Construction Industry Tax Procedures

The construction industry has its own set of tax regulations and requirements.

These can initially appear complex.

All contractors need to be aware of these regulations and comply with their terms.

What is a Construction Contract?

A construction contract is defined as a contract whereby the contractor carries out construction operations or provides labour for the carrying out of such operations.

At the beginning of each tax year new certificates of authorisation (C2) are issued by the Revenue Commissioners. These certificates are valid for a period of 12 months.

All payments for construction work are liable to the construction industry tax unless the payee holds a valid C2 certificate and the contracting authority also holds a Construction Payments Card (Form C47) for the contractor.

If the contractor does not have a C2, he or she can produce a Tax Clearance Certificate or a Statement of Suitability (for non-residents).

Payments are processed in either of two ways:

  • if the contractor holds a C2 then the gross amount is recorded on the Construction Payments Card and full payment is made
  • if the contracting authority does not have a C2, but has a Tax Clearance Certificate or Statement of Suitability. Payment will be made less the deduction of tax at the standard rate. In these circumstances, tax at a rate of 35% is deducted from the gross amount due.

For more information visit the Irish Revenue website

Irish Revenue

 

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