The Relevant Contracts Tax (RCT) system is a tax deduction at source system that is applied by a principal contractor on payments due to a subcontractor under a relevant contract. All payments are reported to Revenue, and in a minority of cases (based on risk criteria), a percentage of the payment due is withheld and paid over to Revenue, to be offset against the subcontractor's liability for income tax, VAT and other taxes.
The tax that is collected under the electronic RCT system in any year is first and foremost offset against any unpaid tax liabilities the subcontractor may have. Thereafter, it is available for offset against tax as it falls due. Only where the tax deducted under the RCT system exceeds the subcontractor's tax liability for the year is the 'excess' tax deducted repaid by Revenue.
I am informed by the Revenue Commissioners that the gross Relevant Contracts Tax (RCT) collected in 2014 was €200.8 million. €122.4 million was offset against tax liabilities for 2014 or earlier years and €47.4 million was repaid. €31 million remains available for offset against subcontractors' tax liabilities (or for repayment where tax liability is exceeded) and will remain so for a period of four years.