The Revenue Commissioners (“Revenue”) first introduced the Special Assignee Relief Programme (SARP) in 2012 as a method for encouraging companies to relocate or assign their key employees to work in Ireland. Where certain conditions are satisfied, 30 percent of taxable employment income over €100,000 is disregarded for income tax purposes. This programme can result in significant tax savings for key employees.
On 10 June 2022, Revenue released updated guidance on SARP. The update included clarifications on a number of practical issues that employers have encountered when determining the eligibility of employees for SARP relief. Our SARP bulletin discusses these previous changes in detail.
At the end of last year, Finance Act 2022 extended SARP—which was set to expire for new entrants on 31 December 2022—to 2025 while also introducing additional requirements.
1. Extension of Relief
Although previously set to expire on 31 December 2022 for any new entrants, Finance Act 2022 extended the relief until 31 December 2025. Any qualifying employees who arrive in the state before this date may avail of SARP for a maximum of five years.
2. Increase in Minimum Salary
Before 1 January 2023, an individual had to earn a minimum basic salary of €75,000 per annum in order to claim SARP. All benefits and bonuses are excluded when determining the basic salary. Finance Act 2022 changed this basic salary requirement, increasing the income threshold requirement to €100,000. The €100,000 threshold applies to any new SARP claims from 2023. These changes do not affect any existing SARP claimants, who can still apply the €75,000 threshold.
3. Presence in Ireland in the Six-month Period Prior to Date of Arrival
To qualify as a relevant employee, an individual must be a full-time employee of a relevant employer and exercise the duties of employment for said employer outside the State for the whole of the six months immediately before arrival.
If an individual comes to Ireland prior to arrival, SARP may no longer be applicable. Revenue has outlined specific scenarios in which they will allow the individual to visit the state without it affecting the SARP claim.
Note: the performance of the duties of a non-Irish employment in the state may result in a PAYE withholding requirement for the relevant employer.
Finance Act 2022 brought in some additional conditions that were not previously required.
The following conditions are now required to qualify for SARP.
An individual must satisfy a number of requirements to be eligible to claim SARP. Without a comprehensive understanding of these requirements, eligible candidates may miss their opportunity to claim relief; alternatively, they may find that the nature of their contract or actions taken before arriving in Ireland have jeopardised their ability to claim relief. Therefore, seeking advice and guidance about SARP prior to arriving in the state is extremely important.
Grant Thornton has identified a number of clients who are eligible for SARP. We have helped them claim the relief and obtain a substantial amount of tax savings. If you think that you or an employee may be eligible for SARP, contact our team today.
Our global mobility team have extensive experience and deep subject-matter expertise in helping clients seek and access SARP.
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