Global Mobility Services

Special Assignee Relief Programme (SARP) – 2022 updates

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SARP was first introduced in 2012 to encourage the relocation/assignment of key employees to Ireland. Where certain conditions are satisfied, 30% of taxable employment income over €75,000 will be disregarded for income tax purposes.
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On 10 June 2022, Revenue released updated guidance on SARP relief. The updates include clarifications on a number of practical issues that employers have encountered when determining the eligibility of employees for SARP relief. Overall, the updated guidance is very much to be welcomed, however employers will have concerns on Revenue’s view of the requirement to perform duties in Ireland in each of the twelve consecutive months following the employee’s arrival into Ireland, particularly in the context of holidays and hybrid working arrangements.  A summary of the key updates to Revenue’s guidance is set out below.

Eligibility for SARP relief where time spent in the State in the six months prior to arrival

To avail of SARP relief an individual must in the six-month period prior to arrival:

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Revenue have clarified that they apply these conditions as follows:

  1. Full-time employee of a “relevant employer” requirement
  • An individual who takes up employment with an associated company in the State prior to arrival will not qualify as a “relevant employee” for SARP purposes.
  • The performance of up to 5 working days outside the State for an associated company in the State may however be permitted in this six-month period where an individual intends to take up employment with an associated company in the State, but is prevented from travelling to the State to commence duties due to unforeseen circumstances (e.g. delays with the issue of an employment permit).
  1. Exercise of duties for relevant employer outside the State

Personal purposes

A holiday or look-see visit in the six-month period before arrival will not prevent the individual from qualifying as a relevant employee, assuming all other conditions are satisfied.

Work purposes

The pre-arrival performance of employment duties in the State will not prevent relief applying where:

  • the duties are performed under a foreign employment contract for a relevant employer; and
  • the performance of duties in the State does not exceed 5 working days in total in the six-month period.

Requirement to perform the duties of employment in the State for twelve consecutive months

To qualify for SARP, an individual must perform their duties in the State for the relevant employer/associated company for a minimum of twelve consecutive months from the date those duties were first performed in the State.

A significant update in Revenue’s guidance restricts the availability of relief where an individual does not perform duties in Ireland in each of the twelve consecutive months following his/her arrival into Ireland.

Revenue provide an example where a “relevant employee” arrives in Ireland in January 2022 but spends all of the month of August outside of Ireland (on holidays and then working remotely in his home country i.e. the UK).  Revenue’s view is that this results in the individual becoming ineligible for SARP.

Administrative requirements

The following administrative requirements must be satisfied to enable Revenue to issue confirmation of SARP relief.

  1. Employees supply a PPSN on the Form SARP 1A within 90 days of arrival in the State; and
  2. The employment must be registered with Revenue.

Revenue have acknowledged the difficulties that can arise in obtaining and supplying a PPSN and have clarified that where the conditions of SARP are met, the absence or the delay in processing of a PPSN will not impact on whether an employee is eligible for relief. However, approval for SARP will not issue until the PPSN is provided to Revenue.

Revenue also notes the importance of registering the employment as soon as possible to get the benefit of SARP. However, they have clarified that where the conditions of SARP are met, the delay in registering the employment will not, in itself, impact on whether an employee is eligible for relief. Approval for SARP will not issue, however, until the employment is registered.

How Grant Thornton can help?

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Contacts

For further information on SARP please contact a member of our team.