Tax Resident in Ireland

Panic Stations

Something I've always wondered about is how so many wealthy business people avoid paying income tax in Ireland. I've known a few myself that did it and could never wrap my head around how they did it.

According to CitizensInformation.ie a tax resident of Ireland is the following;

You are resident for tax purposes for a year if: You spend 183 days or more in Ireland in that year from 1 January – 31 December or, If you spend 280 days or more in Ireland over a period of two consecutive tax years, you will be regarded as resident for the second tax year.

Revenue classify a day as;

"Usually a day means any part of a day. In some circumstances, if you spend part of a day in Ireland it will not be included in your total days present in Ireland".

If you resided in say Donegal but only spend 182 "days" there and the rest of the time in Belfast would that then make you tax exempt given that Belfast technically belongs to the UK tax system.

Do you need to plan your days out and inform revenue that you will not be a tax resident or do you add them up at the end of year and then can claw back your tax?

Surely they also look for proof that you've been out of the country for X amount of days?

Jerry Attrick

Panic Stations wrote: »

Something I've always wondered about is how so many wealthy business people avoid paying income tax in Ireland. I've known a few myself that did it and could never wrap my head around how they did it.

Do you need to plan your days out and inform revenue that you will not be a tax resident or do you add them up at the end of year and then can claw back your tax?

Surely they also look for proof that you've been out of the country for X amount of days?

You simply tick the relevant boxes on the Form 11 (and provide the additional details required) and it's then up to Revenue to decide whether they want you to to provide supporting evidence, if they decide to investigate you.

Revenue's policy (summarised below) is that they trust taxpayers to tell the truth on their tax returns, but if they investigate someone and it turns out that they haven't been honest, they throw the book at them - fines, penalties, interest and possibly a criminal prosecution.

"Presumption of honesty

You can expect: to be treated as honest in your dealings with Revenue unless there is clear reason to believe otherwise and subject to Revenue's responsibility for ensuring compliance with tax and customs law.

We expect you: to deal in an honest way with Revenue by returning the tax and duty which you are due to pay and seeking only those entitlements and tax credits to which you are due.

Panic Stations

Jerry Attrick wrote: »

You simply tick the relevant boxes on the Form 11 (and provide the additional details required) and it's then up to Revenue to seek whatever supporting evidence they require, if they decide to investigate you.

Revenue's policy (summarised below) is that they trust taxpayers to tell the truth on their tax returns, but if they investigate someone and it turns out that they haven't been honest, they throw the book at them - fines, penalties, interest and possibly a criminal prosecution.

It would be interesting to see how many people actually do this every year. Anyone have any ideas of figures?

Geuze

Panic Stations wrote: »

It would be interesting to see how many people actually do this every year. Anyone have any ideas of figures?

https://www.revenue.ie/en/corporate/information-about-revenue/statistics/index.aspx

There might be something here.

homingbird

At the moment there is no border between north & south ireland to stamp your passport so how do they know how many days you spend in either country.

It also leaves it open to living in spain & return via belfast.

Jerry Attrick

homingbird wrote: »

At the moment there is no border between north & south ireland to stamp your passport so how do they know how many days you spend in either country.

It also leaves it open to living in spain & return via belfast.

As mentioned above, it's up to the taxpayer to tell the truth.

They would also have to show that they were paying taxes in the country where they claimed to be residing for the other 180+ days. And revenue can check this. But if they were investigated, then presumably the onus would be on them to prove that they were out of the country, not on Revenue to prove that they weren't! If they couldn't prove it, then they'd probably be in trouble.

homingbird

Is it possible to open a bank account in another country just living in a rented property.

ulster

Panic Stations wrote: »

It would be interesting to see how many people actually do this every year. Anyone have any ideas of figures?

Are you, perchance, a Revenue cyber trooper?

Panic Stations

ulster wrote: »

Are you, perchance, a Revenue cyber trooper?

Revenue have upped their game if that's the case. I've actually heard that they do keep an eye on these types of forums too.

DmanDmythDledge

I know for a fact there's Revenue employees who regularly browse and post on here.

Panic Stations

Panic Stations wrote: »

Something I've always wondered about is how so many wealthy business people avoid paying income tax in Ireland. I've known a few myself that did it and could never wrap my head around how they did it.

According to CitizensInformation.ie a tax resident of Ireland is the following;

You are resident for tax purposes for a year if: You spend 183 days or more in Ireland in that year from 1 January – 31 December or, If you spend 280 days or more in Ireland over a period of two consecutive tax years, you will be regarded as resident for the second tax year.

Revenue classify a day as;

"Usually a day means any part of a day. In some circumstances, if you spend part of a day in Ireland it will not be included in your total days present in Ireland".

If you resided in say Donegal but only spend 182 "days" there and the rest of the time in Belfast would that then make you tax exempt given that Belfast technically belongs to the UK tax system.

Do you need to plan your days out and inform revenue that you will not be a tax resident or do you add them up at the end of year and then can claw back your tax?

Surely they also look for proof that you've been out of the country for X amount of days?

Asking for a friend by the way.