The SARP regime seeks to encourage the relocation of key talent within organisations to Ireland
The Special Assignee Relief Programme (“SARP”) was introduced in Finance Act 2014 and applied with effect from 1 January 2015. The regime seeks to encourage the relocation of key talent within organisations to Ireland and originally applied to those arriving in Ireland in any of the three tax years 2015, 2016 and 2017. This was extended in Finance Act 2016 to also include those arriving during the tax years 2018, 2019 and 2020. The relief is available for up to five consecutive tax years from first arrival in Ireland subject to meeting the conditions outlined below.
In order to qualify for SARP, the following conditions must be satisfied:
The relief operates on the basis of providing a deduction from remuneration based on a formula as follows:
A-B) X 30%
A = Total remuneration of the employee
B = €75,000
Where an employee arrives or leaves Ireland mid year, “B” is reduced proportionately.
The relief only applies to income tax, ie. no relief from USC or PRSI is available. Employees who qualify for the new regime can recover the cost of one return trip for their family to their home country from their employer tax free and can also have Irish school fees (of up to €5,000 per annum for each child) paid by the employer tax-free.
SARP relief can be claimed either by:
An employer must provide by 23 February following the tax year an annual return setting out a qualifying employee’s PPS number, nationality, prior country of residence, job title and role. In addition, the annual return must set out the increase in number of employees employed or retained as a result of qualifying employees working in Ireland.
There can be some difficulties in practice for an individual to meet all of the conditions to qualify for SARP.
If you would like further information on the SARP regime, please contact a member of our Global Mobility Team.
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