Dáil Éireann Debate, Tuesday - 23 November 2021
252. Deputy Ivana Bacik asked the Minister for Finance if a tenant (details supplied) whose landlord is not resident in Ireland must pay tax on their rent directly to the Revenue Commissioners; and if this regulation is enforced in circumstances in which tenants live in properties which are let on a third-party platform such as a company (details supplied). [57479/21]
View answerAs no specific details were provided in respect of the tenant, the reply to the Question put by the Deputy is based on the generality of the provisions relating to non-resident landlords.
Section 18 Taxes Consolidation Act 1997 (TCA) provides that rental income earned by both Irish resident and non-Irish resident companies and individuals from a property situated in the State is taxable under what is known as Case V of Schedule D.
Where rents are paid directly by a tenant to a person whose usual place of abode is outside the State, the tenant is obliged to deduct income tax at the standard rate from the payment (sections 238(2) and 1041 TCA). The standard rate of income tax is currently 20%. The non-resident landlord can claim credit for the tax withheld by the tenant when declaring the income on a tax return.
If a tenant is paying rent to an Irish collection agent of a non-resident landlord, rather than directly to the landlord, the tenant is not obliged or entitled to deduct income tax from the rent. However, the landlord is assessable and chargeable to income tax in the name of the Irish collection agent (section 1034 TCA).
The third-party platform mentioned by the Deputy is normally used for short-term holiday lettings, and income from such lettings is not taxed under Schedule D Case V. If the person who owns the property is regularly letting it out for short-term lettings, the income is treated as trading income (Schedule D Case I) and does not come under the withholding tax regime mentioned above in sections 238(2) and 1041 TCA.
Revenue receives details of payments made via third-party platforms by virtue of section 888 TCA.
