Here is a summary of the article detailing the updates to Ireland’s Special Assignee Relief Program (SARP):
Overview
The Irish government has extended the Special Assignee Relief Program (SARP) until December 31, 2030. SARP provides a partial income tax exemption for highly skilled, qualifying employees assigned to work in Ireland from an overseas company. It only applies to Irish income tax and does not reduce Universal Social Charge (USC) or Pay Related Social Insurance (PRSI) liabilities.
Key Updates (Effective January 1, 2026)
- Program Extension: Extended for five years through the end of 2030.
- Higher Salary Threshold: The minimum annual base salary required to qualify has been raised to €125,000 (previously lower). Variable pay like bonuses and share-based compensation cannot be used to meet this threshold.
- Application Flexibility: The strict 90-day application deadline has been eased. Employers can now submit the SARP certification between 91 and 180 days after the employee’s arrival. However, doing so means forfeiting the relief for the first tax year, reducing the maximum benefit period from five years to four.
How the Relief Works
For qualifying individuals, 30% of their qualifying employment income above €125,000 is exempt from Irish income tax, capped at a maximum qualifying income of €1 million.
Example:
- Base Salary: €200,000
- Income Subject to Relief: €75,000 (the amount over €125,000)
- Exempt Amount: 30% of €75,000 = €22,500 exempt from income tax
Core Eligibility Requirements
To qualify, the employee must:
- Be assigned by an overseas employer to work in Ireland for at least 12 consecutive months.
- Have worked full-time for that same overseas employer for at least 6 consecutive months prior to the assignment.
- Not have been an Irish tax resident for the 5 tax years preceding the assignment.
- Become an Irish tax resident during the period the relief is claimed.
