Relevant contract tax is a withholding tax which applies to all those involved in construction, forestry, and meat processing operations. The legislation obliges the principal contractor to deduct 35 per cent tax from the amount payable to contractors/subcontractors engaged to carry out activities for which he/she does not hold a relevant payment card. In general, a principal contractor may include property developers, building companies, construction trades. Local authorities and public utilities companies established under statute are also deemed to be principal contractors. The principal contractor is also obliged to maintain records of all payments regardless of whether they have a relevant payment card on file for them.
From January 1, 2012, all RCT compliance will be conducted using the Revenue’s online service (ROS ) replacing the paper based system. All principal contractors will be mandatorily obliged to submit information, data, payments, and returns to Revenue electronically. The new system will have three different rates but only one rate is applicable at any point in time. Subcontractors who satisfy the current C2 card criteria will qualify for the zero rate, in limited cases the 35 per cent rate will apply, eg, subcontractors not registered with Revenue while all other contractors will be eligible for the standard rate of 20 per cent.
The Kilkenny County Enterprise Board is running a morning workshop next week entitled ‘Relevant Contract Tax – are you aware of the changes’ which will provide participants with practical advice on the new online RCT system. For further information visit www.kceb.ie or contact the offices at (056 ) 7752662, email enquiries@kceb.ie
