Professional services withholding tax (PSWT) applies in Ireland to payments made by accountable persons i.e. public bodies, government agencies, and semi-state companies for certain professional services including medical, legal and financial.
Currently when an accountable person pays a service provider for certain professional services, PSWT at 20% is withheld from the payment. The 20% PSWT deducted is remitted to Revenue and the service provider is issued with a paper Form F45 detailing the payment and the amount of PSWT deducted.
This has caused difficulties in the past if for example the forms are lost as replacement forms are required in order for a refund claim to be made to Revenue. This has resulted in additional work for both parties and potential cash flow issues for the service provider.
From 1 July 2021 all accountable persons will record all PSWT payments through an online payment notification system via ROS which will include details of the service providers income tax/corporation tax number and country of residence. On receipt of the payment notification, Revenue will issue a payment notification reference number to acknowledge receipt.
Accountable persons will be able to review payments submitted and batch uploads will be facilitated via uploading a csv file. The due date for filing the monthly return and for remitting the PSWT deducted to Revenue is the 23rd day of the month following the month in which the payment notification is made.
In addition accountable persons are required to file an annual return to Revenue which will detail all relevant payments and associated PSWT deductions made during the tax year. The filing deadline for this return is the 23rd February of the following tax year.
Service providers will be able to view details of payment notifications relating to them when they log into their individual ROS accounts. This should ease the process of obtaining tax refunds with paper Forms F45 no longer being required.