RCT for Subcontractors in Ireland: Registration, Deduction Rates and Credit

If you are a subcontractor working for a principal contractor in construction, forestry or meat processing, Relevant Contracts Tax (RCT) decides how much of each payment you receive up front. This guide covers, from Revenue's own pages, how you come to be on the system, how the deduction rate of 0%, 20% or 35% is set, what to do to improve it, how deductions are credited against your tax liabilities, and what to do if something looks wrong. Tax clearance is a separate Revenue process (see our guide to tax clearance certificates). Rates and procedures change, so check the current position on the official pages and take advice for your own situation.

Who is a subcontractor for RCT

Revenue's page "RCT for subcontractors" (published 19 May 2026) says you are a subcontractor if you enter into a relevant contract with a principal contractor to carry out work in the construction, forestry or meat processing industries, and the contract is not a contract of employment. The distinction matters because RCT applies only to contracts that are not contracts of employment. Revenue's principal contractor guidance refers to the five questions from the Supreme Court's Karshan judgment for that decision.

How you get on the system: the principal registers the contract

As a subcontractor you do not register for RCT in the same way a principal does. The process starts with the principal. Revenue's page says you must give the principal the details they need to register the contract, including the name recorded with Revenue and your Tax Reference Number (TRN). You should also provide proof of identity, such as a passport copy, a driving licence or details of your tax registration.

Once the principal notifies Revenue, you receive a contract confirmation letter with the contract details and your RCT rate. If any details are wrong, ask the principal to correct them; if they cannot, contact Revenue directly. The principal receives a Site Identifier Number (SIN) for the site or project, shown on your confirmation letter. If you subcontract part of the work, use that SIN when notifying Revenue.

Tax and Duty Manual Part 18-02-05 (last updated October 2024) adds some points. If Revenue cannot verify a subcontractor's identity, the principal must tell them in writing within 7 days or before the next relevant payment, whichever is earlier, that 35% will be deducted and that they should contact Revenue. A subcontractor who is not yet registered for RCT is registered automatically on the system, according to the manual. Subcontractors do not have to register for ROS unless obliged under the Mandatory efiling Regulations, but those who do can use ROS to view their rate or request a rate review.

How the deduction rate is set

Revenue's subcontractor page gives three rates, tied to your tax compliance record:

• up-to-date tax compliance record: 0%
• substantially up-to-date tax compliance record: 20%
• a poor tax compliance record, or not registered with Revenue: 35%

Check the current rates on the official page. The Tax and Duty Manual explains the criteria in more detail (sections 530E, 530G and 530H of the Taxes Consolidation Act 1997 are cited). For the zero rate, it lists:

• being, or being about to become, a subcontractor in relevant operations
• carrying on the business from a fixed place established in a permanent building
• keeping proper and accurate business records
• complying with all the obligations imposed by the Tax Acts throughout the previous 3 years
• Revenue considering it likely that you will comply in future

The 20% rate uses the same categories, but compliance must be met substantially rather than in full. The manual says 35% applies where you do not qualify for the other rates, are not registered with Revenue, have one or more returns outstanding for 12 months or more, or where Revenue forms the opinion that deductions at the standard rate will not be sufficient to cover your tax. New registrations are granted 20% automatically, and the manual says this can move to zero if Revenue agrees the three-year period should be disregarded.

The manual also covers different structures. For partnerships, the business and each partner are assessed and the highest rate applies. For companies, each director and anyone who owns or controls more than 15 per cent of the ordinary share capital must meet the record keeping and compliance conditions. Revenue may disregard a requirement if satisfied that it ought to be disregarded in the circumstances.

Tax clearance and your RCT rate

Revenue's subcontractor page and Tax and Duty Manual Part 18-02-05 do not use the term tax clearance. Revenue's page links the deduction rate to the tax compliance record. The manual says the reasons for a 20% or 35% rate are shown beneath the current rate, including which returns are outstanding and what liabilities are owed. Tax clearance is a separate Revenue process, which is covered in the guide linked above. Our suggestion: if a principal or client asks for one, check with them and Revenue what they require.

Improving or challenging your rate

Revenue carries out rolling RCT Bulk Rate Reviews. If your rate changes, a notice of determination is sent to your ROS inbox. To review it, Revenue's page says to resolve the compliance issues in ROS, wait at least 72 hours, then self-review your rate in ROS. If issues cannot be resolved there, use MyEnquiries in ROS with the category "Relevant Contracts Tax (RCT)" and sub-category "RCT Rate Review".

The manual describes the self-service route as "Manage Relevant Contracts Tax", then "Lookup/Review Deduction Rate". The reasons for any 20% or 35% rate are shown beneath the current rate. To improve it, the manual says to file outstanding returns, pay liabilities or make arrangements with the Collector-General's office, then request a review. There is a limit on the number of self-reviews in a period. If a caseworker has amended the rate with an end date, which can be up to one year ahead, self-reviews will not change it until that date passes.

A formal appeal is possible under section 530I(3): the manual says to the Appeal Commissioners within 30 days of the date of the determination. While an appeal is pending, Revenue may still issue deduction authorisations that the principal must follow. These are the manual's October 2024 details, so check the current process.

How RCT deducted is credited to you

Revenue's page "Credit for RCT deducted and offsets" (published 19 May 2026) says Revenue automatically credits your tax record with RCT a principal has deducted, and you do not need to request it. Once a return is filed and the liability falls due, the system offsets the credit:

• PAYE (employers): after the monthly return is filed, against the declared liability.
• Income tax or corporation tax: after the annual Form 11 or CT1 is filed. To apply the credit to a preliminary tax liability you must first submit a preliminary tax declaration.
• VAT: after the VAT3 return is filed.

Automatic offsets occur no later than seven days after the liability's due date, and Revenue sends a statement of account to your ROS inbox. For periods covered by debt warehousing or an instalment arrangement, you must use MyEnquiries to request an offset. The page does not address repayment.

The manual does. It says section 530P governs the treatment of tax deducted by a principal from payments to a subcontractor. After the relevant period is finalised, any remaining credit goes first to the next period's preliminary tax, then to other liabilities. No repayment is made during the tax year of deduction until your Form 11 or CT1 is filed, an assessment issues and all liabilities are discharged. Non-resident subcontractors claim through the International Claims Section.

If a deduction looks wrong

Revenue's page does not directly address incorrect deductions, but it covers correcting contract details with the principal and disputing your rate through ROS or MyEnquiries. The manual adds that if a principal does not submit a payment notification, or does not apply the deduction authorisation correctly, the deduction is not RCT, and the principal faces penalties and must submit an unreported payment notification. Where a principal underpays and says this is RCT-related, the manual says the subcontractor must pursue the principal directly.

Our suggestion: keep a record of each payment (date, amount, deduction, principal's name) alongside the deduction authorisation details. The manual says to keep such records, and they make a query to the principal or Revenue much quicker to resolve. If you want the principal's side of the process, see our guide to RCT for principals. If you also read about UK umbrella company reforms, our guide to the UK PAYE reforms for umbrella companies covers UK rules, which are not Irish law.

Learnsignal's offices are off Baggot Street in Dublin, and we offer in-person training from there. For current details, see our CPD pages.

Frequently asked questions

Do I register for RCT myself?

The principal notifies Revenue of the contract. You give them your name as recorded with Revenue, your TRN and proof of identity, and you then receive a contract confirmation letter. If you are not registered with Revenue, Revenue's page lists the 35% rate for that situation.

What decides whether I pay 0%, 20% or 35%?

Your tax compliance record, as assessed by Revenue. The manual lists criteria such as a fixed place of business, record keeping and compliance with tax obligations.

Is the tax deducted lost?

No. Revenue says it credits RCT deducted to your tax record and offsets it against PAYE, income tax, corporation tax or VAT liabilities once the relevant returns are filed.

How do I challenge a rate?

Resolve any compliance issues in ROS, wait at least 72 hours and self-review, or use MyEnquiries. The manual also describes a formal appeal within 30 days of a determination.

Does RCT apply if I am really an employee?

RCT applies to relevant contracts that are not contracts of employment. Revenue refers to the Karshan five-question test for deciding employment status.

This guide summarises Revenue guidance as read on the dates shown and is not legal or tax advice. Always check the current Revenue pages before you act.