Assume that a foreign national employee of a foreign company wishes to work remotely for a period of time in your country performing services exclusively for the foreign company and not interacting with the local market in your country.
Work authorisation
A. Is work authorisation required? If so, please provide a brief description of the type of visa, procedure, processing time, etc.
If a foreign company is employing an employee to work in the Republic of Ireland (whether remotely or not), then the company will need to register as a foreign employer with the Irish Revenue Commissioners. However, if the foreign national is a non-EEA national (other than a Swiss or UK national), then specific immigration rules will need to be complied with before the foreign national can work in the State (whether working remotely or not). In these circumstances, a foreign company will need to establish a branch or subsidiary in the State before an employment permit will be issued to employ the foreign national.
In order to work in the Republic of Ireland, all non-EEA nationals (other than Swiss and UK nationals) require either (i) a valid employment permit or (ii) relevant immigration permission from the Minister for Justice (which allows them to reside and work in the State without the requirement for an employment permit). The EEA comprises the Member States of the European Union together with Iceland, Norway and Liechtenstein. If an employer is found to be employing an individual illegally, it may be subject to significant criminal sanctions under the Employment Permits Acts 2003 to 2020 (the Acts) with fines of up to €250,000 and imprisonment for up to 10 years.
Employment permits are issued by the Department of Enterprise Trade and Employment in respect of a specific role to be performed in a specific location for a specific employer. Once an employment permit is issued, the relevant employee is then generally granted a right to reside, which is issued by GNIB (the garda national immigration bureau) by way of a residence card (IRP card).
Different types of employment permits are available in Ireland for non-EEA nationals. There are 9 different types of permits. The most common types of employment permits are the General employment permit, the Critical skills employment permit and the Intra-company transfer employment permit.
General Employment Permit
- A prospective employer or foreign national can apply for this permit subject to a contract of employment and other eligibility criteria being satisfied by the prospective employer and foreign national.
- The minimum annual remuneration is generally €30,000 (certain exceptions).
- A “Labour Market Needs Test” is required in most cases save for certain specific instances
- Certain roles are ineligible based on an ineligible list of occupations.
Intra-Company Transfer Permit
This permit facilitates the transfer of senior management/key personnel or trainees from an overseas company to an Irish entity within the same group.
- Salary threshold:
– €40k for senior management
– €40k for key personnel
– €30k for persons undergoing a training programme.
Minimum service with foreign employer prior to transfer (e.g., 6 months for senior management or key personnel and 1 month for trainees)
- Employee must stay on foreign payroll
- Ineligible list of occupations does not apply
Critical Skills Employment Permit
Highly skilled workers only
• Path to permanent residency in Ireland
• There must be a job offer of at least 2 years’ duration
• Only eligible occupations on Critical Skills Occupations List if earning between €32,000-€63,999. All roles eligible (other than ineligible occupations) if earning over €64,000
Occupations such as: ICT professionals, engineering professionals, teaching and educational professionals, health professionals, nursing, and midwifery professionals. The list is updated regularly.
• No Labour Market Needs Test required.
Permit processing times vary depending on the type of permit and the workload of the department at the time. The time frame can range from 2 weeks to 3 months or longer. Applicants are advised to submit the application form 8 weeks in advance of the proposed employment start date. The department publishes its processing times for each permit type so this can be viewed at any time.
Visa permissions
Employees may also hold a relevant immigration permission from the Minister for Justice which allows them to reside and work in the State without the requirement for an employment permit. Common immigration permissions are student and graduate visas.
Entry Visa for certain nationalities
Some non-EEA nationals will also require an entry visa to enter Ireland, in addition to an employment permit or other permission, depending on their nationality. There is a specific list of Visa Required Nationalities and Non-Visa Required Nationalities. On receipt of their permit, visa required nationals will need to apply from abroad for their visa to enter the State.
Risk of ‘permanent establishment’
B. Is there risk of ‘permanent establishment’ consequences for the foreign company by virtue of the remote worker’s activities? If so, what are the main factors determining the exposure.
The existence of a Permanent Establishment (PE) in the Irish context is in line with the model Organisation for Economic Co-Operation and Development (OECD) definition which provides that a PE is a fixed place of business through which an enterprise is wholly or partly carried on, and shall include a place of management, a branch, an office, a factory, a workshop, a mine, quarry or other place of extraction of natural resources and a building site or construction or assembly project which exists for more than twelve months. An agent acting on behalf of the enterprise which has and habitually exercises authority to do business on behalf of the enterprise in Ireland can also constitute a PE.
Whether a PE exists is a question of interpretation taking account of the specific circumstances on a case-by-case basis. In certain circumstances a person’s own home can be regarded as a fixed place of business and therefore potentially giving rise to the existence of a PE. This is a matter which has become increasingly more relevant since the Covid-19 pandemic resulted in employees being forced to work remotely in certain instances, and while the Irish Revenue Commissioners have provided confirmation in relation to such forced periods of remote working, the matter of the home office is not something that their office has issued significant guidance on. The OECD has provided some guidance by stating that in general for a home office to be regarded as a PE there must be a degree of permanency to the arrangement and the location must be at the disposal of the business. The guidance goes on to say that that a home office may be a PE for an enterprise if it is used on a continuous basis for carrying on the business of the enterprise. Furthermore, the enterprise must have required the individual to use that location to carry on the enterprise’s business, and such a requirement can arise in a scenario where an office has not been provided to an employee in circumstances where the nature of the employment clearly requires an office.
If it is the case that the home office would in general terms constitute a fixed place of business in line with the relevant legislation and guidance, then the actual activities carried on by the employee would need to be addressed to ascertain whether such activities would come within the PE parameters. The question that arises here is whether the activities of the employee would be integral to the enterprise’s product/service offering or whether those activities could be described as preparatory or auxiliary nature. If the activities of an employee can be described as preparatory or auxiliary, taking account of the overall business of the enterprise, then such activities on their own should not give rise to the existence of a PE.
In order to provide specific advice in relation a particular situation, the country of residence of the employer would need to be ascertained and the relevant provisions of any Double Tax Agreement (DTA) in existence between Ireland and that jurisdiction would need to be considered. The actual role of the employee would also need to be considered in terms of considering whether the duties could be considered to be preparatory or auxiliary having regard to the business carried on by the employer, while the degree of permanence of the role and whether it is governed by Irish employment law would also be relevant. If the role is subject to an Irish employment contract, where would that contract specify the employee’s place of work to be and if the employee is remotely working from home, does the employer make any financial contribution to the employee’s home office or do they pay any special remuneration to compensate them for any costs incurred.
Local social security and other payroll requirements
C. At what point and under what circumstances would the remote worker become subject to local social security and other payroll requirements? Can such requirements be fulfilled by a foreign company, and if so by what mechanisms?
Where an employee of a foreign employer carries on the duties of their employment in Ireland, there is an obligation for the employer to register in Ireland for employment taxes from day one. However, employer taxes are not required to be operated on temporary assignees coming here to work from countries with which Ireland has a Double Tax Agreement for periods of 60 workdays or less in a calendar year. This 60-workday period can be increased up to 183 days (working and non-working days) when a special dispensation is obtained from the Revenue Commissioners in certain circumstances. It is important to note that if the relevant period is exceeded then the obligation to operate employer taxes here arises from day one.
Where, due to the existence of an Irish employment, a foreign employer is obliged to operate payroll taxes in Ireland then they will be required to register with the Irish Revenue Commissioners and deal with their employer obligations on a periodic basis and in line with Irish legislation. In this regard all payments to employees are required to be reported electronically to the Irish Revenue Commissioners on a real time basis and all related payroll deductions are required to be calculated in line with details of any employee’s tax bands and credits issued by the Revenue Commissioners and collected under the Pay as You Earn (PAYE) system.
Social insurance/security obligations are generally linked to the place where work is physically carried out, however exceptions can apply where a bilateral social security agreement exists between Ireland and the country of residence of the employer. Such exceptions generally allow ‘posted’ workers or those on temporary assignments abroad to continue to contribute to the system in their previous location for a specified period of time. Where the relevant exceptions do not apply then Irish social insurance (PRSI) would apply to the employment and this may give rise to liabilities for both the employee and the employer. Where PRSI applies to an employment then any liabilities arising are collected by the Irish Revenue Commissioners under the PAYE system. A local payroll agent may be appointed to process payroll and taxes on behalf of the foreign employer.
Alternatively, a foreign employer could seek to engage a third party to deal with any employer tax related issues under an ‘employer of record’ arrangement. In effect this type of arrangement would move the employer tax and social insurance obligations to the third party in terms of dealing with payroll and discharging related liabilities. Such an arrangement creates complex issues from an Irish employment law perspective and specific employment law advice should be obtained. The issue of an employer of record is not something that the Irish Revenue Commissioners have issued any comment or guidance on in general terms, however there are many entities offering the facility in Ireland. In the international context the use of employers of record is more prevalent and such arrangements would in general be of short-term duration (generally not longer than 12 months).
Local employment law requirements
D. At what point and under what circumstances does the remote worker become subject to local employment law requirements such as is wage-hour, local holidays, annual leave, maternity leave, disability leave, protection against unfair dismissal, etc.
If the employee is physically present and working in the Republic of Ireland for any length of time except for a very short visit (the test is whether the employee is “ordinarily working” in Ireland), it should be assumed that all Irish legal obligations will need to be adhered to in respect of the employee. As such, the employee would likely benefit from all employment legislation. The fact that the employer does not have a formal presence in the Republic of Ireland is irrelevant to the employee’s employment rights. The employee’s presence in the Republic of Ireland while working for their foreign employer will likely be enough to establish territorial jurisdiction for the employee to make employment claims in the Irish courts and the Workplace Relations Commission.
In addition to the above, when the European posted workers legislation was implemented in Ireland, it was implemented in a very broad manner so that the resulting provisions of Irish law not only protect posted workers but provide that most Irish employment legislation that confers rights on Irish employees is deemed to apply “to a person irrespective of his or her nationality or place of residence who has entered into a contract of employment that provides for his or her being employed in the State” or “works in the State under a contract of employment …”. There is no waiting period required for these rights to apply.
The Workplace Relations Commission is the forum which hears most employment related claims such as discrimination, working time, minimum wage and unfair dismissal claims. Working in the Republic of Ireland is also likely to be sufficient to establish jurisdiction for the employee to bring a claim in the Irish Courts. The Irish courts (including the district court, circuit court and high court) are typically the fora in which an employee may bring a personal injury claim or a claim for breach of contract. Working in the Republic of Ireland may also possibly enable the employee to argue that Irish law applies to their contract of employment.
Remote foreign worker
E. Are there special requirements governing remote work in your country which would cover the remote foreign worker?
Posted Workers
Posted Workers legislation in Ireland provides that the full range of Irish employee protection legislation applies to qualifying workers posted to work in, or otherwise working in the State.
To provide for improved monitoring of posting situations and to improve compliance with existing rules on posted workers, additional legislation on posted workers has been implemented, the key measures of which include:
- a new requirement on foreign service providers when posting workers to Ireland to notify the Workplace Relations Commission (WRC). The service provider must provide certain information (using the prescribed Form of Declaration) which will enable the WRC to monitor posting activity and ensure compliance with posting rules;
- a new subcontracting liability in the construction sector to guard against posted workers being paid less than their minimum entitlements. Where a posted worker in construction is not paid the applicable statutory rates of pay by their direct employer, the contractor one step up the supply chain may also be held liable for the shortfall in the net remuneration payable;
- the creation of a right for a posted worker to refer a complaint to the Director General of the WRC naming both the direct employer and the contractor one step up as respondents;
- the introduction of a defence of due diligence for the contractor in any claim before the WRC. The regulations set out in detail the test or criteria which the contractor will have to satisfy in order to avail of the defence of due diligence;
- new measures which allow for the enforcement of cross border financial administrative penalties and fines incurred in another Member State by a service provider in the Member State in which the service provider is based.
Prior to the enactment of the Work Life Balance and Miscellaneous Provisions Act 2023 earlier this year, there were no statutory provisions relating to remote working in Ireland. This legislation contains a right for employees to request remote working. However, although enacted, that part of the legislation has not yet come into force as a code of practice is being finalised which will include further details on remote working. Once in force, this legislation may be relevant to remote workers in Ireland.
Income tax
F. What is the employee’s exposure to local income tax, and under what circumstances is the foreign employer required to arrange for withholding of income tax?
All employees carrying out the duties of their employment in Ireland will be subject to income tax here as the source of the income will be deemed to be Irish. As indicated above, there are certain dispensations for ‘posted’ workers depending on the details set out in any Double Tax Agreement between Ireland and the country of residence of the employer. In terms of the employer obligations, as set out above, the foreign employer will be responsible for dealing with the employee’s income tax and related employment levies and PRSI through the PAYE system. A local payroll agent may need to be engaged to process payroll on the employer’s behalf.
In terms of any foreign employee’s wider personal taxation obligations of moving to Ireland, these would be ascertained in line with the employee’s residence, ordinary residence and domicile status.
An individual will be regarded as tax resident in Ireland for a tax year where they are present in Ireland for 183 days or more for the tax year commencing on 1st January and the following 31st December, or they are present here in the tax year and the previous tax year for 280 days or more in aggregate. However, in applying this test if an individual is present in Ireland for 30 days or fewer in a tax year then these days are ignored for aggregation purposes.
An individual will become Irish ordinarily resident once tax resident in Ireland for 3 consecutive tax years and will continue to be ordinarily resident for the three immediate years after they become non-resident in Ireland.
Domicile is a complex legal concept which essentially is the country which is considered to be a person’s permanent home and is distinct from legal nationality and tax residence. Where an individual is domiciled in Ireland then they will be taxable here on their worldwide income where they are resident here in any tax year, and where they are ordinarily resident but not resident here then they will be taxed on their worldwide income with the exception of any foreign employment/trading income and other income below €3,810. Where a domiciled individual is both non-resident and non-ordinary resident, they will taxable here on their Irish source income only. Non-domiciled individuals who are either resident or domiciled here will be taxable on their Irish source income and on the remittance basis for any non-Irish income.
Claim for workplace injury
G. Would the remote worker be entitled to bring a claim for workplace injury in your country?
Potentially yes, depending on the circumstances. In the Republic of Ireland, employers have a duty to take reasonable care of the health and safety of their employees and to take reasonable steps to provide a safe workplace and a safe system of work. These duties also extend to employees who are working remotely, including those from abroad. The employer should carry out a risk assessment in relation to an employee who will be working remotely in the Republic of Ireland in order to identify risks and hazards. This should include any risks associated with working remotely. Public health advice must also be adhered to.
Employees who suffer personal injury as a result of their employer’s breach of the duty of care may bring a claim for compensation in the Irish courts.
An employer who breaches health and safety requirements may be committing a criminal offence and may face a fine. In addition, employees who raise concerns about their working environment are also protected under Irish law and are entitled to make a claim if they suffer a detriment, and/or are unfairly dismissed as a result of raising a health and safety concern. The Safety, Health and Welfare at Work Act 2005 protects employees in the event of breach of duties by their employer and also protects them against penalization by their employer, with possible unlimited fines and imprisonment on conviction.
National healthcare system or insurance
H. Would the remote worker be covered under the local national healthcare system or insurance?
Persons who come to live, work or study in the Republic of Ireland and intend to stay for at least one year, are likely to be regarded as living here (ordinarily resident is the legal term) and to come under the rules on entitlement to health services. Entitlement to health services in Ireland is based on residency and means rather than on an individual’s payment of tax or national insurance. In general, an individual must be able to show the Health Service Executive (HSE) that they intend to live in Ireland for at least a year before they will be regarded as ordinarily resident and be eligible for either free or subsidised health services. The HSE may look for evidence that the individual is legally entitled to live here for at least a year.
Some visitors to Ireland are not entitled to free or subsidised public health services except in cases of hardship. For example, visitors from outside the EU/EEA, Switzerland and the United Kingdom (UK). In general, if they have to use health services, they must pay the full cost of those services. UK citizens have access to healthcare under the Common Travel Area while visiting Ireland. This arrangement has not been affected by the UK leaving the EU. Visitors from the EU/EEA and Switzerland can use a valid European health insurance card issued by their home country to access public healthcare in Ireland. Posted workers (workers employed in one member state and sent by their employer to work in another member state) are also eligible for medical cards under EU rules.
Data privacy and security
I. Is a foreign employer subject to data privacy and security requirements regarding protection of employee personal information for a foreign employee working remotely in your country?
Provided that the foreign employer does not have an “establishment” in the EU or does not target data subjects in the EU by offering goods and/or services to such data subjects, the fact that an employee of a foreign employer will work remotely from Ireland will not in itself engage any Irish law data protection requirements relating to that employee’s personal data. However, if the foreign employer monitors the behaviour of that employee while they are working remotely in Ireland (for example, their work activity is tracked online) or intends to monitor such behaviour then the requirements of Irish data protection law (including the General Data Protection Regulation or GDPR) may apply to such behavioral monitoring activities.
Foreign remote worker
J. Has there been any litigation or specific law or regulation regarding the foreign remote worker in your country?
Litigation
The Labour Court decision of Infosys Limited v Mr Shahid Shaikh, which relates to an employee who had been employed by Infosys India and was sent on a temporary assignment to Ireland to work for Infosys Limited (the “Respondent”), is relevant. In that case, the employee’s employment was terminated during his time in Ireland. The WRC initially held that it did not have jurisdiction to deal with the case, which led to the appeal to the Labour Court.
The Labour Court considered the meaning and intention of section 2(3)(a) of the Unfair Dismissals legislation which provides that – “This Act shall not apply in relation to the dismissal of an employee who, under the relevant contract of employment, ordinarily worked outside the State unless—(i) he was ordinarily resident in the State during the term of the contract, or (ii) he was domiciled in the State during the term of the contract, and the employer. …. had its principal place of business in the State during the term of the contract.”
The Labour Court held that it was clear that if an employee is living and working in Ireland for the period of a contract of employment, then they are covered by the Act. It also found that although the employee was going to be returning to India at some stage pursuant to the employment permit, it was an ‘indisputable fact that he lived and worked in Ireland while covered by the terms of that letter and that, while doing so, he was dismissed’. Accordingly, the Labour Court held that it had jurisdiction to hear the employee’s appeal of the WRC decision, which was then overturned.
This case highlights that even ‘exclusive jurisdiction’ clauses may be of little value when in reality on a daily basis an employee is living and working in Ireland.
Specific Law
We refer to the section on posted workers and proposed new rules on remote working above.
There may be regulatory or other compliance requirements to comply with in relation to certain occupations or types of work, e.g. financial services or insurance.
Citizenship
K. Would any of the above answers change if the remote worker (a) is a citizen of your country, or (b) engages in activity interacting with the local market?
From a taxation perspective citizenship does not impact on a person’s exposure to taxation in Ireland. A foreign employer will have payroll obligations in Ireland if it has workers carrying on the duties of their employment in Ireland irrespective of their citizenships, while as indicated above, the issues of residency, ordinary residency and domicile would be relevant in terms of determining an individual’s personal exposure to taxes in Ireland. In addition, the issue of citizenship does not impact on the question of the existence of a Permanent Establishment.
Taking in account of all of the foregoing, the details of any engagement in activities that involve interacting with the local market would need to be fully explored in order to address the question of the potential existence of a Permanent Establishment for the foreign resident employer.
If the individual is an Irish citizen, then no employment permit or visa would be required. A foreign employer would still however need to register with the Irish Revenue Commissioners.
