland. And we bring essentially that pot into Ireland to do the initial funding robot day with what they need to do to get set open, get housed, and so forth. 

DERREN JOSEPH: 

Okay, wonderful. The next question is a crypto question. What was built was popular. So if you, one of the few people that had gained on crypto this year, and, you know, is there a distinction between the tax treatment of an investor? So for example, just capital gains, as opposed to someone who is actively trading. And if so, what is the difference? What is the distinction under straps rules? 

DAMIEN MALONE: 

So, just let me answer the first part there, which is how our gains on crypto tax. So a tax is the same as gains on any asset or on any other currency, essentially, where it’s a capital gains tax transaction generally. Yeah. Now obviously with crypto then as well, you have possible secondary benefits and gains that kind of crew where you’re swapping one for the other and all of that. And technically like each of the doors is that is separate disposal potentially, or both the tax as well. So just to set out first and foremost as regards, the trying to are, are, are trying to assess whether it’s regarded as an investment and type activity or a trading type activity. And what we’ve noticed is some crypto investors, they say, oh, well, I’m trading crypto, but they’re not that they’re not trading. They’re just labeling what they’re doing as a trade. And I suppose what would be looked at in that scenario is all of the historic case law and on these, what we call the badges of trades and, you know, to try and determine, could there be a trade there. So really if you are trading in our, if you, if, if you, if you want to put the argument forward that it’s a trading activity, you’d be looking at the same kind of features like a start a stockbroker would have far as, you know, for a, a share buying and selling. If you are, if you are wordy advantage out of that, I would approve would only be in a company structure when you went to the rates of tax and the rates of personal tax are so high on trading profits from that, you know, from an unincorporated enterprise. So I suppose probably would say it areas. We do have some reasonably good guidance on that, that I would be happy to share with any of the parties, that is on the caller, who may tune in later. And we can share with them what we’ve done up on that and what they would need to, I suppose, consider if they did want to put forward a case for trading. And obviously, it would be true. Its corporate structure. 

DERREN JOSEPH: 

So potentially profits on trading may be treated in a tax advantage manner versus unincorporated investment income. 

DAMIEN MALONE: 

It would if you were incorporated, it would be worse because you will be paying tax at Myers and Ray it could be 50 odd percent. Whereas the CGT rates 33%, I think quantum might be thinking there is an end to a company situation, and the company was actively hiring on the trade and trying to get that 12 and a half trading activity on the profit. But as I say, quite difficult to achieve that if you’re at a smaller scale sort of private operator doing it out of you’re doing it out of your bedroom, but we can share some reasonably good guidance we have on the dash and for anybody who wants it. Yeah. 

DERREN JOSEPH: 

And will be around what you mentioned earlier, the badges of trade, which are derived from the rich history of case law, which determines whether it’s investment income or treating income. 

DAMIEN MALONE: 

So these badges of trade guys are several factors that they looked at that touch you consider to determine whether trade could exist. And some of them are like, what part was your actual mode of like, is it speculative or, you know, on the extent to which the activity as a resource, like as well, like have you got people assisting you? And I suppose, how professional, how professional are you? How frequent are you transacting? So these are the factors that indicate one way or the other.

DERREN JOSEPH: 

Wonderful. And moving down that list again. So for an Ireland company, and I guess some people have one of the companies in different jurisdictions and for whatever reason, they may want to get a certificate of residence for the company, in Ireland. What are the normal substance requirements that the CAS office would look for before they issue that since the beginning of the resume? 

DAMIEN MALONE: 

So this is actually, this is an interesting one because one of the easiest jobs I can w w we can be tasked with is getting a certificate of residence for an Irish company, because literally what it’s a case of doing logging on today, what we call a Ross account, the account of the online service, and clicking a button, and it comes through there. And Dan now, like, obviously, just to maybe explain, I think this true a bit forwarder, this substance is of more relevance from the actual corporation tax calculation itself, and really to get the low corporate tax rate. That’s where you need substance. The tax office in Ireland will give you the certificate of residence without doing any checks or without asking you any questions as such. And the reason for that is because it’s an actual self-declaration process. So you’ll self-declare that you are a resident. Now, every company by its incorporation is deemed to be tax resident in Ireland, and what can happen. Sometimes people are companies, they, they, they, they, they want to cease to become Irish tax residents. And the way you have to do is you have to make an election in another jurisdiction and be regarded as resident in the holder jurisdiction before you can cease to be tax resident in Ireland, nuts by incorporation, you are automatically deemed resident in Ireland as a final applying to add to that. If it’s a case that you have at let’s start of regarded as weak substance, or a little physical footprint underground in Ireland, and it little or no management or control in here, and the tax authorities can raise an intervention or an audit, or a question mark over that corporate tax filings. If the, if the tax is declared at the, at the trading rate, and we’ve seen it before, like where they’ve done this, where they, you know, where they would raise an assessment and assess that the profits are actually should be classed as foreign profits because there’s no activity or there’s no management or control on the ground in Ireland. And the difference between the two is foreign profits are taxable for corporation tax purposes at 25% and not 12 and a half percent. So that’s more, that’s much more relevant from a substance point of view, and then just obtaining the actual certificate of residence, which is quite an easy process, which is quite an easy process to do. 

DERREN JOSEPH: 

Okay. Fantastic. Great to know. So I’m switching now to the questions that are on, zoom on this list here and zoom. So Colleen is asking about US retirement accounts. So if someone, so I guess this goes back to the point she, she typed this when you, when you have that slide up about non-domiciled, right? So if it is that this retirement fund is private, your time in the fund was accumulated while living in the US, and now you’ve come over, to Ireland. And now you receive distributions from that fund, how was it treated generally from a, from a tax perspective? 

DAMIEN MALONE: 

Yeah, I think if it’s if you’re getting distributions, it is classed, it is classed as income, unfortunately. So if you are at, depending on these, your, you know, your, your periodic pension payments to pay her and the phones, your lifestyle in Ireland. Yeah. You may be caught there. You may be caught there with dosh. Now we could check the treaty for you just to see if there is anything in that. That’s my initial, my initial thought on that one. 

DERREN JOSEPH: 

Yeah. So normally in the standard dropped of the treaty, they do say that pensions will be taxed in one country only. So, and so I guess the bottom line is that won’t be double-taxed, but chances are, you know.

DAMIEN MALONE: 

I know it will be dependent upon what you’re told about the taxable income in Ireland. So if this was your only taxable income and Ireland, it could be quite advantageous for you because it’s likely you will pay little or no tax. But if you did have an ordering come to another income of significance and it pushed, and it pushed the distributions you got from this into the top.

DERREN JOSEPH: 

10, it would be 

DAMIEN MALONE: 

That it will be more significant. Yeah. Yeah. 

DERREN JOSEPH: 

Okay. So the bottom line is we probably need, you need to sit with a tax professional because you want to know things like, for example, is it a Roth or which is after-tax income, which has been invested, is it a regular 401k, which is pre-tax, and then we’d need to look at the treaty as well as your dominant south status in Ireland. But generally speaking, these are the kinds of thoughts and conversations.

DAMIEN MALONE: 

Be. Yeah. Yep. 

DERREN JOSEPH: 

Gotcha. Okay. Next questions. So Deborah’s asking, I have Irish citizenship from my grandparents. I’m retired and I don’t plan to work. What taxes would I face in spending one in one engine in 83 days in Ireland? 

DAMIEN MALONE: 

So I assume by indicating to Deborah, that you have Irish citizenship and not your Irish domiciles. And unfortunately, if that’s the case, you’re it’s not a favorable outcome, or it’s not pretty, you will be liable to tax on your worldwide income and gains if you’re going to be resident on domiciled in Ireland, 

DERREN JOSEPH: 

Because you’re domiciled. 

DAMIEN MALONE: 

You’re done with the science. Yeah. Yeah, exactly. 

DERREN JOSEPH: 

Okay. Next question. This is from Declan and Brian. So what is generally considered the residential status of a married couple, where the husband is Irish wife is American. This is very specific, but, we read it anyway. I’m just saying it’s specific because we may not be able to answer it in this specific context, but we can speak generally about it. Right? So my couple husband, Irish wife, American kids born Indian us couple lived in the US for 20 years. And now everyone is in Ireland for five years with kids enrolled in school in Ireland. Right now they filed jointly, I guess the US can eat spouse have different domicile X despite having the same ordinary residents, and well, okay. There’s some, okay. That’s good. And what can an American wife do if she has American inheritance at this point? Any tax implications for the inheritance? 

DAMIEN MALONE: 

Yes. So why should we, let me just read this, let me just read this again. So, the wife is American and she’s lived in Ireland for five years. So she is five years resident. So I think then she could be caught for the American inheritance. Now we need to get to break down false bots into, in her sins, but of course, as well, we would, she would be entitled to, and she would be entitled to the trash holds and so forth that we have the exemption threshold. So depending on who am on, on her relationship with the, at the disposal, and like, if she’s, if she’s adult or she’ll have 330 odd K that she won’t have to pay tax on, assuming she got no water, it gives her in her. This is from that person before. So we’d need to have a look and see what she’s doing if she’s resident for five consecutive years. So if it’s the fifth year, she’s okay. But if it’s the sixth year, she would potentially then have exposure to Ireland in data, and we have to look and see, well, what is it she’s going to be inheriting. Who is she inheriting from unkind to do calculations and work it out? 

DERREN JOSEPH: 

And that’s because in a year 60 triggers some sort of deemed domicile, 

DAMIEN MALONE: 

Essentially, yes, it’s not classed as a deemed homicide. It’s just a different rule of where, if you’re a resident for five years and five years are for more than five years, I think it is your, your, your, your, your, your cost and your cost with dosh. So on the remittance, the remittance basis doesn’t apply in that scenario, the remittance basis doesn’t apply to capital acquisitions tax, which is that tax had debts. That’s relevant to this. 

DERREN JOSEPH: 

Okay. Gotcha. And just to, and from a US perspective, the estate is taxable, not the person, who’s the beneficiary, or who’s inheriting from the estate. There’s no tax on the person receiving it. It’s still in the estate. Just, throw that in following on. So again, Declan, Brian. So following on to the American wife, Irish husband, and dual citizens living in Ireland for five years claiming the foreign credit can any of us spend more than 30 days in a year without triggering IRS. So without triggering any us tax complications. So this is from, the U S perspective. So, I guess they refer to section nine 11 of the US tax code foreign earned income exclusion. So you can qualify for the foreign earned income exclusion in one of two ways. One does a bonafide residents test and the other is the physical presence test the physical presence stats. That’s easier to understand because it’s objective and it’s quantitative, and that’s a clear day’s task. So do not stay in the US for more than 30 days. Otherwise, you would lose the Foreign Income exclusion, if you will qualify for metaphysical presence. The other tests that bonafide residents test that is subjective and it’s qualitative. So it’s more or less like a test of intent. Where’s your heart, where’s your home. So if it is that you did qualify under that. And yes, you’re staying more than 30 days, but you’ve maintained that Ireland is still your home. You know, you still have your property there. That’s available for your use, you’re still paying taxes. Maybe you still have a job there. Then you would still be able to benefit from the Foreign Income exclusion from the US perspective, even though you cross the number of days. So it’s a test of fact and circumstances, and I suggest that you speak with your preferred us tax professional to, you know, just make sure that in terms of follow-up planning, that you don’t run a follow the rules and lose that importing benefit. So moving down, okay. Debra less. The last one, this is the last question, because we’re running out of time, right? So of the one 40. So this will be a few Damien’s. So the one 14-day or the 180 3-day threshold contiguous days, how do you view three months in three months out and stuff like that? 

DAMIEN MALONE: 

Yeah, I know. It’s just over the over-debt total year. So as I said, and generally what people or taxpayers do and have to watch their days on. like that having a red card usually on Xcel is as, is as handy as, as Annie, where you just track really. And you just track where you’re spending your days and just taught it up on Excel and down. So it’s not continuous. It’s, it’s, it’s the total, it’s the total. And it’s the total intercourse of a year of assessment over two years in the case of the lookback. So it Lopac is a hundred and you can do 140. And in each book, you can do 160 and 110, and you’re still not going to get caught with that. So I suppose it might not be best to just be fixated on the 140 if you do have a bit of leeway with that, if you’re going to be out and for more and more near done in order as well, it’s just not there, there is another trigger point to determine in your residence position as well. It’s not just 183 days into the current. So an Excel spreadsheet, essentially just to keep track and record all that is the type of evidence that will be required supported by airline flights are both tickets and as well if it came to us and you if you have to substantiate your movements. 

DERREN JOSEPH: 

Gotcha. Gotcha. And I guess that probably a rose, because when Emma was speaking from an immigration point of view to some extent, the clock does reset, but from a tax perspective, it doesn’t put it for a year. So I guess that may be where the confusion arises, but thank you very much, Damien and Emma, for a fantastic overview and answering, not answering questions, but pointing people in the right direction in terms of the questions and concerns that they may have. Now, if someone wanted to reach you, Emma, Emma, what’s the best way to find you. 

EMMA RICHMOND: 

And if they connect on LinkedIn and send me a message, that’s probably the easiest, or email at emma.richmond@whitneymoore.ie

DERREN JOSEPH: 

So, Emma, that’s two M’s emma.richmond@whitneymoore.ie

Fantastic. And Damien, what’s the best way to find you? 

DAMIEN MALONE: 

I and be delighted for it to get any connections through LinkedIn and by email, of course, as well, if there are any follow-up queries, more than happy to, and answer Damien Malone accountants thought I would get through to me.

DERREN JOSEPH: 

damien@maloneaccountant.ie  or Damien Malone on LinkedIn. Thank you very much. Have a very good evening day, depending on where you are. See you next time. Bye-bye 

EMMA RICHMOND: 

Thank you. Bye. 

OUTRO: 

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