Withholding Tax Ireland

Relevant Contract Tax (Construction Withholding Tax) in Ireland

We assist companies with the registration for RCT and filing of returns. We also advise about whether the services in question are liable to RCT.

Before a subcontractor can be paid the payment must be filed on Revenue’s online system so that the authority can check whether and how much RCT should be paid.

There are three different tax rates, depending on the amount payable to the subcontractor:

  • 0% for companies that fulfilled their tax liabilities without any difficulties and on time in the last three years
  • 20% for companies with an Irish tax number
  • 35% for companies without an Irish tax number and/ or companies that did not meet their tax liabilities

If the payments are filed too late or not at all this may lead to fines up to 35% from the amount payable.

Normally subcontractors that pay the Irish RCT do not need to charge the VAT. In this case the main contractor is responsible for filing VAT returns (“reverse charge”).


Construction Withholding Tax in Germany

There is also a construction withholding in Germany. The rate is 15% and it might apply on payments to subcontractors. It is possible to apply for an exemption from this deduction.

Irish Taxation offers advice on Construction Withholding Taxes in Germany as well as registering for taxes, filing returns and applying for the exemption from the construction withholding tax.