The Special Assignee Relief Programme (SARP)

Established in 2012 as a cornerstone of Ireland's Foreign Direct Investment (FDI) strategy, the Special Assignee Relief Programme (SARP) is designed to attract highly skilled foreign employees to relocate to Ireland. This program directly stimulates job creation and fosters business expansion within the country.

SARP provides a significant incentive by offering income tax relief on a portion of an employee's earnings when they are assigned to work in Ireland by an overseas employer or an associated company.

• Relief Calculation (2023 and onwards): 30% of an employee's income exceeding €100,000 is disregarded for income tax purposes. An upper income limit of €1 million applies.
• Important Note: While SARP provides relief from income tax, the disregarded income remains subject to Universal Social Charge (USC) and Pay Related Social Insurance (PRSI).

To qualify for SARP, several key conditions must be met:

Eligibility Requirements:

• The employee transferred to Ireland by an overseas employer.
• Minimum 6 months of prior employment with the overseas employer prior to arrival in Ireland.
• The overseas employer must be incorporated and tax resident in a country with a double taxation agreement or tax information exchange agreement with Ireland.
• Employee must not have been an Irish tax resident during any of the five tax years prior to arrival.
• Employee must be an Irish tax resident for all years during which SARP is claimed.
• Minimum 12 continuous months of employment duties in Ireland from date of arrival.
• Minimum annual basic salary of €100,000 (excluding bonuses, benefits, and share-based remuneration).
• Employer certification to Revenue within 90 days of the employee's arrival.
• Employee must obtain a Personal Public Service Number (PPSN).
• Returning Irish citizens may also avail of SARP if they meet the relevant conditions.
• SARP cannot be claimed in conjunction with certain other tax reliefs, such as the remittance basis for foreign-sourced employment income and the Foreign Earnings Deduction (FED).
• Pre-Arrival Considerations: Revenue permits a limited number of pre-arrival days in Ireland for work or personal purposes within the six months prior to arrival. Extensive pre-arrival work in Ireland will disqualify an individual. If working for an associated company, employment should begin immediately after the Irish contract is signed.

The tax relief is calculated by determining the “specified amount”.

• Calculation Example: Employee earns €160,000. (€160,000 - €100,000) x 30% = €18,000 (amount disregarded for income tax). If the employee's marginal tax rate is 40%, the income tax relief is €18,000 x 40% = €7,200.

For application and reporting purposes:

Application and Reporting:

• Employers must certify employee eligibility to Revenue within 90 days of arrival. Employees claiming SARP become chargeable persons, requiring annual tax return filings. Employers must submit an annual SARP employer return to Revenue by February 23rd of the following year.
• Due to the complexities of SARP, both employers and employees are strongly advised to seek professional tax advice well in advance of the employee's arrival in Ireland.