Whether you are a principal contractor or a subcontractor, we can help you identify the forms and returns to be completed and submitted by you. See our section below to see whether you qualify to be assessed under the Relevant Contracts Tax system.

What is Relevant Contracts Tax (RCT)?

Relevant Contracts Tax applies to payments made by a principal contractor to a subcontractor under a relevant contract (this is a contract to carry out, or supply labour for the performance of relevant operations in the construction, forestry or meat processing industry). RCT applies to both resident and non-resident contractors operating in the construction, forestry or meat processing industry.

RCT is a tax deduction system whereby a principal contractor:

  • Deducts tax at 35%, 20% or 0% from payments to subcontractors.
  • Maintains a record of payments to all subcontractors.

How does RCT work?

Tax is deducted by a principal contractor on payments to a subcontractor unless the principal contractor has received a relevant payments card (Form RCT47) for the subcontractor. Where tax is deducted, the principal contractor gives the subcontractor a Form RCTDC, which the subcontractor uses to claim credit for, or repayment of, the tax withheld. The form RCTDC must include the PPS/Tax Reference Number and, if an individual, the date of birth of the subcontractor.

RCT applies to the following:

  • Construction operations
  • Forestry operations
  • Meat processing operations

RCT does not apply to professionals such as architects, surveyors etc.

The VAT Reverse Charge affects contractors involved in the provision of construction services that are subject to RCT.


Completion and submission of RCT Returns to the Revenue Commissioners – 

The RCT Return is the monthly return made by the Principal Contractor, showing a schedule of payments made to Subcontractors during the income tax month and the RCT, if any, deducted on same. This form can only be completed online. The Return is filed automatically as NIL if the Principal Contractor does not file it on time by the 23rd day of the month following the month of the return. If that return requires amending, a fine of €100 will be incurred.

Who is a principal contractor ?

A principal contractor in the construction, forestry and meat processing industry is a person who takes on a subcontractor and who:

  • Carries on a business which includes the erection of buildings or the development of land or the manufacture, treatment or extraction of materials for use, whether used or not, in construction operations;
  • Carries on a business of meat processing operations in an establishment approved and inspected in accordance with the European Communities (Fresh Meat) Regulations, 1997. Carries on a business of meat processing operations in an establishment approved and inspected in accordance with the European Communities (Fresh Poultry-meat) Regulations, 1996;
  • Carries on a business of forestry operations which includes the processing (including cutting and preserving) of wood from thinned or felled trees in sawmills or other like premises or the supply of thinned or felled trees for such processing;
  • Is connected with a company which carries on any of the above businesses;
  • Is a local authority or a public utility society or a body referred to in subparagraph (i) or (ii) of section 12(2)(a) or section 19 or 45 of the Housing Act 1966;
  • Is a Minister of the Government;
  • Is a board established by or under Statute or any board or body established by or under royal charter and funded wholly or mainly out of moneys provided by the Oireachtas;
  • Carries on any gas, water, electricity, hydraulic power, dock, canal or railway undertaking;
  • Is a subcontractor who subcontracts all or part of the contract to a subcontractor

When a principal contractor takes on someone in the construction, forestry or meat processing industries the principal contractor must establish whether the worker is an employee or self-employed as a subcontractor.

The category that a worker falls into depends on what they actually do, the way they do it and the terms and conditions under which they are engaged, whether written, verbal or implied. It is not simply a matter of a principal contractor or a subcontractor calling the job ’employment’ or ‘self-employment’.

The following lists give the main features that should be taken into account in deciding whether a worker is an employee or a self-employed contractor (further details are available in the Code).

He/she is an employee if some or all of the following apply:

  • Is under the control of another person who directs as to how, when and where the work is to be carried out
  • Works set hours or a given number of hours per week or month
  • Does not supply materials for the job
  • Does not provide equipment other than the small tools of the trade
  • Is not exposed to personal financial risk in carrying out the work
  • Receives a fixed hourly/weekly/monthly wage
  • Is entitled to extra pay or time off for overtime
  • Is entitled to sick pay
  • Receives expense payments to cover subsistence and/or travel expenses
  • Supplies labour only
  • Cannot subcontact the work
  • Does not assume any responsibility for investment and management in the business
  • Does not have the opportunity to profit from sound management in the scheduling of engagements or in the performance of tasks arising from the engagements
  • Will normally be covered under the employer’s public liability insurance
  • Works for one person or for one business


He/she is self-employed if some or all of the following apply:

  • Has control over what is done, how it is done, when and where it is done and whether he or she does it personally (In the construction sector for health and safety reasons, all individuals are under the direction of the site foreman/overseer. The self-employed individual controls the method to be employed in carrying out the work)
  • Controls the hours of work in fulfilling the obligations of the contract
  • Provides the materials for the job
  • Provides equipment and machinery necessary for the job, other than the small tools of the trade
  • Is exposed to financial risk, by having to bear the cost of making good faulty or substandard work carried out under the contract
  • Costs and agrees a price for the job
  • Receives an agreed contract payment(s) without entitlement to pay for overtime, holidays, country money, travel and subsistence or other expense payments
  • Is free to hire other people, on his or her terms, to do the work which has been agreed to be undertaken
  • Assumes responsibility for investment and management in the enterprise
  • Has the opportunity to profit from sound management in the scheduling and performance of engagements and tasks
  • Provides his or her own insurance cover as appropriate e.g. public liability insurance, etc
  • Owns his or her own business
  • Can provide the same services to more than one person or business at the same time


It should be noted that:

  • A worker paid by results (piece worker, commission, by share) is not automatically a self-employed contractor;
  • The fact that an individual has registered for self-assessment or VAT under the principles of self-assessment does not automatically mean that he or she is self-employed;
  • A worker who is a self-employed contractor in one job is not necessarily self-employed in the next job. Each job must be looked at separately.