COVID-19: global mobility and employment tax supporting measures in Ireland for 2021
Some of the concessions introduced by the Irish tax authorities (Revenue) to support employers and employees deal with the impacts of Covid-19 ended on 31 December 2020. The concessions covered a range of employment tax and global mobility tax reliefs and exemptions and extensions to certain filing deadlines for employers. Other concessions continue in 2021, some are expected to apply for the duration of the Covid-19 pandemic, therefore the end date is not known.
Benefit in Kind (BIK)
Due to health and safety concerns arising from Covid-19, an employer may perform Covid-19 testing on an employee at the workplace, or may engage a third party to do such testing on behalf of the employer. In such circumstances, no benefit-in-kind charge will arise. In addition, where an employer provides a COVID-19 test kit to an employee for self-administration, no benefit-in-kind charge will arise. There is no specific end date for this measure.
Costs of assisting employees returning to the State including payment of holiday/flight cancellations
If an employee is integral to the business and was required to return to Ireland to deal with issues related to the Covid-19 pandemic by his or her employer, and if the costs incurred are reasonable and the employee is not otherwise compensated (i.e. via an insurance policy or direct claim to the service provider), a benefit in kind will not arise. This may include costs related to family members who were on holiday or due to go on holidays with the employee.
This concessionary measure ceased to apply on 31 December 2020. Since 1 January 2021, the provisions relating to costs of non-business travel will apply in the usual manner.
Employer Provided Accommodation
Where accommodation is made available by an employer to an employee for his or her private use a benefit-in-kind charge generally arises. Due to health and safety concerns arising from Covid-19, an employee may be provided with temporary accommodation by his or her employer to mitigate against potential transmission risks. No benefit-in-kind charge will arise during the period of the Covid-19 crisis if;
- the accommodation made available to an employee by his or her employer is temporary in nature and the reason is to mitigate against the risk of transmission.
Trans-Border Workers Relief
If employees are required to work from home in Ireland due to Covid-19, such days spent working at home will not preclude an individual from being entitled to claim this relief, provided all other conditions of the relief are met.
This concessionary measure will continue to apply for the tax year 2021 where:
Residence rules - Force Majeure circumstances
Where an individual is prevented from leaving Ireland on his or her intended day of departure due to extraordinary natural occurrences or an exceptional third party failure or action, none of which could reasonably have been foreseen and avoided, the individual will not be regarded as being present in the State for tax residence purposes for the day after the intended day of departure provided the individual is unavoidably present in the State on that day due only to ‘force majeure’ circumstances.
On 23 March 2020 Revenue confirmed that where a departure from the State is prevented due to Covid-19, Revenue will consider this ‘force majeure’ for the purpose of establishing an individual's tax residence position. An individual who had a planned departure from the State that was prevented due to any of the reasons specifically listed by Revenue in their guidance and provided other conditions are satisfied will be considered to have their departure prevented due to Covid-19.
Where the individual did not leave Ireland on or by 1 June 2020 ‘force majeure’ will not apply to any of the days. However, there may be special treatment afforded where the individual was prevented from leaving on or by 1 June 2020 due to health issues.
The ‘force majeure’ concession requires the occurrence must not “reasonably have been foreseen and avoided”, therefore individuals who travelled to Ireland on or after 6 May 2020 will not be regarded by Revenue as having their departure from the State prevented due to Covid-19 under force majeure circumstances.
A foreign employer could operate Irish payroll on the basis of a non-resident employee’s established work pattern pre-Covid-19 where certain conditions were satisfied. This concessionary measure ceased to apply on 31 December 2020.
Since 1 January 2021 employers are required to operate PAYE on such employments in the usual manner. This is subject to any exceptions available under Irish law and guidance.
Reporting deadlines and clearance applications
Share schemes filing obligations
The filing deadline for all 2019 share scheme returns was extended from 31 March 2020 to 30 June 2020. The filing deadline for the 2019 ESS1 - Return of Information by the Trustee of an Approved Profit Sharing Scheme was 31 October 2020.
No similar extension was introduced for 2021, therefore the filing deadline for all 2020 share scheme returns was 31 March 2021.
Special Assignee Relief Programme (SARP)
The 90-day employer filing obligation, which is a requirement for an employee to be eligible to benefit from SARP relief, was extended for a further 60 days, or for a longer period, if exceptional cases was submitted to Revenue for consideration.
This concessionary measure ceased to apply on 31 December 2020. Since 1 January 2021 all SARP 1A forms must be filed within the 90-day timeframe in the usual manner.
PAYE Dispensation Applications
Revenue did not strictly enforce the 30-day notification requirement for PAYE dispensations applicable to short term business travellers from countries with which Ireland has a double taxation treaty who are going to spend in excess of 60 workdays in the State in a tax year.
This concessionary measure ceased to apply on 31 December 2020. Since 1 January 2021 the normal 30-day notification timeframe applies. Exceptional cases may be notified to Revenue as required.
Other employment tax reliefs
A number of other employment tax measures are available to assist employers and employees deal with the impacts of Covid-19, these include: