Tax returns
for RCT Subcontractors

What is RCT for Subcontractors?

RCT Subcontractors are self-employed individuals who provide services to the construction, forestry and meat-processing industries and are hired to work for a primary contractor.

When the primary contractor pays the subcontractor for their services, a percentage of this payment is deducted and paid directly to the Revenue Commissioners under the RCT system (the percentage rate is  based on the individual’s tax compliance records).

When the RCT Subcontractor completes their annual income tax return, any RCT that a primary contractor has deducted from the individual, can be applied against their income tax bill.

Who qualifies as an RCT Subcontractor?

Below are some examples of RCT Subcontractors in the construction industry who fall under the RCT Scheme.

• The installation of windows, heating, lighting, air conditioning, ventilation, fire protection, etc.
• The repair or installation of plumbing systems such as pipes, water supply and drainage systems.
• The demolition or dismantling of buildings, walls, docks and roadways.
• The construction, alteration, repair or extension of buildings, roadways, docks and railways.

What are the rates of tax for RCT Subcontractors?

The rate of tax for RCT Subcontractors is dependent on the individual’s compliance record with the Revenue Commissioners. There are three rates of tax under the RCT system:

1. Individuals with an up-to-date tax record may qualify for 0% rate. This generally applies to those who have a good tax record for at least the past three years.
2. Individuals with a substantially up-to-date tax compliance record qualify for 20% tax rate under the RCT system.
3. Individuals with a poor tax record or those who have not registered with the Revenue Commissioners are charged a tax rate of 35%. This applies to unregistered subcontractors with compliance issues such as outstanding returns.