Coronavirus: Irish Revenue relaxes corporation tax presence rules

In the guidance, the Revenue said that if an individual normally resident elsewhere is present in Ireland as a result of Covid-19 related travel restrictions, it will be prepared to disregard that presence for corporation tax purposes for a company in relation to which the individual is an employee, director, service provider or agent.

Similarly, if an individual is trapped in a different country due to Covid-19 related travel restrictions, the Revenue said it would also disregard this presence outside Ireland for corporation tax purposes.

This means that if an individual is employed by a foreign company, but is present in Ireland because travel restrictions prevent them from leaving, the Revenue will not view this as establishing a taxable presence in Ireland for the company.

Meanwhile, if a director of an Irish company is unable to get to Ireland for a board meeting or other company purpose, that will have no impact on the company’s corporation tax status in Ireland.  

The Revenue said that both the individual concerned and the company should keep a record of the facts and circumstances of the individual’s presence or absence from Ireland, to show to the authority if evidence of the Covid-19 related travel restrictions was requested.

The Revenue also provided guidance for individuals relating to tax residence status, saying that it regarded the coronavirus as a ‘force majeure’ event. Existing guidance says where an individual is prevented from leaving Ireland on their intended day of departure due to unforeseen or unavoidable ‘force majeure’ events, the individual will not be regarded as being present in the state for tax residence purposes for the day after the intended day of departure