Tenants and collection agents acting on behalf of non-resident landlords can now take advantage of a new online portal launched by Revenue to handle income tax payments.
As per the Finance Act 2022, changes to Non-Resident Landlord Withholding Tax (NRWT) came into effect on 1st July 2023. This was also the date that the new online platform went live, promising to streamline and speed up tax administration for tenants and agents.
If a landlord is not a resident in Ireland, income tax on rent has to be taken directly out of payments and passed to Revenue. This can be done by the tenant if they pay rent directly to the landlord, or by a collection agent – someone resident in the country who takes rental payments on the landlord’s behalf.
The new NRWT portal, which is accessible through Revenue Service Online (ROS) and myAccount, lets tenants and collection agents make Rental Notifications (RN) to Revenue every time a rent payment is made.
Tenants and collection agents are allowed to withhold Income Tax from the rent they pay, currently at the standard 20% rate. This withheld amount is then remitted to Revenue as part of the notification process. Landlords can claim the withheld amounts back as a tax credit when it comes to filing their tax returns. The new system automatically credits sums back via the landlord’s tax return.
Tenants and collection agents are no longer chargeable
The changes in the law around NRWT also ease some of the burden of responsibility on both tenants and collection agents. With the new digital system, they are simply administrators who file the RN and NRWT payments on behalf of the landlord.
Collection agents are no longer considered chargeable for tax owed and will no longer have to file an Income Tax return (Form 11) or Corporation Tax return (CT1) for the rental income. Similarly, tenants will not have to account for the withheld sums they take out of rental payments and pay to Revenue on their personal tax returns.
Non-resident landlords, on the other hand, now have to make a decision about whether they want tax on rental payments to be handled by tenants or collection agents using the new NRWT system. If they do, they must make a tax registration and are now responsible for filing Form 11 or CT1 returns every year, which provides the link to the credit system. All previous derogations for non-resident landlords have now also been annulled.
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