Tax & Tax Refunds for UCD Employees

1. Tax & Tax Refunds for UCD Employees

2. Barry Flanagan • Senior Tax Manager • Taxback.com

3. Agenda • Income Tax in Ireland • Who is liable to tax in Ireland? • Residency and Non-Residency Status • Split Year Relief • Flat Rate Expenses • Do I have to File a Return? • Tax Relief of Medical Insurance • Rent Tax Credit • Tuition Expenses • Year of Marriage Tax Credit • Worked in other countries? • Taxback.com, Our services, Our Fees & Benefits

4. Agenda - Summary • Am I taxable in Ireland? • What am I taxable on? • How much tax is due? • What are the most common reliefs? • How do I pay the tax due?

5. Who is liable to Income Tax in Ireland? • Resident and Domicile – Taxable on worldwide income • Irish Resident, Non Dom – Irish and remitted income • Non Resident - Tax is always due on Irish source income • Rent arising in a foreign location is potentially taxable here too

6. Income Tax in Ireland • There is no tax-free allowance in Ireland; you are taxable on every penny you earn • All income is taxable unless a specific exemption exists • Tax credits (personal credit €1,650) can be used to reduce your liability • Single person – SRCOP €35,550. Below taxable at 20%. Above 40% • USC 2018 - 0.5%, 2%, 4.75%, 8%. PRSI – 4%. Marginal Rate of 52%

7. Resident and Non-Resident Status Residence • Determined by physical presence • Must look at the number of days the individual has spent in Ireland • 183 days or more in the tax year • 280 days in aggregate in the tax year and the preceding tax year (“look back rule”) – applies to current year only • Must spend at least 30 days in Ireland (280 day aggregation test)

8. Example Frank was born in America and spent all of his life there until he came to Ireland on 23 October 2014. He stayed in Ireland until 28th February 2016. What is Frank’s Irish tax residence position in 2014, 2015, 2016 and 2017?

9. Example • 2014 – Not resident (69 days) • 2015 – Resident (183 days) • 2016– Resident (less than 183 days in 2014 but spent more than 30 days here plus had total of 280 days between 2013 and 2014) • 2017– Not resident (not present in the state at any time) 2014 2015 2016 2017 69 days NR 183 days R 280 days R NR

10. Ordinary Residence Ordinary Residence • Irish tax resident in the three preceding consecutive tax years – ordinarily resident in the beginning of the fourth tax year. • A person will cease to be ordinarily resident in Ireland where they have been non resident for the preceding 3 tax years. Cease in the fourth consecutive tax year of non-residence. • Takes 3 tax years to gain and 3 tax years to lose.

11. Example Remember Frank • 2014– Not resident • 2015– Resident • 2016– Resident • 2017– Not resident • Therefore Frank never became ordinarily resident in Ireland – was not resident for 3 consecutive tax years. • If Frank had remained in Ireland in 2017 and considered resident in Ireland, he would then become ordinarily resident in 2018. • Frank would then have to be non-resident in Ireland for 3 consecutive tax years in order to lose his ordinary residence.

12. Domicile Domicile • Legal concept • Permanent Home • Domicile of Origin – acquired at birth • Domicile of Choice – 1. Change, clear intention, burden of proof, factors to consider 2. Establish a physical presence, intention, live there • Only one domicile at any point

13. Non-resident • Non residents are not entitled to tax credits and allowances • Non resident person can apply for proportional tax credits where they are Irish nationals, nationals of EU countries or certain countries with which Ireland has double taxation treaty (not all countries with treaty are entitled for proportional tax credits) • Calculation of Proportional tax credits Irish Tax Credits x Irish Source income Irish+ foreign source income • EU nationals of which Irish-sourced income represents 75% of their total income for the year are entitled to full tax credits and allowances

14. Example Marcis French and has lived and worked in France all his life. On 1st May 2014 he left France to work in Ireland. He returned to France on 1st May 2016. He wants us to look at his Irish tax position for 2014, 2015 and 2016.

15. Example 2014 - Marc is considered resident in Ireland in 2014 based on the 183 day rule. Therefore, Marc is considered Resident, Non Ord Red and Non domiciled in Ireland in 2014 and is taxable on his total Irish source income for the tax year plus remittances. Exemption for remitted income in year of first residence. 2015- Same position as 2014 – except no exemption for remitted income. Leave the rental income earned abroad in a foreign bank account!! 2016– Marc is considered resident in the year 2016 on the look back rule i.e. he spent in excess of 280 days in Ireland between 1st January 2015 and 31st December 2016 with a min of 30 days spent in Ireland in both years. Additional Relief available in 2016 – Split Year Relief!!

16. Split Year Relief Marc is resident in Ireland in 2016 and he is non resident in 2017. There is a relief known as ‘split-year relief’ whereby Marc’s employment income will taxable in Ireland up to the date of departure only i.e. employment income earned thereafter will not be taxed in Ireland in 2016. But Marc hasn’t had the chance to claim all his tax credits by the end of the year. So he can submit a Form P50 or a claim for Split Year Relief. Note A tax return must be submitted to Revenue to claim Split Year Relief. It applies to employment income only. A person has to be considered resident in Ireland in the year of departure and non-resident in the following year. Reverse can apply to year of arrival.

17. Flat Rate Expenses Flat-rate expenses are those that cover the cost of equipment your employee needs for work. This equipment may include tools, uniforms and stationery. The amount of the deduction is agreed between Revenue and representatives of groups of employees (usually trade union officials). Professor, Heads of Schools/Departments €608 Senior lecturer €518 College lecturer €518 Assistant lecturer €518 Part-time lecturer (on full hours) €518 Part-time lecturer (not on full hours) €279

18. Do I have to File a Return? You MUST file a Tax Return if – • You have Non Employment Income not coded into your TCC or • Revenue request that you file 2 Types of Return – • Form 12 - PAYE Taxpayer with net income below €3,174 (€5,000 in 2016, 2017 & 2016) • Form 11 – Self Assessed “Chargeable Person”. Proprietary Directors, Foreign Bank Accounts, Non Employment Income over €3,174

19. Medical Expenses • General: • Tax relief is given as a credit – i.e. 20% against tax paid • Note: exception for nursing home expenditure – still at marginal rate • Qualifying expenses: expenses paid by taxpayer for: • self and spouse • own children or other children who are in custody of and maintained by taxpayer – children must be < 18 or if >18 in full time education • relative • non relative aged 65 or over who is permanently incapacitated (mental/physical) • from 2007 – expenses paid by taxpayer for anyone even if not a relative

20. Medical Expenses • Qualifying Expenses: • Doctors’ and consultants’ fees • Diagnostic procedures (x-ray, scan etc.) carried out on advice of practitioner • Drugs / medicines prescribed by a doctor / dentist / consultant • Beware of monthly limit - can’t claim tax relief for drugs if spend more than monthly limit – 2014 - 2017 €144 – 2018 €134 • Must be prescribed e.g. not Panadol • Maintenance or treatment in hospital or approved nursing home • Supply, maintenance or repair of any medical, surgical, dental or nursing appliance used on the advice of a practitioner

21. Medical Expenses • What about treatment abroad? • If practitioner (GP, consultant, dentist) is entitled to practice under the laws of that country = allowed • If hospital, nursing home, or clinic is on Revenue-approved list, cost of maintenance or treatment is allowed • If care is ONLY available outside state, cost of reasonable travel and accommodation expenses are allowed (including cost of one person travelling with patient if patient requires company – occasionally expenses of both parents of sick child are allowed)

22. Medical Expenses • Dental Expenses • Can claim for NON routine expenses only for which a MED 2 has been signed by dentist • Routine = extraction, scaling, filling, repair dentures • Disallowed even if there is an underlying medical condition • Non routine = crowns, veneers, tip replacing, gold posts/fibreglass posts, gold inlays (limited), root canal, periodontal, orthodontic, surgical extraction of wisdom teeth (impacted), bridgework • Non routine dental treatment outside the state qualifies if dentist is a qualified practitioner in the foreign country

23. Rent Tax Credit • Only due if renting on or before 07 Dec 2010 • Can be claimed if renting on this date outside of Ireland but must provide details • Credit for rent paid re rented residential accommodation which is principal residence • Excludes rent paid to local authority tenancies, army etc(state bodies) • Applies to rent paid outside the state too • If pay “proper rent” to parents, can claim credit (parents will then need to declare this rental income) • Credit depends on age + whether married or single • Can’t be claimed if claiming tax relief on a mortgage

24. Rent Tax Credit • Information required: • Rent paid • Address of rental property • Name and address of landlord or landlords agent • PPS number LL • Date tenancy commenced • - Note if landlord is not Irish tax resident, tenant has additional obligations • Must withhold tax at 20% from rental payments and pay it over to Revenue • If does not and if landlord defaults on tax – tenant can be liable • If rent paid to Irish agent of LL (need not be formal agent e.g. can be family member of LL) then no withholding obligation

25. Tuition fees – Third Level • De Minimus Excluded • Usually in the amount of the Student Contribution - €3,000 p.a. • Often claimable when 2 or more children in college simultaneously • Relief is not available in respect of: • - Any part of the tuition fees that are or will be met directly or indirectly by grants, scholarships, by an employer or otherwise. • - Administration, registration or examination fees.

26. Year of Marriage Tax Credit • Can claim a proportional Tax Credit in year of marriage • If both earning over €34,550, no benefit! • Applies from date of marriage

27. Year of Separation Relief • Potentially very valuable • Additional set of credits • Assessable spouse on joint income up to date of separation • Non Assessable spouse from date of separation

28. Worked Abroad • If you worked abroad, you could be due a tax refund • Taxback.com can assist you in claiming a refund if you worked in: • Australia - New Zealand • USA - Canada • UK - Spain • Austria - Hungary • Germany - Holland • Belgium - Portugal • Denmark - France • Japan - Luxembourg

29. Service, Fees & Benefits Fees • Free Tax Refund Review and Estimation • No Refund, No Fee • No Obligation • Average Refund €995 • 10% Plus Handling Fee if refund over €400 • €40 Plus Handling Fee if refund under €400 UCD EMPLOYEES GET A 10% DISCOUNT ON TAXBACK.COM’S FEES

30. So, Why choose Taxback.com? • We are Ireland’s biggest (and best) Tax Agent • We have been in operation since 1996 and we are ISO certified and a Platinum Standard Deloitte Best Managed Company. • Free Estimation • Unlike other Tax Agents we do not automatically apply for your refund. Once you sign up for our service we complete a comprehensive free tax refund estimation for you. We will work to optimise your position and maximise the refund for you. Other agents will simply request a P21 Balancing statement and will not get you the full refund you are legally entitled to. • Most importantly unlike other agents we work to try maximise your tax refund further • Our qualified tax accountants will complete a comprehensive review of all of your incomes, expenses and tax credits and ensure that you receive the maximum legal refund you are due back. We do all of the hard work finding the refunds for you!

31. Questions and Answers!