Taxes Consolidation Act 1997 section 530H

Standard rate subcontractor

Section 530H sets out the conditions a subcontractor must satisfy in order to qualify for deduction of tax at the standard rate (20%) from relevant payments under the relevant contracts tax (RCT) system.

• The subcontractor must operate from a fixed place of business in a permanent building, hold adequate equipment and stock, keep proper business records, and have been substantially tax-compliant over the previous three years across income tax, corporation tax, capital gains tax and VAT.
• A non-resident subcontractor must have maintained proper records and been substantially compliant with comparable tax obligations in the country in which he or she was resident during the previous three years.
• A subcontractor who carries out relevant contracts in partnership does not qualify unless the partnership itself has met the compliance conditions and Revenue is satisfied it will continue to do so; nor does a subcontractor qualify where Revenue considers that deductions at the standard rate would be insufficient to cover his or her income tax liability for the year.
• Revenue may nonetheless treat a subcontractor as qualifying where it is satisfied that any matter which would otherwise disqualify the person ought, in all the circumstances, to be disregarded.