The Finance Act 2022 has recently implemented important modifications to the responsibilities of tenants and collection agents of non-resident landlords. These amendments aim to streamline the process and ensure proper taxation procedures are followed. Let’s explore the key updates:

Withholding Tax Deductions for Collection Agents: Under the amended Finance Act, collection agents acting on behalf of non-resident landlords are now authorised to deduct withholding tax from rental payments. This withholding tax is currently set at the standard rate of 20% and must be remitted Revenue.

The amendment will also relieve the collection agent from being chargeable to tax in Ireland for such income of the non-resident landlord.

Revenue have introduced a new Non-resident Landlord Withholding tax platform. This will be accessible through Revenue Online Service (ROS) and myAccount. This new system will be available from 1 July 2023.

Relief for Collection Agents: In addition to the new withholding tax provision, the amendment also grants relief to collection agents in Ireland by exempting them from being taxed on the income of non-resident landlords they represent. Collection Agents will:

• no longer be designated chargeable and will not be responsible for filing an Income Tax Return (Form 11) or CT1 for the rental income
• withhold and remit 20% of the rental payment and make a Rental Notification (RN) through a new withholding tax platform in myAccount and ROS
• be able to issue Rental Notifications (RNs) in bulk.

Non-resident landlords should note:

• the removal of all current derogations
• the connection to credits from withheld payments in the new system
• that they will be responsible for filing the Income Tax Return (Form 11) or CT1.

Tenants paying directly to a non-resident landlord:

• will no longer be designated chargeable and will not be responsible for accounting for the withholding figure of 20% on their personal tax return
• will withhold and remit 20% of the rental payment and make a Rental Notification (RN) through a new withholding tax platform available on myAccount.

Non-Resident Landlord Withholding Tax (NLWT) System: The new NLWT system enables tenants or collection agents to make Rental Notifications (RN) when making payments to a non-resident landlord. This notification and accompanying payment needs to be submitted within 21 days of paying the rent to the non-resident landlord.

The system is available to the agent, the collection agent, the landlord and the tenant. Landlords will be able to claim the withheld credits on their annual Income Tax Return (Form 11) or CT1.

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Taxation can be complex, and it’s always advisable to consult with a qualified tax professional. If you are interested in finding out how Gallagher Keane can help you, please book a no-obligation call: