All payments for professional services are liable to Withholding Tax, with the exception of those notified by the Inspector of Taxes or the Revenue Commissioners (notably, training).
Under the scheme contracting authorities must deduct tax at source from payments for professional services at the “standard” rate of tax.
The scheme operates on a monthly basis from the 6th of a month to the 5th of the following month.
All tax deducted is paid to the Collector General on the 15th of each month, including details of each individual/firm from which tax was deducted and the amounts deducted.
Companies providing services are required to provide their income or corporation tax number, and, if relevant, their VAT registration number.
“Withholding Tax” is deducted at the standard rate of Tax from the gross amount of payment exclusive of VAT.
There is generally no reduction in the amount liable in respect of expenses incurred in providing the professional services.
When the company receives their payment or payment notification a certificate will accompany it entitled “Withholding Tax From Payments for Professional Services” (Form F45).
If the company’s tax affairs are in order, then the certificate can be submitted to the Revenue Commissioners and a refund of the Withholding Tax will be provided.
The Revenue Commissioners website contains many explanatory leaflets and documents on the tax issues discussed above and can be accessed at the Irish Revenue webite
