Tax

Irish construction companies in Europe

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Your employment tax obligations
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Key employment tax considerations

Foreign countries

A foreign employment tax obligation can arise from as little as an employee spending one day working in a foreign country. Such obligations should be considered from a very early stage given the high personal tax rates that apply across Europe and associated penalties for companies who fail to register for and operate payroll withholding taxes.

Ireland

It is equally important to consider the construction company’s Irish employment tax obligations where the individuals are employed by an Irish company. Depending on the tax residence status of the employee and the length of time spent working abroad, a company can continue to be required to operate Irish payroll withholding taxes (known as PAYE). This is often not given full consideration
by employers leading to a potential exposure to sanctions for failure to correctly operate Irish PAYE.

Managing double taxation

Where a payroll withholding tax obligation arises in both the foreign country and in Ireland, it is critical that a construction company puts in place policies and procedures to manage double taxation and company cashflow. This is one of the most difficult employment tax issues to manage.