AITI Chartered Tax Adviser

What is professional services withholding tax (PSWT)?

Professional services withholding tax (PSWT) must be deducted at the standard rate from payments made by an accountable person (a government department or State-funded body) for professional services of:

(a) doctors, dentists, pharmacists, opticians and veterinary surgeons,
(b) architects, engineers, and quantity surveyors,
(c) accountants, auditors, and financial, economic, marketing, or business consultants,
(d) solicitors, barristers and other legal agents,
(e) geologists,
(f) providers of training services on behalf of FAS.

PSWT may be set against your income tax liability for the tax year in the basis period in which the income arises.
You can claim an interim refund in respect of the excess of PSWT shown on forms F45 for the current year, over the tax liability for the immediately preceding tax year, less any arrears of VAT and PAYE/PRSI.

If you claim an interim refund for a start-up year (i.e., a tax year for which there is no immediately preceding tax year or accounting period), the interim refund is calculated as the lesser of:

(a) the withholding tax deducted in the claim period, (net of any refunds already made for the period), and
(b) E x (A/B) x (C/P) x standard rate of income tax,

E is the total business expenses for the basis period,
A is the total income on which withholding tax has been suffered for the claim period,
B is the total (expected) trading or professional income for the basis period,
C is the is the number of months in the claim period, and
P is the number of months in the basis period.