What is the Special Assignee Relief Programme (SARP) 

 SARP is a provision  for income tax relief for individuals assigned during any of the tax years 2012, 2013 or 2014 to work in the State.

SARP provides for income tax relief on a proportion of income earned by employees who are assigned by their relevant employer to work in the State for that employer (or for an associated company of that relevant employer) and who previously worked for that relevant employer for a minimum period of 12 months in a country with which the State has a double taxation agreement or has a tax information exchange agreement.

 Where certain conditions are satisfied, an employee can make a claim to have 30% of his or her income between €75,000 (lower threshold) and €500,000 (upper threshold) disregarded for income tax purposes. However, such disregarded income for income tax purposes is not exempt from the Universal Social Charge (USC).

 Under the SARP program 30% of basic salary (to a maximum of €127,500) is excluded from the charge to Income Tax for employees who take up full time employment inIreland.    The relief can be claimed for a maximum period of five consecutive years and only applies in the case of employees who come to the State in 2012, 2013, or 2014.

 Conditions for the relief:

 The relief can be claimed by an individual who:

• arrives in the State in any of the tax years 2012, 2013 or 2014, at the request of his or her relevant employer to perform in the State the duties of his or her employment for that employer or to take up employment in the State with an associated company of that relevant employer; Note: The company that assigns the employee must be tax resident in a country with which the State has a double taxation agreement or a tax information exchange agreement.
• immediately before being assigned to work in the State, worked outside the State for a minimum period of 12 months for the relevant employer who assigned him or her to work in the State;
• immediately before his or her arrival in the State to take up employment here, was not tax resident in the State for the previous 5 tax years;
• after taking up residence in the State, works here for a minimum period of 12 months for the relevant employer who assigned him or her or for an associated company of that employer;  Note: In determining whether the duties of an employment are performed in the State, any incidental duties performed outside the state that relate to the employment can be ignored.
• for all tax years for which the relief is claimed, is tax resident in the State and not, in the same tax year, tax resident elsewhere;
• earns a minimum basic salary of €75,000 per annum excluding all bonuses, benefits or share based remuneration.

There is no condition as to domicile. Accordingly, Irish citizens may avail of the relief providing all other conditions are fulfilled.  Where under its domestic tax legislation, a jurisdiction imposes taxation based on citizenship rather than on residence (i.e. where that jurisdiction does not have a concept in its domestic tax legislation of an individual being resident for tax purposes), then a citizen of that jurisdiction may claim relief under SARP provided that, for the relevant tax year, he or she is tax resident in the State (subject, of course, to other SARP conditions being satisfied).

An Employer will also be able to bear the cost of certain items for a relevant employee on a tax free basis to include the cost of a return trip for the employee and family to an overseas country to which they are connected plus primary and or post primary school fees up to €5,000 per annum per child where the school is approved by the Minister of Education.

The SARP return is available on the Revenue website and requests:

• details of the Employer and Employee registration numbers
• employee name
• amount of income, profits or gains in respect of which no tax was deducted
• costs associated with an annual return trip to the country of residence or nationality for self and/or family
• costs of school fees for children paid to an approved school in the state
• increase in number of employees as a result of the operation of the relief or number of employees retained by the company as a result of      the operation of the relief

  If you would like more information  please contact us on 01 6012600 and we will discuss any queries you may have regarding this bulletin or any other areas of interest.