Search Overlay

Relevant Contracts Tax (RCT) applies to payments made by a principal contractor to a subcontractor under a relevant contract i.e. a contract for the carrying out of, or the supply of labour for the carrying out of, relevant operations in the construction, meat processing and forestry industries. Tax is deducted by a principal contractor on payments to a subcontractor as advised by Revenue.

The scheme applies only where the relevant operations are performed under a relevant contract with a principal as defined in the RCT legislation.

For example if a private householder engages a builder to build an extension this is technically a relevant contract. The builder is working as a sub-contractor for the householder and carrying out a relevant operation in the construction industry. However, because the householder is not a “chargeable principal” i.e. a principal as defined in Section 531 Taxes Consolidation Act, 1997, RCT does not apply to any payments made to the subcontractor.

RCT is a withholding tax system whereby a principal contractor deducts tax at 35% or 20%  from payments to subcontractors as advised by Revenue on the  ROS system.