Professional Services Withholding Tax (PSWT)

Professional Services Withholding Tax (PSWT) is a tax on payments made by an 'accountable person' for particular professional services (provided by a 'specified person').

An accountable person must deduct PSWT at the rate of 20% from such payments.

Accountable persons include:

• government departments
• local authorities
• Health Service Executive (HSE)
• authorized health insurers
• commercial and non-commercial semi-state bodies
• any subsidiary of the above or a body funded by any of the above

Professional services 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

Payments excluded from PSWT

Examples include:

• payments to employees taxed through Pay As You Earn (PAYE)
• payments where Relevant Contracts Tax (RCT) applies
• payments between accountable persons
• payments to charities that have an Income Tax (IT) exemption
• payments made by the foreign branch or agency of an accountable person. Payments must be made abroad, for a service provided abroad by a service provider resident abroad
• inter group payments, for example payments between subsidiaries of the same company, or from a parent company to a subsidiary.

Services generally excluded from PSWT include:

• teaching, training or lecturing services
• translation services
• proofreading services
• stenography services
• setting and assessing oral, aural or written examinations
• contract cleaning services
• maintenance and repair work.

PSWT tax credit

If you are providing a professional service to a state or semi-state body, PSWT will be deducted from your fee. You are entitled to claim the tax withheld as a credit against your Income Tax (IT) or Corporation Tax (CT) in that tax year. You must also include the gross amount of tax that has been withheld on your Form 11 or Form CT1 tax return.

Form F45 - Proof of PSWT deducted

The company you are providing a service to should provide you with a Form F45 when they pay you. This form will confirm the total payment and the amount of PSWT that has been deducted.

To complete Form F45, the company will need:

• your Personal Public Services Number (PPSN) if you are registered as an individual
• your Tax Reference Number, if you are registered as a company
• your partnership's tax number, if you are a registered partnership

If you are non-resident, you must also provide the tax reference number that applies in your country of residence.