Revenue has declared a forthcoming alteration in the tax legislation for Ukrainians working remotely in the UK, as a result of the Russian invasion in February 2022. Until now, these employees along with their Ukrainian employers, had not been subjected to the same tax rules as other international remote workers.
However, this is poised to change, as Revenue has informed accountants and tax professionals of modifications taking effect from the start of the upcoming year. According to Revenue, “The preferential tax treatment will end effective January 1st, 2025. Consequently, employees based in Ireland, as well as Ukrainian employers, will have to adhere to the Irish tax regulations pertaining to the exercising of Ukrainian jobs in Ireland.”
The current concessions will persist for the tax year 2024, upon fulfilment of the qualifying conditions, Revenue confirmed. Ukrainians on temporary protection, residing here and working for Ukrainian companies, have been granted several concessions since April 2022, including exemption from Irish income tax and the universal social charge on income from Ukrainian employment.
Moreover, Ukrainian employers aren’t obligated to implement the PAYE system on such income. The presence of these workers has been dismissed by Revenue for corporate tax purposes for any Ukrainian-resident company, where the employee or service provider would have continued to be present in Ukraine if not for the ongoing conflict.
Revenue nevertheless urges any individual or relevant entity making use of these concessions to retain proof to support compliance with the qualifying criteria. Under usual circumstances, a non-Irish employment that is performed in Ireland is liable for income tax and USC and falls within the PAYE system of income tax deduction at source.
The preferential tax treatment was extended for 2023 and 2024 but this will be revised from January 2025. According to the Central Statistics Office, no records have been maintained of Ukrainians working remotely in the UK.