Relevant Contracts Tax Changes - January 2012
A new RCT system is being introduced
on 1st January 2012. The key features of the new system are as
follows:
RCT applies to payments made by a principal
contractor to a subcontractor under a relevant contract. It applies
to both resident and non-resident contractors operating in the
construction, forestry or meat processing industry.
It is a tax deduction system where the contractor deducts tax and
maintains a record to all the subcontractors.
All communications between the principal
contractor and the Revenue will now
be online only.
There will be no paper alternative; all principal
contractors will have to be registered on ROS.
From January 2012 the deduction can be 0%, 20% or 35% and all
the RCT paper forms will be substitute with a new electronic RCT
system.
The main change for Contractors in the new system is the
mandatory electronic communication with the Revenue and not annual
return is required (old RCT 35)
One of the main changes for the subcontractors is that they will
no longer have to submit RCTDC claims to Revenue.
Every time a principal enters into a new contract
with a subcontractor, he must notify the Revenue Commissioner about
it and give the relevant details. This is called
contract notification and must be
completed online. The Revenue will acknowledge the
notification and will then advise the principal contractor of what
rate of RCT applies to that particular subcontractor.
You can engage with the Revenue electronically with the
following options: ROS online (RCT Service) , ROS offline
application or your in-house accounting system.
The Revenue has made available a set of videos that explains the
RCT system in this link http://www.revenue.ie/en/tax/rct/online-information-session.html
If you wish to process RCT manually in Sage 50
please download our Knowledgebase Article click
here. This will require you to submit your RCT returns
manually via ROS offline.
Sage 50 and Sage 200 has a Construct module that
compliance with the New RCT system. To find more information
contact us 1890 88 25 22.
For more information please see Revenue: http://www.revenue.ie/en/tax/rct/new-system-faqs.html
Email: roshelp@revenue.ie
Tel: Lo call 1890 20 11 06
Or from abroad telephone +353 1
7023021