For the tax years 2004 to 2010, expenses incurred by an employer on behalf of an employee in connection with the payment (or reimbursement) of annual membership fees of a professional body were exempt from tax where such membership was regarded as “relevant to the business” of the employer.

Finance Act 2011 stated that this tax exemption is not available for the tax year 2011 and subsequent tax years. Accordingly, the deductions of tax, PRSI and the Universal Social Charge (USC) must be made from pay in respect of the notional income amount of any payment or reimbursement by the employer of membership fees of a professional body on behalf of an employee.

Revenue has since clarified that where membership of a professional body/society is integral to performing the duties of the employment the payment by the employer of annual membership fees will still be exempt from tax. Revenue has advised that this would most likely be when it is a statutory requirement that the employee be a member of a professional body or when a practicing certificate or license is required.

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