Irish tax treatment of professional subscriptions

Revenue has published an update to previously issued guidance on the tax treatment of professional subscriptions paid or reimbursed on behalf of an employee.

Historic position

For the years 2004 to 2010, a statutory tax relief allowed an employer to pay/reimburse tax-free the annual professional membership fees on behalf of employees where the membership was regarded as “relevant” to the business of the employer. This relief was removed from 2011 onwards, with the result that professional membership fees could only be paid/reimbursed by an employer tax-free where the costs were incurred “wholly, exclusively and necessarily” by the employee in the performance of their duties. This effectively restricted the circumstances in which an employer could pay or reimburse the cost of professional subscriptions without operating PAYE withholding on the payments.

Revenue issued guidance in 2011 to confirm the circumstances where it viewed an exemption to be available, and these were as follows:

a) where there is a statutory requirement for membership of the body,
b) where there is a requirement for a practising certificate or licence to undertake duties of employment, and
c) certain other situations as follows:

  • The duties of the employee and the employment require the exercise or practice of the occupation or profession;
  • The employee so exercises or practises the occupation or profession; and
  • Membership of the professional body is an indispensable condition of the tenure of the employment.

Updated guidance was issued in January 2018 which appeared to restrict the possibility of claiming exemption for the situations outlined in c) above. For example, issues arose in cases where an employee was a member of a professional body but worked in an industry role performing broad employment duties not necessarily related to the qualification conferred by the professional body and where there was no statutory requirement to be a member of the body to carry out the employment. The guidance also confirmed that payment/reimbursement of dual membership fees on behalf of employees would be taxable if membership of the dual bodies conferred the same statutory privileges on employees.

What has changed?

In summary, the revised guidance allows for the tax-free payment/reimbursement of professional subscriptions by employees in the following circumstances:

  • where there is a statutory requirement for membership of the body
  • where membership of the body is required to circumvent a potential restriction in the employee performing his role (e.g. the right to appear before the Tax Appeals Commission is dependent on membership of professional bodies)
  • where there is a commercial necessity for payment of the fees (e.g. where an employers’ professional indemnity insurance requires employees to be members of a body or where a failure to hold a professional membership would prevent potential customers from entering into business contracts with the employer).
  • where membership is an indispensable condition of the tenure of the employment, for instance, where the requirement is included in their employment contract. This re-introduces a principle included by Revenue in its 2011 guidance.

While the updated guidance is welcome, there is still some uncertainty around the application of the new rules in practice.  It would be helpful if Revenue had also issued a list of approved professional bodies, subscriptions to which would not be a taxable benefit if paid by an employer, similar to the system adopted by the HMRC in the UK.

What should companies consider?

It may still prove challenging for employers to be compliant with the circumstances in which Revenue will allow for the tax-free payment/reimbursement of professional subscriptions, given the way some of the examples are framed (e.g. the exemption applying to commercial necessity).  

Employers should review its treatment of professional subscriptions for tax purposes, considering the updated guidance and take the necessary steps to stay compliant from a PAYE perspective.

If you have any questions in relation to the above, or if you would like to discuss this topic further, please contact a member of the Mazars employment tax team below:

Staff Member




Ken Killoran

Tax Partner

01 449 4451



February 2020