Dáil Éireann Debate, Tuesday - 4 July 2023
230. Deputy Ged Nash asked the Minister for Finance to outline the public policy rationale for the changes made in the Finance Act 2022 in relation to the obligations of tenants and collection agents of non-resident landlords; if he will provide details on the number of non-resident landlords recorded by the Revenue Commissioners in 2020, 2021 and 2022; and if he will make a statement on the matter. [32433/23]
View answerI am advised by Revenue that the changes made in Finance Act 2022 to the obligations of tenants and collection agents of non-resident landlords are intended to reduce the administrative burden on both tenants and collection agents and to simplify the process to comply with their tax obligations. It is also anticipated that the new system, which launched on 1 July 2023, should lead to better compliance and customer service in this area. The information provided as part of the new requirements will allow Revenue to identify the non-Irish resident landlord and correctly allocate a withholding tax payment to the relevant landlord. The information will also assist Revenue in pursuing any issue of non-compliance.
Tenants (and other parties such as local authorities) who make rental payments directly to non-resident landlords have been obliged for many years to deduct and remit to Revenue withholding tax at 20% from such payments. Finance Act 2022 made minor amendments to this existing system. Previously, such persons were required to remit the amount due to Revenue using a paper Form R185. The changes introduced by Finance Act 2022 did not alter the requirement for such persons to deduct tax.
They do, however, change the method by which the tax deducted is remitted to Revenue. They also require the provision of certain information regarding the landlord, the rental property, and the rental payment. As part of this new system, instead of completing a paper Form R185, tenants of non-resident landlords will complete rental notifications (‘RNs’) and remit the tax deducted online using ROS or MyAccount, using the new “non-resident landlord withholding tax” (NLWT) system.
As well as changes to the requirements for payments made directly to non-resident landlords, Finance Act 2022 also amended the requirements for collection agents acting for such landlords. A collection agent for a non-resident person is assessable and chargeable to tax for the income of that person, which means the agent is required to file a tax return and pay the tax due on that income. It is still open to collection agents to continue to follow that practice, which means they must file a tax return and pay relevant liabilities, including preliminary tax. However, the new provisions give them an alternative. A collection agent will not be chargeable and assessable for such income, provided that the agent deducts and remits to Revenue withholding tax (also at 20%) from rental payments and provides information on the landlord and the tenancy. Collection agents will also complete the new RN and remit the withholding tax online.
Revenue records indicate that in 2020, there were approximately 18,766 non-resident landlords, of which 213 were corporate landlords, and during 2021, there were approximately 20,974 non-resident landlords, of which 251 were corporate landlords. I am advised that figures for 2022 are not yet available.
