What is the Special Assignee Relief Programme (SARP) in Ireland?

The Special Assignee Relief Programme (SARP) is a tax relief initiative introduced by the Irish government to attract skilled individuals from abroad to work in Ireland. The program allows qualifying employees to reduce their taxable income, thereby providing significant tax savings. SARP applies to assignments made during the tax years from 2012 to 2025.

Eligibility Criteria

To qualify for SARP, an employee must meet the following conditions:

Existing Employment: The individual must have been employed by a relevant employer outside of Ireland for a continuous period of at least six months immediately before being assigned to work in Ireland.
Assignment Duration: The individual must be assigned to work in Ireland by a relevant employer or an associated company for a minimum period of 12 consecutive months.
Tax Residence: The individual must become tax resident in Ireland during the year of their assignment and must not have been tax resident in Ireland for the five tax years immediately preceding the year in which the assignment begins.
Minimum Income Threshold: The individual must earn a minimum basic salary of €100,000 (excluding bonuses, commissions, and other similar benefits) to qualify for the relief.

Tax Relief Benefits

Under SARP, qualifying employees can avail of the following benefits:

Income Tax Relief: The relief allows the employee to exclude 30% of their income over €100,000 from Irish income tax. For example, if an individual earns €150,000, the relief applies to 30% of €50,000 (€150,000 - €100,000), meaning €15,000 is exempt from income tax.
Cap on Benefits: While there is no cap on the amount of income that can be subject to SARP relief, it’s important to note that the relief is only applicable to the portion of income exceeding €100,000.
Employer-Provided Benefits: In addition to the tax relief, the program allows employers to cover certain expenses such as one return trip for the individual and their family to their home country and school fees for dependent children up to €5,000 per child per year. These expenses are not considered a taxable benefit-in-kind.

Duration of Relief

The SARP relief can be claimed for a maximum of five consecutive tax years, starting from the year in which the employee first becomes eligible. For example, if an individual first qualifies in the tax year 2024, they can claim the relief for the years 2024 through 2028, provided all other conditions continue to be met.

Application Process

To claim SARP relief, the following steps must be taken:

Notification to Revenue: The employer must submit a SARP Employer Return (Form SARP 1A) to the Revenue Commissioners within 90 days of the employee’s arrival in Ireland. This form provides details about the individual’s employment and assignment.
Annual Tax Return: The employee must submit an annual tax return each year in which they wish to claim SARP relief, using the appropriate sections of the Form 11.
Employer’s Role: The employer is required to certify certain details and must ensure that the employee’s income meets the required thresholds. The employer must also maintain records to support the claim and provide these to Revenue if requested.

Additional Considerations

PRSI and USC: The relief provided under SARP does not apply to PRSI (Pay Related Social Insurance) or USC (Universal Social Charge). The full income, before applying SARP relief, is liable to these charges.
Changes in Employment: If the individual’s employment conditions change (e.g., they leave the relevant employment or cease to meet the eligibility criteria), the relief may be impacted. It is essential to inform Revenue of any such changes.
End of Relief: The relief will cease if the assignment ends, if the individual no longer meets the qualifying conditions, or after the five-year maximum period.

Further Information

For detailed guidance on SARP, including comprehensive examples, legislative references, and the forms required, please refer to the official Irish Revenue SARP page.

In this article...

Ireland