InDisputes – TAC Considers Redundancy Payment Tax Exemption

20TACD2026: Employee working in Ireland under an A1 certificate cannot access tax-free redundancy payments

The Tax Appeals Commission (“TAC”) decision in case 20TACD2026 considered an appeal against a Revenue tax assessment on a termination payment. The appellant submitted that the payment was, in substance, a lump sum redundancy payment and should be exempt from income tax under section 203 of the Taxes Consolidation Act 1997 (“TCA“).

Section 203 TCA exempts from income tax lump sum payments made under sections 19, 32 or 32A of the Redundancy Payments Act 1967 (“RPA“). Section 7(1)(b) RPA provides for a general right to a redundancy payment where an employee is dismissed by reason of redundancy provided that the employee was, amongst other requirements, “an employed contributor in employment which was insurable for all benefits under the Social Welfare Acts” immediately before termination.