• Significant Changes to Revenue Rules for International Business Travellers

Significant Changes to Revenue Rules for International Business Travellers

26 June 2020

The Irish Revenue Commissioners have published updated guidance in relation to the tax treatment of short-term business travellers and other internationally mobile employees. The updated guidance should greatly simplify the application of Irish income tax to such international workers and is very much welcomed.



In principle, any person coming to Ireland to Ireland to perform the duties of their employment for any period of time has an exposure to Irish tax. Apart from any personal liability to Irish tax, the presence of an employee in Ireland may also create an obligation for their employer to operate and account for Irish payroll tax withholding on their salary through the PAYE system. This general rule is however subject to the application of domestic legislation and Double Taxation Agreements entered into by Ireland and other countries.

Where there is a Double Taxation Agreement (DTA) in place, it is usually possible to obtain an exemption from Irish tax for short term business travellers and temporary assignees. The principal conditions to be met are that:

  • The individual is present in Ireland for less than 183 days, either in the year in question, or in some cases over the course of a 12-month period starting or ending in the relevant year,
  • That the individual is employed and paid by a non-Irish resident employer, and
  • That the cost of the remuneration is not borne by a permanent establishment that the foreign employer has in Ireland

Where the individual meets the conditions, it is also possible for the employer to obtain permission from Revenue not to operate Irish PAYE.


Prior Revenue Practice

Prior to 1 January 2020, Revenue’s published guidance imposed some significant limitations on the availability of DTA relief for business travellers. These included:

  • A requirement to count Irish workdays on a ‘rolling basis’ over consecutive years to determine if the 60 days concession applied, and
  • A particular approach to determining which entity was the ‘employer’ for DTA purposes.

The first point created significant work in tracking Irish workdays, as well as risk for the individual and their employer if the 60 days threshold was inadvertently breached. The second point was potentially more troublesome, because Revenue’s approach to determining the ‘employer’ did not look solely at the actual legal relationship, but instead looked at which entity could be said to have the economic benefit and risks associated with the individual’s services. As a result, in many cases it was contended by Revenue that the Irish entity was the ‘employer’, even if the legal contract was with a foreign employer based outside of Ireland. If the individual was deemed to have an Irish ‘employer’, treaty relief was not available.


Changes to Revenue Practice effective from 1 January 2020

Updated Revenue guidance published on 24 June confirms that:

  • Revenue will no longer apply an ‘economic employer’ approach for DTA purposes but will instead have regard to the actual legal relationship.
  • The requirement to count workdays on a rolling basis for the purposes of the 60-day threshold ceases to apply for 2020 and subsequent years.
  • The simplification of the process for applying for PAYE dispensations where workers are present in Ireland for between 60 and 183 days, and
  • Confirmation that the 60 days de minimis concession will be automatically available to residents of other DTA states, without the need for specific application.

The Irish Revenue’s treatment of international assignees and short-term business travellers, effective from 1 January 2020 is summarised in the table below:

The full text of the guidance may be found at: https://www.revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-42/42-04-65.pdf



Although international travel is still subject to significant constraints due to Covid-19, the changes to Revenue’s guidance are very welcome. They will greatly simplify the administration and tax treatment of international assignments and cross border business travel generally. By making these changes the Irish Revenue have signalled that once normal conditions resume, Ireland is very much open for business.


How we can help

Our dedicated Employment Tax and Global Mobility team are part of BDO’s international network. We can assist with applications for PAYE dispensations, the operation of actual and shadow payrolls, employer and personal tax compliance and international social security administration.



For more information, please contact:

Mark Hynes, Tax Director - [email protected]

Laura Murray, Tax Senior Manager - [email protected]

Pat O’Brien, Employment Tax Senior Consultant - [email protected]