State and Semi-State bodies and their subsidiaries must deduct Professional Services Withholding Tax (PSWT) from the payments and expenses they pay to the providers of certain professional services. Organisations who receive funding from State or Semi-State bodies also fall under these rules.
Professional Services liable for PSWT
A summary of services where PSWT applies is available on the Revenue website. These include:
- medical, dental, pharmaceutical, optical, aural or veterinary services
- architectural, engineering, quantity surveying or surveying nature, and related services
- accountancy, auditing or finance services
- financial, economic, marketing or advertising services
- legal services
- geological services.
How does PSWT work?
If you provide professional services to State or Semi-State companies, then PSWT will apply and will be deducted from the payments you receive. VAT should not be included when calculating PSWT however where interest is charged (eg on a late payment for professional services), PSWT is deducted from the interest also.
The State company or Semi-State that receives your professional services must submit a Payment Notification using the Revenue Online Service (ROS), deduct 20% PSWT from your payment, and pay this PSWT over to Revenue. You can claim the tax withheld as a credit against your Income Tax or Corporation Tax liability in the relevant tax year.
Certain types of payments and expenses are exempt from PSWT. These include certain inter-group payments, certain foreign branch payments, certain payments made abroad, payments to employees that are subject to PAYE, payments that are subject to Relevant Contracts Tax and payments to charities that are exempt from Income Tax.
Need help with PSWT?
If you are a GroForth client receiving or providing professional services, our team can help you with your PSWT filings and/or claims. Contact us for details of our services.