What does Ordinarily Resident mean from a tax perspective?

You become a resident of Ireland when you spend at least 183 days there is a tax year (January 1 to December 31), or a total of at least 280 days in the current tax year and the preceding year.

A day is counted if the individual is present in Ireland for any part of a day. The purpose of their presence is irrelevant. An individual can elect to be resident in Ireland for a tax year provided they can satisfy Revenue that they are in Ireland with the intention and in such circumstances that they will be resident in Ireland in the next tax year.

Ordinarily Tax Residency

An individual is regarded as ordinarily resident in Ireland for a tax year if they have been an Irish resident for each of the three preceding tax years. Once they become ordinarily resident in Ireland, they do not cease to be ordinarily resident for a tax year unless they have been a non-resident of Ireland for each of the preceding three tax years.

Why is all this important?

There are significant tax implications for you depending on what country you are resident, originally resident or domiciled. If you are resident or ordinarily resident in Ireland, but not domiciled here, you are subject to income tax and capital gains tax on a remittance basis. 

This means that liability to income tax on income arising outside Ireland is limited to amounts of foreign income you remit into Ireland either actually or constructively. Gains on the selling of assets situated outside Ireland will be taxed on amounts of disposal proceeds you remit into Ireland, again either actually or constructively. So depending on the tax rules on where you are domiciled you may have no requirement to pay tax on this foreign income earned while you are non-domiciled in Ireland.

If you are returning to Ireland and want to learn more about tax residency, check our blog on “Returning to Ireland and Irish Tax Residency”.

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