Key HighlightsSARP overview
SARP relief exempts 30 percent of qualifying income, profits, and gains of an employment from Irish income tax. Only qualifying employment income between the relevant annual threshold and €1 million in a tax year is available for relief. The relevant annual threshold varies depending upon the tax year of arrival to Ireland:
€75,000 for arrivals up to 31 December 2022;€100,000 for arrivals between 1 January 2023 and 31 December 2025;€125,000 for arrivals between 1 January 2026 and 31 December 2030.
The relief, available for up to five consecutive tax years from the first year of claim, can apply to an employee of a foreign company working in Ireland as well as a group employee who transfers his or her foreign employment to an associated Irish company. A number of conditions need to be met by both the employee and employer in order for SARP relief to apply.
SARP relief can be delivered through payroll by agreement with Irish Revenue or by filing a personal tax return claim after the tax year end.
While SARP relief takes the form of a deduction from relevant employment income, in practice, this has the effect of reducing the marginal Irish income tax rate on qualifying employment income from 40 percent to 28 percent. No relief is given for the Universal Social Charge (USC) taxes, nor any relief for Irish social security (PRSI) purposes, if liable to Irish social taxes.
The employee must be Irish tax resident to claim and for each year of claim, must file a Form 11 (personal income tax return) by the following 31 October (unless Irish Revenue has provided a short general extension to the filing deadline, typically no more than two weeks).
Employer e-filing facility for Annual Employer SARP returns
Since 1 January 2024, the Annual Employer SARP return is expected to be submitted electronically through the e-SARP facility on the Revenue Online Services (ROS) website. This portal is linked to the employer registration for tax and payroll purposes.
The Annual Employer SARP return must provide details of all employees eligible for SARP relief for the tax year applicable to that employer payroll reference number. This means the employees to be reported may include group employees who have transferred their employment to that employing entity or, those on assignment to Ireland for a temporary period. Details to be reported include:
the employee’s PPS Number, nationality, job title and prior country of residence;the total remuneration paid during the year and taxed through the Irish payroll (PAYE) regime;the extent of SARP relief awarded through the PAYE regime;details of any school fees or home leave trips paid or reimbursed tax-free due to SARP relief; andconfirmation of any employees who are tax equalised or who ceased their role during the tax year.
The employer is also expected to include details of the additional number of employees recruited in Ireland by that company due to the availability of SARP relief.