Right to Work

EEA and Swiss Citizens

Citizens from EU member states, one of the countries of the EEA (The EEA includes EU countries and also Iceland, Liechtenstein and Norway), or Switzerland are entitled to work in Ireland without an employment permit. They are also entitled to have their dependents come to live with them in Ireland. A non-EEA spouse or civil partner who is coming to live in Ireland must apply for permission to remain under EU Treaty Rights in order to have similar rights to live and work in Ireland.

EEA and Swiss nationals are entitled to be treated in the same way as Irish citizens when they apply for work in Ireland. They are free to apply for any job vacancy, including jobs in the public sector. These include jobs in the Irish army and the Irish police force, but not the Irish diplomatic service.

There is a system of mutual recognition of qualifications between the EEA countries.

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Hiring, Terminations, and Transfers

Hiring

Before PAYE modernization

Currently, an individual receives a Form P45 from their employer when they leave their employment. When that individual finds a new job, they give Part 3 from that form to their new employer. This form will show the new employer their new employee’s PPS number and some additional information discussed below. The new employer must complete Part 3 of the new employee’s Form P45 and submit it to Revenue immediately in order to receive the employee’s Tax Credit Certificate (P2C). If they do not receive a P45 from the new employee, then the new employer should submit a Form P46. The P2C will show the details the information that an employer needs to calculate an employee’s taxes.

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This is the million-dollar question faced by Irish residents in a start-up scenario. It depends on numerous factors such as your type of business, whether you’re still going to be in other employment, likelihood of success, projected turnover, whether you have investors now or in future, whether you want to put profits into a pension, etc.

The best advice we can give is to talk to an Accountant or Tax Advisor. Preferably a good one! A good Accountant will evaluate your business and give you the pros and cons of your type of business. If you want us to put you in touch with a good Accountant in your area please don’t hesitate to contact us. We have a network of contacts around the country whom we work with.

The main difference is that a Limited Company is a separate legal entity from the individuals involved (Directors and Shareholders) A Limited Company needs to make Annual Returns with the Companies Office and there is more compliance and red tape, however, they are generally thought to be the most tax efficient. For example, Company Directors can put profits into their pensions virtually tax-free (within reason of course!)

If you register as a Sole Trader or a Partnership you will need to register a Business Name if you are carrying out business under a name other than your own e.g. ‘John Smith Carpentry’ as opposed to just ‘John Smith’ You and your business are legally and financially the same person, so you don’t have ‘limited liability’ like you do with a Limited Company.

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Value Added Tax (VAT) is a minefield for many people when starting a new business and it’s something we are asked about by our clients on a regular basis.  Most ask us how they can avoid it!  The purpose of this article is to give a brief overview of VAT, and to explain why it actually may be a good idea for businesses to voluntarily register for VAT. However, it should be noted that a company cannot register for VAT unless it has a physical trade in Ireland, i.e. the company has a base in Ireland and/or is making sales to Irish customers.

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A company is required to have an Irish legal entity established in order to process a payroll in Ireland.

Company

In order to set up as a company, the client must first register with the CRO and receive a CRO number. For multinationals, registering as a Limited Company with the Companies Registration Office (CRO) typically takes 2-4 weeks.

If the client uses a tax agent, then the agent must register with Office of the Revenue Commissioners (Revenue) online through Revenue Online Services (ROS). If no tax agent will be used, then the client must register through mail using Form TR2 for Irish resident companies or Form TR2 (FT) for foreign companies; Revenue will then send the client instructions to complete registration using ROS.

Revenue will provide the client with a Tax Reference Number (TRN), which it will use when trading and filing tax returns. Tax filings and payments must be done using ROS.

Setting up an in-country bank account is not necessary as it is not mandatory to make payments to employees from an in-country bank account.

Sole trader

In order to set up as a sole trader, the client must first register for a Personal Public Service (PPS) number by going in person to the nearest PPS Number Allocation Centre (in Ireland only). It is also possible to register for the PPS number from overseas by submitting a general enquiry through this link.

The client then registers with Ireland’s revenue department and pays all of taxes using their personal PPS number. This link can be used to register. Then, all payments and returns can be filed on myAccount.

If the client wants to use a business name rather than their own name or surname, then they can register with the Companies Registration Office (CRO) using Form RBN1.

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Overview

By law, employers in Ireland must keep certain records on file relating to their employees for specific minimum periods. These records must be kept at the place of employment. The Workplace Relations Commission, Office of the Revenue Commissioners, and other bodies may request these records during an inspection. In addition, it is recommended that the employer keep certain documentation for support in the event of a dispute.

Various minimum retention periods flow from numerous separate statutes, and lack any obvious consistency or underpinning logic. While the most important of the current retention periods are set out below, these retention periods are not exhaustive and are subject to change. We would strongly advise that employers seek out specific and specialist legal advice to confirm how the various periods may apply to their given situation.

Where employee records are not required to be held by law or to defend future proceedings, employers may retain the relevant data for so long as is necessary for the purpose or purposes for which they were collected or legitimately further processed. This needs to be ascertained on the facts of each specific case; there are no concrete periods of time on which data controllers can rely to comply with this requirement. The Data Protection Commissioner’s (‘DPC’) approach to this issue is best seen in his published Audit Report into the activities of Facebook Ireland Limited. On page 74 of this report, the DPC noted that “all periods chosen for the retention of personal data must be fully evidence based, and the period chosen cannot seek to cover all possible eventualities where personal data may be useful to the company.”

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