RCT for construction subcontractors: invoicing in Ireland
How Relevant Contracts Tax affects payments and invoices between principal contractors and subcontractors.
Relevant Contracts Tax (RCT) is a withholding tax on certain payments by principal contractors to subcontractors in construction, forestry and meat processing. Revenue sets the rate for each subcontractor at 0%, 20% or 35%, depending on their tax compliance record. The principal notifies Revenue before each payment and receives a deduction authorisation showing the rate. For a subcontractor, your invoice states the gross amount. The tax is withheld from the payment, not deducted on the invoice.
- RCT applies to relevant contracts in construction, forestry and meat processing.
- Rates are 0%, 20% or 35%, set by Revenue from your compliance record.
- The principal notifies Revenue before each payment.
- Invoice the gross amount; the RCT is withheld at payment.
How it works
Check the contract. RCT applies only to relevant contracts. Revenue's guidance defines them.
Register as a subcontractor. Your compliance record determines your rate.
Invoice the gross amount. Show the work, the net amount, the VAT treatment and the total, as on any invoice.
Principal notifies Revenue. Before paying, the principal submits a payment notification and gets a deduction authorisation.
Keep the records. Match each payment, deduction and invoice for your tax returns. Ask Revenue or your adviser about VAT on construction services supplied to a principal.
Legal basis
- Revenue guidance: Relevant Contracts Tax (RCT).
- Taxes Consolidation Act 1997 (as amended), RCT provisions.
- Revenue guidance: VAT records, invoices and credit notes.
Frequently asked questions
What are the RCT rates in Ireland?
0%, 20% or 35%, depending on the subcontractor's tax compliance record with Revenue.
Do I deduct RCT on my own invoice?
No. You invoice the gross amount. The principal contractor withholds any RCT when paying you, using the deduction authorisation from Revenue.
Who must notify Revenue about the payment?
The principal contractor, before each payment to a subcontractor.
Does RCT change how I charge VAT?
VAT on construction services supplied to a principal contractor may be treated differently. Check Revenue's guidance or ask your adviser, and state the treatment on the invoice.
Does 4invoices handle RCT or connect to Revenue's eRCT?
No. 4invoices creates invoices with a VAT rate per line, in any currency, with PDF download. It does not connect to Revenue, does not submit RCT notifications and does not calculate deductions.