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bigduckontax
bigduckontax, Accountant
Category: Tax
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Is it correct that a uk professional services company would

Customer Question

Is it correct that a uk professional services company would be subject to PSWT and would have to reclaim from the Irish government?
Submitted: 2 years ago.
Category: Tax
Expert:  bigduckontax replied 2 years ago.
Please elaborate on the acronym 'PSWT?' An UK professional services company would need to operate within the UK taxation regime.
Customer: replied 2 years ago.
Professional services withholding tax
Expert:  bigduckontax replied 2 years ago.
Oh I see! Irish Tax and Revenue have the following advice: 'A withholding tax, at the rate of 20 per cent, is deductible at source from payments for "professional services" made to individuals and companies by "accountable persons" (Government Departments, local authorities, health boards, State bodies, etc.). The tax applies generally to fees and similar payments made by listed accountable persons but does not apply to payments already covered by PAYE or the construction industry tax deduction scheme. The tax also applies to payments made by health insurers under contracts of insurance to cover fees for services provided by medical practitioners in certain circumstances. The tax is charged on payments net of value-added tax.' This with holding tax does apply to organisations from outside Ireland working into the Republic. Reclaim is a common necessity in these situations. A bit of a pain, but unfortunately necessary. Alternatively, leave it there and use the tax credit created under the Double Taxation Convention between the UK and Ireland to offset UK tax liabilities. I do hope that my reply has been of assistance.
Customer: replied 2 years ago.
Using the treaty sounds like a good idea as we pay CT in UK. How would that work!
Expert:  bigduckontax replied 2 years ago.
Well it all depends upon the level of CT paid. Obviously the offset would only be used to cover the CT bill the balance being available for reclaim. You take the relief into account when computing your company's CT position. It may, of course, simply be more convenient to call back all the tax then settle in full the CT bill with HMRC. It's six of one and half a dozen of the other.
Customer: replied 2 years ago.
So presumably we would get some sort of certificate of deduction to validate the offset?
Expert:  bigduckontax replied 2 years ago.
Yes, your debtor should provide you with evidence of Irish with holding tax deducted when settling their invoice.
Customer: replied 2 years ago.
Great, thanks.
Expert:  bigduckontax replied 2 years ago.
Delighted to have been of assistance. Please be so kind as to rate me before you leave the Just Answer site.
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Expert:  bigduckontax replied 2 years ago.
Thank you for your support.