What is Professional Services Withholding Tax?

Professional Services Withholding Tax (PSWT) is a 20% tax applied to payments made by ‘accountable persons’ for certain professional services.

What is the definition of an accountable person?

State and semi-state bodies such as government bodies, local authorities, the HSE – and their subsidiaries – are classified as accountable persons and must deduct PSWT at the rate of 20% from payments made for certain professional services.

Which professional services are subject to PSWT?

  • Healthcare: medical, dental, pharmaceutical, optical, aural, veterinary
  • Construction: Architectural, engineering, quantity surveying
  • Financial: Accountancy, auditing, finance
  • Other business services: financial, economic, marketing, advertising
  • Legal: Barrister, solicitor, and other legal services
  • Geological

Some services are excluded for PSWT, such as:

  • Teaching and training
  • Translation services and proofreading services
  • Cleaning services
  • Maintenance and repair

PSWT will also be applied to any expenses claimed by the service provider as part of their delivery of the service. Examples of such expenses include travel and subsistence, postage, etc.

PSWT should be calculated before applying any VAT, stamp duty, or other fees.

PSWT Returns

ePSWT will be implemented in 2021 and will make it easier for an accountable person to submit payments and generate ‘Payment Notifications’.