Dáil Éireann debate -
Tuesday, 6 Mar 2001

Vol. 532 No. 1

Written Answers. - Tax Liability.

Minister for Finance (Mr. McCreevy):

The person referred to by the Deputy is living abroad and renting property in the State. In cases where rent is paid directly to an individual whose usual place of abode is outside the State, the tenant is obliged to deduct tax at the standard rate, currently 22%, from the payment in accordance with section 1041, Taxes Consolidation Act, 1997. Payment into a bank account in the name of the landlord is regarded as a payment made directly to the landlord. The tenant provides the non-resident landlord with a certificate in respect of the tax deducted. This certificate is provided on form R185.

Section 1041 of the Taxes Consolidation Act, 1997, also provides that the non-resident landlord is entitled to the expenses that are usually allowed in arriving at a rental profit, for example, cost of maintenance, repairs, insurance. The individual may also be entitled to a portion of personal tax credits. These expenses and tax credits are granted on due claim being made. The tax deducted by the tenant is credited against any tax due by the non-resident landlord.

The non-resident landlord is a chargeable person. Accordingly, the obligations in relation to the filing of an annual return and the payment of preliminary tax apply. The relevant dates, including the revised dates following the change to the calendar year basis, are set out in the appendix. Where rent is paid through an agent to an individual whose usual place of abode is outside the State, the tenant must not deduct tax on payment of the rent to the agent. Instead, the agent is chargeable to income tax in respect of the rent in the same manner as the non-resident landlord would be assessed in his/her own right, that is, after deducting from the rent any allowable expenses and after the granting of the personal tax credits to which the non-resident is entitled.

Appendix

Event	Existing System	New System
	Date	Interval-Date-Interval
PayPreliminaryTax	1 November(in year ofassessment)	7 Months(from start of year ofassessment)31 October(in year of assessment)10 Months(from start of year ofassessment)
File Return	31 January(in followingyear ofassessment)	10 Months(from end of year ofassessment)31 October (in following year ofassessment)10 Months(from end of year ofassessment)
PayBalance ofTax	30 April(in yearfollowing thereturnfiling date)	13 Months(from end of year ofassessment)31 October(the same day as thereturn filing date)10 Months(from end of year ofassessment)