What is the closing date for the submission of the FS7 & FS3 Documents?
The closing date for submission of annual reconciliation documents FS7 & FS3 is the 15th of February of the following year.
How are single parents to be included in the FS4 form?
On the FS4 form a single parent should mark box B2 and write in ink near it the words "single parent". To qualify for the married tax rates a single parent (unmarried, widow/er, separated) should satisfy the following conditions:
- Should have maintained a child who was not over 16 years of age within the year. If the child was over that age and was receiving full-time instruction or was incapacitated by infirmity from maintaining himself the single parent qualifies just the same but the child should not receive income of more than €2,400 in his or her own right;
- Should have been recognized by the Director of Social Security as the beneficiary of the Children’s allowance paid in respect of the child;
- Should not have received financial assistance for the maintenance of the said child from the other parent of the child;
- Should not have lived in the same house with the other parent of the child.
How can one fill in a couple's FS3s for the year in which they married?
A couple who gets married should decide upon who is going to be considered as the responsible spouse. The responsible spouse should have all the emoluments earned during the year of marriage in one single FS3 while the other spouse should inform his/her employer to issue two FS3 forms covering the pre- and post-marriage periods respectively.
How should one calculate the tax of a couple that separated during the year and how should the FS3s be drawn up?
As from basis year 2009, in the case where a couple has separated, both spouses are required to register separately as a taxpayer with the Inland Revenue Department. This may be affected by submitting the separation deed.
Each spouse will be responsible for filing his/her own Tax Return covering income earned from 1st January to 31st December. Each individual will be taxed as a single person and will be responsible to pay the relative tax on the income earned. Married rates will apply if the individual qualifies as a Single Parent.
How should alimony paid out directly from a salary be treated?
If the alimony is being paid to the spouse and not to the children, and as long as there is a public deed of personal separation or a decree by the Court, the employer may write to the Commissioner and request a reduction in the FSS rate in terms of rule 6(2) of the FSS Regulations 1998. A copy of the separation contract must also be presented. This approval is generally granted on the condition that:
- The alimony payment is made by the employer directly to the employee’s estranged spouse;
- That the whole amount of emoluments including the alimony payment should be reported on the FS3 of the employee and that the employee should complete an Income Tax and Self Assessment Form requesting a deduction in respect of alimony in the said form.
How should cents be rounded up?
Cents should be rounded up to the nearest euro. However in the case of part-time work the 15% tax on total annual income should always be rounded up to the next euro.
How should an employer tax an employee when an FS4 is not filled in?
In such cases the employer is bound by FSS Rules to deduct tax at the rate of 35% from the employee’s wage and remit the amount to the department.
How should director’s emoluments be treated for FSS purposes?
Director’s emoluments should always be reported under the FSS in respective of the fact that his social security is paid on a self employed basis.
Who may qualify for the 15% withholding tax on part-time income?
Income derived from part-time employment, may qualify for the deduction of 15% withholding tax provided it satisfies the following conditions:
- Employment is registered with ETC;
- Work performed is less than 30 hours per week;
- Employee does not hold an office in a board appointed by the Government;
- If the employee is employed full time and also performs part-time employment, the respective employers must not form part of the same organization or group of companies or;
- The individual performing the part-time employment is married and the spouse is a full-time employee.
In order to qualify, an individual must adhere to all conditions a, b, c, d and e or f. If not the case, emoluments earned from part time employment will be added or considered as the Main Income and taxed accordingly. Whenever the part time provisions apply, the maximum amount of income brought to charge should not exceed €7000. The part-time employment income over and above will be brought to charge as Main Income and must be declared in the tax return. This means that a maximum tax of €1050 is incurred on the part time employment.
It is the employee’s responsibility to decide as to whether the 15% part time withholding tax is deducted or not.
How can FSS tax be calculated?
One may calculate the FSS by using the spreadsheet found on the IRD website.
What procedures am I to follow when employing personnel?
If you are employing personnel, you should:
- Register as an employer with the Department;
- Submit the FS4 forms for each employee on commencement of their employment;
- Deduct from your employee’s emoluments any tax and Social Security Contributions (SSC) due;
- Remit these deductions to the Commissioner by the end of the month following that on which payment of emoluments was made. The payment is to be made by means of the FS5 form;
- Submit an annual Statement of Earnings (FS3) of all your employees together with the Annual Reconciliation Statement (FS7) by the 15th February of the following year;
- Inform the Department upon ceasing to be an employer (De-registration Form)
What shall I do when I stop employing personnel?
If a person ceases to be an employer he is required to de-register the PE Number by:
- Presenting FS3 and FS7 forms for the current year up to the date of cessation of being an employer;
- Submit any outstanding FS3 and FS7 documents for previous years;
- A nil FS7 has to be sent where no data is to be reported for any specific year
- Pay any outstanding balances with regards to tax and social security contributions, both employer and employee/s;
- Fill the de-registration form
If a company doesn’t pay wages or salaries and the directors receive only Fringe Benefits, is there any need for the company to be registered as an employer?
Yes. A company that provides fringe benefits only is required just the same to register as an employer and to send the necessary FSS forms to the department. The fringe benefit is considered as part of the emoluments that a director or an employee receives from the company.
Can FSS payments be effected every four months, like self-employed PT payments, especially where there are a small number of employees?
No. According to the provisions of the FSS Regulations, FSS payments should be effected by not later than the end of the month that follows the month in which they have become due. For example, if an employer deducts FSS tax and SSC for January, one has to submit the remittance together with the FS5 form by not later than the end of February.