Irish tax residence, ordinary tax residence and domicile status

The criteria used to determine an individual’s liability to Irish tax are his residence, ordinary residence and domicile status.

Are you a Resident?

NoYes

Are you an Ordinary Resident?

NoYes

Are you domiciled in Ireland?

NoYes

Residence
An individual is treated as being resident in Ireland if, in the tax year from 1 January to 31 December, an individual:
• Is physically present in Ireland for 183
days or more or
• Spends a combined total of 280 days or
more in Ireland in both the current and preceding tax years, provided that they will not be treated as resident under this test for any tax year during which 30 days or less are spent in Ireland.
A day is counted if the individual is present in Ireland for any part of a day. The purpose of their presence is irrelevant.

Ordinary Residence
An individual is regarded as ordinarily resident in Ireland for a tax year if they have been an Irish resident for each of the three preceding tax years. Once they become ordinarily resident in Ireland, they do not cease to be ordinarily resident for a tax year unless they have been non-resident in Ireland for each of the preceding three tax years.

Domicile
This term is not defined in the Irish tax code. It is a complex term and is primarily a question of fact, based on the notion of an individual’s permanent home to which that person intends ultimately to return. A person can be considered domiciled in the country which is the individual’s permanent home although they are temporarily resident in another country.
An individual can never be without domicile. Generally, an individual is domiciled in the country of nationality and in which the greater part of the person’s life is spent (i.e. the domicile of origin). Once an individual has reached the age majority, ‘domicile of origin’ can be abandoned and a ‘domicile of choice’ can be acquired. In this situation, factors of presence and intention would be required.

Remittance Basis of Taxation
Non-Irish domiciled individuals who are Irish tax resident for a year of assessment will be liable to Irish income tax on Irish source income and on foreign income to the extent that the funds are remitted to Ireland. This is known as the Remittance Basis of Taxation.

It is an accepted tax principle that a remittance of income is liable to income tax but a remittance of capital is not liable to income tax (but may be liable to a capital tax). The income versus capital argument, in the context of the remittance basis of assessment, generally arises on the issue of whether a remittance is one of income or capital to determine whether or not such remittance is chargeable to income tax.

This means that remuneration derived from a non-Irish employment to the extent that duties of the employment are performed outside of Ireland and non-Irish investment income and gains may potentially fall outside of the Irish charge to tax.t is an accepted tax principle that a remittance of income is liable to income tax but a remittance of capital is not liable to income tax (but may be liable to a capital tax). The income versus capital argument, in the context of the remittance basis of assessment, generally arises on the issue of whether a remittance is one of income or capital to determine whether or not such remittance is chargeable to income tax.

PAYE Exclusion Order
Non-resident employees of Irish ‘private sector’ employers
Where an individual is in receipt of Irish source ‘private sector’ employment income
and where the individual –

• is not resident in the State for tax purposes for the relevant tax year,
  and
• exercises the duties of the employment wholly outside the State,
  a PAYE Exclusion Order may be issued for the relevant tax year. In general,
  individuals will have to be absent from the State for a complete income tax year or
  for a sufficient period over two income tax years to ‘break’ Irish residence to qualify
  for a PAYE Exclusion Order.

In determining where the duties of the employment are exercised, incidental duties
performed in the State may be ignored. ‘Incidental’ in this context means fewer than
30 days working here over a full tax year.