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Revenue introduced a mandatory electronic RCT system on 1st January 2012.  All payments made by Principal Contractors, even if the contract commenced prior to 1 January 2012, must  be made under this new system.  The current paper based system is replaced by an electronic system.  There will no longer be C2 payment cards, RCT 1, RCT 46/ 46A or RCT 47 forms and the annual RCT 35 will no longer be required.

There are three rates under the new system based on the history of compliance of the sub-contractor:

Subcontractors who are registered for RCT in the old system are automatically registered for RCT in the new system if they are registered for ROS.  If not registered, Principals should register immediately.

Operation of the new system

When a principal enters a new contract the revenue must be notified online (Contract Notification).  Revenue will acknowledge the notification and advise the rate of tax applicable to the subcontractor.  

Immediately before making a payment under the contract, the principal must notify Revenue and state the gross amount to be paid (Payment Notification).

Upon receipt of the payment notification, Revenue will issue a Deduction Authorisation to the principal setting out the rate of tax and the amount of tax to be deducted.

On making the payment to the subcontractor the principal must give a copy of the Deduction Authorisation to the subcontractor.

Revenue will issue a Deduction Summary to the principal either monthly or quarterly listing all payments the Revenue has been made aware of.

The contents of this publication are to assist access to information and do not constitute legal or other advice.
Attribute to Susan Bryson, Partner in the Construction practice at Mason Hayes & Curran.  For more information, please contact Susan on sbryson@mhc.ie or + 353 1 614 5000. The content of this article is provided for information purposes only and does not constitute legal or other advice.  Mason Hayes & Curran (www.mhc.ie) is a leading business law firm with offices in Dublin, London and New York.
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