Relevant Contracts Tax (RCT ) is a withholding tax that applies to certain payments by principal contractors to subcontractors in the construction, forestry and meat-processing industries.
The rates of tax are 0%, 20% and 35%.
Since 1 January 2012, all RCT complinace, filing and payments are conducted online using the Revenue Online Service (ROS)
All principal contractors are required to register to use the ROS facility. Subcontractors should also register for ROS in order to access details regarding their RCT transactions.
RCT covers certain activities from the construction, forestry and meat-processing sectors. A complete list of all operations under RCT is available.
Some key points regarding RCT are set out below. For full detials please visit Office of the Revenue Commissioners
RCT for non-resident subcontractors
RCT also applies to non-resident subcontractors. If the work is being carried out in Ireland, a principal contractor should deduct RCT from your gross payment. This is the case even if they are also non-resident. If they dom they must provide you with a copy of the deduction authorisation.
Payments without deduction of RCT
You may have applied for and received a 0% RCT rate from Revenue. If this is the case, the principal contractor must still submit a payment notification to us and will receive a deduction authorisation. The principal contractor will make the relevant payment to you without deducting RCT.
To qualify for a 0% RCT rate, you must have an up-to-date compliance record with the Revenue.
Value Added Tax (VAT) reverse charge
The person supplying the goods or dervices normally charges VAT. However, under RCT, the preson receiving the goods or services (the principal contractor) accounts for VAT to Revenue directly. The principal contractor accounts for VAT as if they had supplied the service. This is known as VAT reverse charge. It applies to subcontractors involved in the construction industry only.
Non-resident subcontractors who provide construction services to principal constractors are not required to register VAT. However, you may wish to do so in order to calim credit for any VAT paid.
If you have a query with regard to RCT and how if impacts your business, please do not hesitate to contact our Tax Team. For full policy details please visit Office of the Revenue Commissioners
Whilst every effort has been made by CavanaghKelly to ensure the accuracy of the information here, it cannot be guaranteed and neither CavanaghKelly nor any related entity shall have liability to any person who relies on the information herein. Information given here is for guidance only. Detailed professional advice should be taken before acting on any information contained herein. If having read the guidance here, you would like to discuss further; a member of our team would be pleased to help you.