Ireland's Revenue Commission earlier this month issued a reminder to contractors in the Republic affected by the Relevant Contracts Tax (RCT).

RCT must be applied to payments made by a 'principal contractor' to a subcontractor under a relevant contract, defined for these purposes by the Revenue as "a contract to carry out, or supply labour for the performance of relevant operations in the construction, forestry or meat processing industry". The tax applies to both resident and non-resident contractors in these sectors.

Under the RCT system, the principal contractor:

• Deducts tax at 35% from payments to subcontractors for whom the principal contractor does not hold a relevant payments card (Form RCT 47, on which the principal contractor records payments made without deduction of RCT); and
• Maintains a record of payments to all subcontractors regardless of whether he/she holds a relevant payments card for them.

In the notice issued earlier this month, the Revenue Commission reminded affected contractors that the filing date for form RCT35 (which deals with the return of payments to subcontractors for the year ended December 31) was February 15, and warned that:

"Revenue's compliance programmes that identify and pursue non-filers include the Form RCT 35. The RCT programme provides for the referral of RCT 35 non-filer offences for criminal prosecution."

It further warned that incorrectly completed forms would be returned for correction, potentially resulting in the return missing the filing deadline.

The tax authority went on to clarify that:

"If the Principal Contractor did not engage any sub-contractors during the period ended 31 December 2009, 'NONE' should be entered in the relevant box on the declaration."

"If the Principal Contractor has in fact ceased to be a Principal Contractor, a covering note to that effect should be submitted to the Principal’s local Revenue office to avoid unnecessary correspondence in the future."