SARP ' 2023 Update

• Law Firm: Matheson
• Subject Matter: Finance and Banking, Tax, Financial Services, Income Tax, Tax Authorities
• Author: Mr Barry McGettrick and Pearse Walsh
• Published date: 07 March 2023

The Special Assignee Relief Programme ("SARP") was introduced in 2012 to provide a targeted income tax relief for eligible employees assigned to work in Ireland by their employer companies. The relief operates by exempting 30% of a qualifying employee's annual employment income above a qualifying income threshold from the charge to income tax (subject to an earnings cap of '1m) for a period of 5 years. Employees who qualify for SARP are also eligible to receive on a tax-free basis certain travel expenses and certain costs associated with the education of their children in Ireland. In this way, the availability of SARP can be a decisive factor in the decision of highly skilled senior executives to relocate to Ireland.

Relief Extended to 2025

SARP was due to expire for new entrants on 31 December 2022. However, Finance Act 2022 has extended the relief for a further three years to 31 December 2025, thereby permitting qualifying employees who arrive in Ireland in each of years 2023 to 2025 to benefit from SARP.

Changes to Existing Qualifying Conditions for 2023 Onwards

Prior to 1 January 2023, an individual had to earn a minimum basic salary of '75,000 per annum (excluding all bonuses, benefits or share based remuneration) in order to be eligible for SARP. The income threshold in order to be eligible to avail of SARP has been increased from '75,000 to '100,000 for individuals who arrive in Ireland in the years 2023 to 2025. Existing claimants are not affected by the change. In the case of new entrants arriving in Ireland from 1 January 2023 onwards, the portion of their employment income which is eligible for relief is 30% of their annual employment income above '100,000 (whereas qualifying employees who arrived in Ireland prior to 1 January 2023 have their relief calculated as 30% of their annual employment income above '75,000).

New Qualifying Conditions for 2023 Onwards

Finance Act 2022 adds some additional requirements to qualify for SARP with effect from 1 January 2023; namely that:

• the individual must obtain a PPS number;
• the employer company must certify compliance with this condition (ie, that a PPS number has been obtained) to Irish Revenue within 90 days of the individual's arrival in Ireland and
• the employer company must have complied with the normal PAYE employee commencement regulations (ie, to send various particulars concerning the employee to Irish Revenue at the commencement of the employment to enable the registration of the employment for...