TAX CREDIT (PERSONS RETURNING TO EMPLOYMENT) RULES

TAX CREDIT (PERSONS RETURNING TO EMPLOYMENT)

SUBSIDIARY LEGISLATION 123.81

TAX CREDIT (PERSONS RETURNING TO

EMPLOYMENT) RULES

1st January, 2005

LEGAL NOTICE 110 of 2005, as amended by Legal Notices 4 of 2006,

130 and 409 of 2007, 67 of 2008, 104 and 193 of 2009, 208 of 2014 and

316 of 2016.

The title of these rules is the Tax Credit (Persons Returning

to Employment) Rules.

In these rules

"employment" means employment either as an employee or as a

self-employed person

Provided that the employment for at least twenty-four

consecutive months mentioned in rule 2 shall mean only

employment as an employee.

These rules apply in any one of the following cases

(a) where a person, who has not attained the statutory

retirement age and who returns to employment on or

after the 1st January, 2008 after having been absent

from any gainful occupation for at least five years

immediately preceding the date of the said return to

employment and whose name was not during the said

time on the unemployment register (Parts 1 and 2) as

established by Jobsplus and who has never been, prior

to the date of the said return to employment, in receipt

of a pension in view of past employment and who,

moreover, had previously been in employment for at

least twenty-four consecutive months; or

(b) where a woman has a child or children who is or are

under sixteen years of age and returns to employment

on or after the 1st January, 2008 after having been

absent from any gainful occupation for at least five

years immediately preceding the date of the said

return; or

(c) where a woman has a child or children born on or after

the 1st January, 2007 and continues in employment, or

returns to employment on or after the 1st January,

2007.

(1)(a) Any person to whom rule 2 applies, including a

married woman who, or whose spouse has, opted for a

separate computation for the purposes of article 50 of

the Income Tax Act, hereinafter referred to as "the

Act", and who is chargeable to tax at the rates specified

in article 56(1)(b) of the Act, shall benefit from a tax

TAX CREDIT (PERSONS RETURNING TO EMPLOYMENT)

credit of two thousand euro (€2000) which shall be set-

off against the tax in respect of gains or profits from

the said employment

Provided that in the case of applicability under rule

2(b) or 2(c), a woman shall benefit from a tax credit as

aforesaid in respect of every child as mentioned in rule

2. (b) The tax credit as aforesaid may only be set-off against

the tax on employment income referred to in rule 2 but

may be availed of over a period of two consecutive

years of assessment commencing from the year of

assessment during which the return to employment

occurs. It shall not be available as a set-off against the

person’s other sources of income, if any, or against her

or his spouse’s income

Provided that in the case of a woman who qualifies

under rule 2(b) or 2(c), the tax credit may be availed of

over a number of consecutive years not exceeding the

number of children plus one but shall in any case not

exceed €2000 in any one year

Provided further that where a woman is availing

herself of the tax credit as aforesaid after qualifying

under rule 2(a) or 2(b) and becomes entitled to a

further tax credit under rule 2(c), the new tax credit

shall commence in the final year in which the tax

credit under rule 2(a) or 2(b) is available but shall not

exceed €2000 in any one year

Provided also that in the case of a woman who

qualifies under rule 2(c) in the year 2007, the tax

credit shall commence from the year of assessment

2009. (c) The income in respect of which a tax credit is granted

under these rules shall be deemed to constitute the first

part of that person’s total income for the relative year

of assessment.

(2)

(a) Any person to whom rule 2 applies and who is

chargeable to tax jointly with his or her spouse at the

rates specified in article 56(1)(a) of the Act, shall

benefit from a tax credit of two thousand euro (€2,000)

which shall be set-off against the tax on that part of the

total income of the married couple representing her

employment income

Provided that in the case of applicability under rule

2(b) or 2(c), a woman shall benefit from a tax credit as

aforesaid in respect of every child as mentioned in rule

2. (b) The tax credit as aforesaid may be availed of over a

period of two consecutive years of assessment

commencing from the year of assessment during which

the return to employment occurs

TAX CREDIT (PERSONS RETURNING TO EMPLOYMENT)

Provided that in the case of a woman who qualifies

under rule 2(b) or 2(c), the tax credit may be availed of

over a number of consecutive years not exceeding the

number of children plus one but shall in any case not

exceed €2,000 in any one year

Provided further that where a woman is availing

herself of the tax credit as aforesaid after qualifying

under rule 2(a) or 2(b) and becomes entitled to a

further tax credit under rule 2(c), the new tax credit

shall commence in the final year in which the tax

credit under rule 2(a) or 2(b) is available but shall not

exceed €2,000 in any one year

Provided also that in the case of a woman who

qualifies under rule 2(c) in the year 2007, the tax

credit shall commence from the year of assessment

2009. (c) The income in respect of which a tax credit is granted

under these rules shall be deemed to constitute the last

part of that married couple’s total income for the

relative year of assessment.

(1) Notwithstanding the provisions of rule 3, any woman

to whom rule 2(b) or 2(c) applies may opt for a tax credit instead of

the one mentioned in rule 3, in respect of each child, equivalent to

the tax chargeable on the gains or profits from the employment

referred to in rule 2 earned in the year of return to employment, and

this tax credit shall be set-off against the said gains or profits for

the year

Provided that the credit as aforesaid may not exceed €5000

Provided further that in the case of a woman to whom rule

2(c) applies and who returned to employment in the year 2007, the

tax credit shall be availed of in the year of assessment 2009.

(2) Where a woman qualifies for a tax credit in respect of more

than one child at the time of the exercise of the option referred to in

sub-rule (1), the tax credit shall be availed of in consecutive years

until exhausted and the option in that respect cannot be revoked.

(3) The income in respect of which a tax credit is granted in

terms of the option referred to in sub-rule (1) shall be deemed to

constitute the first part of that woman’s total income for the relative

year of assessment.

(4) Where a woman exercises the option referred to in sub-rule

(1), she shall be chargeable to tax on all her income at the rates laid

down in article 56(1)(b) of the Income Tax Act, for the year or

years in which the tax credit in accordance with the said option is

availed of.

(5) The option referred to in sub-rule (1) shall be made on the

prescribed form submitted with the tax return for the year of

assessment in respect of which it is exercised.

TAX CREDIT (PERSONS RETURNING TO EMPLOYMENT)

(1)

Rule 2(b) and (c) applies also to cases where a child is

adopted.

(2)

In the case where rule 2(b) or (c) applies

(a) only one woman can avail herself of the tax credit,

granted under rules 3 and 4, in respect of each child;

(b) a woman can avail herself of the tax credit granted

under rules 3 and 4 only once in respect of each child.