RE: Non Resident Landlord Withholding Tax (NLWT) 12 May 2023

RMcH states: New rules coming In for Non Resident Landlord. Below is a recent letter recieved from the revenue in relation to Non Resident Landlord Withholding Tax (NLWT)

To whom it concerns,

You have been identified as a non resident landlord based in your 2022 period return. I am writing to update you about the introduction of the Non Resident Landlord Withholding Tax (NLVVT) system, which shall be launched on ROS and myAccount from 1 July 2023.

Section 92 of the Finance Act 2022 (a copy is attached) provides for several updates including:

-              collection agents who act for a non resident landlord may deduct withholding tax at the standard rate of income tax (currently 20%) from rent payments to non resident landlords and remit that amount to Revenue. (Tenants must also deduct the 20% amount),

-              the relieving of such collection agents from being chargeable to tax in Ireland for such income, as was the case,and.

-              the submission of additional information, from collection agents, tenants and others who pay rent directly to non resident landlords, to Revenue to ensure the withholding payment can be correctly credited to the landlord.

I want to advise you about the planned changes, and the timeframe for those changes. Further information about the planned system development and specifications will be published on an NLVVT information portal on the Property section of the Revenue website here: httos://www.revenue.ie/en/prooerty/rental income/non resident landlords/index.asox

This section of the website will be updated on an ongoing basis over the next few months. A Tax and Duty Manual on NLVVT will be published there shortly, and this manual will outline the new system in greater detail.

As a non resident landlord you are obliged to confirm certain information to either your collection agent or tenant to enable them to fulfil their obligations under the new legislation. Among others, the two key items of information include: 

•              confirmation of your non residency status to your collection agent or tenant

•              confirmation of your Tax Reference number (noting Income tax or Corporation Tax as appropriate) to your collection agent (if you have one), and the LPT ID of the rental property to either your collection agent or tenant

These identifiers will enable your collection agent or tenant to make Rental Notifications on the new system which ensures the withheld payments will be credited to you when you make your annual return.

Changes from 1st July 2023

Changes for landlord

-              Removal of all current derogations

-              Visibility of deductions made and the capacity to claim credits from withheld payments

                                Responsible for filing the annual tax returns   Form 11 or Form CT1 (as appropriate)

Changes for collection agent

-              No longer designated as chargeable, that is not responsible for filing a Form 11/Form CT1 for the rental income.

-              Withhold and remit 20% with a Rental Notification (RN) via a new withholding tax platform which will be available on myAccount and ROS

-              RNs can be made in bulk

Withhold and remit 20% with a Rental Notification (RN) via a new withholding tax platform which will be available on myAccount

Other facilities in the new system include functionality to:

extract a CSV file on all Rental Notifications made affecting a landlord

•              search for Rental Notifications

•              generate a PDF acknowledgement of a Rental Notification

claim a Rental Notification as the landlord's (using the relationship as owner of the property designated by LPT ID)

If you have any queries in relation to this new development, you can email the NLVVI development team directly at info NLVVT(asevenue.ie.

Yours sincerely

The NLVVT development team.

Amendment of section 1041 of Principal Act (rents payable to non residents)92. (1) The Principal Act is amended in section 1041—

(a)                          in subsection (1), by the insertion of "(referred to in this section as the 'nonresident person') and where the person making the payment provides the Revenue Commissioners with the information specified in subsection (lA)" after "whose usual place of abode is outside the State",

(b)                          by the insertion of the following subsection after subsection (1):

                "(1A) The following information is specified for the purposes of subsection(1):

(a)                          the name and address of the non resident person;

(b)                          the address of the property in respect of which the payment referred to in subsection (1) is made, including the Eircode in respect of the property;

(c)                           the unique identification number assigned to the property for the purposes of the Finance (Local Property Tax) Act 2012;

(d)                          the date the payment referred to in subsection (1) is made to the non resident person;

(e)                          the gross amount of the payment referred to in subsection (1);

(f)                           the amount withheld from the payment referred to in subsection (1) and remitted to Revenue in accordance with section 238.

                (1B) (a) Subject to paragraph (b), section 1034 shall not apply to—

(i)                            tax on profits or gains chargeable to tax under Case V of Schedule D, or

(ii)                           tax on any of the profits or gains chargeable under Case IV of Schedule D which arise under the terms of the lease, but to a person other than the lessor, or which otherwise arise out of any disposition or contract such that if they arose to the person making it they would be chargeable under Case V of Schedule D, where the trustee, guardian, committee, attorney, factor, agent, receiver, branch or manager of the non resident person provides the Revenue Commissioners with the information specified in

                subsection (1C).

                (b) Section 238 shall apply in relation to a payment referred to in subsection (1) due to a non resident person which is made to the trustee, guardian, committee, attorney, factor, agent, receiver, branch or manager of that non resident person, as it applies to other payments, being annual payments charged with tax under Schedule D and not payable out of profits or gains brought into charge to tax.

                (1C) The following information is specified for the purposes of subsection(1B):

(a)                          the name, address and tax reference number of the non-resident person (being, in the case of an individual, his or her personal public service number (within the meaning of section 262 of the Social Welfare Consolidation Act 2005) and, in the case of a company, the reference number stated on any return of income or notice of assessment issued to the company by the Revenue Commissioners);

(b)                          the address of the property in respect of which the payment due to the non resident person is made, including the Eircode in respect of the property;

(c)                           the unique identification number assigned to the property for the purposes of the Finance (Local Property Tax) Act 2012;

(d)                          the date the payment is due to the non resident person in respect of the property;

(e)                          the gross amount of the payment due in respect of the property;

                and

                (c) in subsection (2), by the substitution of "subsection (1) or (1B)" for "subsection (1)" in both places

                where it occurs.

(2) Subsection (1) shall come into operation on such day as the Minister for Finance may appoint by order.