Ireland Fact-File Part 6:
Individual Business Employment Issues

6.5 Ireland Business Owner Employment and Invoicing Rules

The employment by a business of its owner

A business can employ its owner, but a number of the benefits that would be afforded to an ordinary employee, for example the PAYE credit, are not available to a proprietary director (defined by the Revenue as:  “ the company's beneficial owner or director who can control directly/indirectly more than 15% of company's ordinary share capital”).

Benefits in kind (such as subsidised accommodation, provision of a company car, and loans offered on preferential terms by employers) are generally taxable above an EUR1,905 threshold. However, if the employee in question is the director of the company, such benefits are taxable in all instances, as are any other incidental payments or benefits.

Invoicing your business: Rules governing the use of various corporate devices to distance an owner from his business income for tax purposes are not so developed as they are in the UK, but following the introduction of the 12.5% corporate income tax rate, legislation was put in place to prevent the ‘parking' of income in companies in order to benefit from the lower rate in the majority of circumstances, so a personal services company is unlikely to be useful for an Irish resident individual.

Introductory Guides

Brief, clearly written summaries with links to relevant sections of the Fact-File. The Fact-File itself is linked in full below.

Ireland Artist Tax Guide

Ireland Contractor Tax Guide

Ireland Entrepreneur Tax Guide

Ireland Professional Tax Guide

Ireland Small Business Tax Guide

Ireland Sportsperson / Entertainer Tax Guide

Fact-File

Part 1: Business Formation for Individuals

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