article banner

Practical guide for principal contractors to avoid RCT pitfalls

Aside from determining when a particular assignment or project is within the scope of Relevant Contracts Tax (RCT), perhaps the most challenging aspect of RCT is the administrative demands its operation places on principal contractors (“principals”). Given the heightened Revenue activity in this area, it is opportune to reconsider this complex tax.

For RCT to apply, a principal must engage a sub-contractor to carry out “relevant operations” under a “relevant contract”. The intricacies of what constitutes relevant operations and relevant contracts are outside the ambit of this article, and the focus here
is the onerous obligations placed on those who fall within the scope of a principal.

There are many administrative steps for principals to take to ensure that they are fully compliant when operating RCT on payments to sub-contractors:

  • register for RCT on Revenue’s Online Service (ROS),;
  • notify Revenue of each contract (Contract Notification);
  • create a Site Identifier Number;
  • notify Revenue of the payment to be made to a sub-contractor (Payment Notification);
  • await issuance of a Deduction Authorisation by Revenue;
  • provide a copy of the Payment Notification Acknowledgement to the sub-contractor; and 
  • await receipt of the Deduction Summary at the end of each month and carefully review this Summary to ensure accuracy.

See our document for a detailed descriptions of these steps follow, with particular
emphasis on how to avoid falling foul of the regime.


This article first appeared in Irish Tax Review, Vol. 29 No. 3 (2016) © Irish Tax Institute