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Relevant Contracts Tax - RCT

(Commonly known as RCT or C45 Tax) - Short Guide

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Relevant Contracts Tax - RCT information - Tax Services from Westland Tax & Accountancy Ltd., Dublin, Ireland

Are you a Main Contractor or a Sub Contractor ?

RCT- Relevant Contract Tax formerly known a C45 tax has & continues to impose a large burden on Businesses in general. It applies to all manner of Construction Operations together with Meat Processing & Forestry. The legislation defines Construction Operations very widely and therefore if you are employing Subcontractors or you are being employed as a Subcontractor it will almost definitely affect you. It also applies to non resident Contractors or Sub Contractors carrying out work in this country. You can be both a Main Contractor & a Subcontractor. Failure to operate the system properly can and does lead to large penalties and interest being applied if audited.

RCT Changes

Since 1st January 2012 there has been major changes in the way the RCT system operates. All transactions must now be carried out through the Revenue Online Service –ROS. The main deduction rate is 20% and not 35% as it previously was. Tax withheld is offset against your returns as they are filed & no refunds are given until all your returns including your Income Tax or Corporation Tax Returns are filed

VAT & RCT

If you are a Subcontractor you should not charge VAT on your invoice to the Main Contactor. The invoice issued should replicate a normal VAT invoice but without a VAT amount being added. It should carry the endorsement that VAT on the supply is to be accounted for by the main contractor. You must register for VAT if your Turnover is above or will be above €37,500 in any 12 month period. Even though you do not charge VAT to the main contractor, providing you are registered you may reclaim VAT incurred by you on business expenses.

Local Property Tax & Tax Clearance

As many contractors rely on Tax Clearance Certificates to obtain contracts, they should be aware that failure to pay the new Local Property Tax will affect their Tax Clearance status, it will also delay any possible RCT refunds at year end, and will also result in their Income Tax Return being deemed to be filed late thereby incurring late filing surcharges.

Below is a quick guide to the current operation of RCT

This article is for general advice & guidance only you should always take professional advice particular to your circumstances. For further comprehensive information re the RCT visit revenue.ie, select taxes & duties, select Relevant Contract Tax.

To contact Westland Tax & Accountancy. Email info@wta.ie website www.wta.ie or contact Pat 086 8231823