Tax residence

What is domicile and the domicile levy?

Domicile is a concept of general law. It broadly means living in a country with the intention of living there permanently. Domicile is a much more permanent concept than residence.

Everyone has a ‘domicile of origin’ at birth (usually the domicile of the father). You keep your domicile of origin unless you choose to gain a new domicile.

To gain a new domicile, you must show clear evidence that you:

• intend to live permanently in the new country
• and
• do not intend to return to live in your domicile of origin.

Your domicile affects how foreign-source income is taxed in Ireland.

Remittance basis of assessment

You may be Irish tax resident, but non-ordinarily resident and not domiciled in Ireland for a tax year. In this case you will pay Irish tax only on your:

• Irish source income
• and
• foreign income, to the extent that it is remitted into Ireland.

This is called the remittance basis of assessment. Remittance means the funds you send to Ireland from abroad by:

• wire
• mail
• or
• online transfer.

Domicile levy

You may have to pay a domicile levy if you are Irish domiciled and your:

• worldwide income exceeds €1m
• Irish property is greater in value than €5m
• Irish Income Tax in a year was less than €200,000.

The amount of the levy is €200,000 per year. You pay the levy each year you are liable on or before 31 October in the year after the valuation date. This is done through self assessment. The valuation date is 31 December each year.

You may offset the amount of Irish Income Tax that you paid in a year against the domicile levy due for that year. You cannot offset the Universal Social Charge (USC) against the levy.

The pay and file deadline for domicile levy has been extended to match the pay and file deadlines for self-assessment.

Before 2012 the levy applied to individuals who were Irish citizens as well as being domiciled in this country.

Irish property

‘Irish property’ means all the assets you own in Ireland on the valuation date. This does not include shares:

• in a company that wholly or mainly carries on a trade or trades holding company
• which derive their value from subsidiaries that wholly or mainly carry on a trade or trades.

Note

Shares you receive from property located in Ireland are treated as Irish property. You cannot claim a deduction for any debts such as mortgages or loans in estimating the market value of your property.

Filing returns and paying the levy

If you are liable for the domicile levy, you need to file a return and pay through Revenue Online Service (ROS). You need to file the return and pay on, or before, 31 October of the following year.

If you cannot access ROS, you can download the return Form DL1 and:

• post the completed form to the Collector-General’s Office
• and
• pay through myAccount, if you are a PAYE worker
• or
• by Electronic Funds Transfer (EFT), if you are non-resident.

Next: Tax treaties between Ireland and other countries