Rory Hearne (Dublin North-West, Social Democrats)
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279. To ask the Minister for Finance further to interactions at the Joint Committee on Arts, Media, Communications, Culture and Sport on 28 May 2025 (details supplied), if he will clarify his Department’s interpretation of the Revenue Commissioners v. Karshan (Midlands) Ltd t/a Domino’s Pizza [2023] judgment in the Supreme Court in respect of self-employment versus employment for tax purposes; his Department’s plans, if any, to act on the Supreme Court’s decision; to clarify existing legislation in this regard; if the guidance of the Revenue Commissioners or the Workplace Relations Commission is most accurate in relation to corporate entities; and if he will make a statement on the matter. [32198/25]

Paschal Donohoe (Dublin Central, Fine Gael)
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I am advised by Revenue that under Section 851A of the Taxes Consolidation Act 1997 it is precluded from disclosing taxpayer information and therefore neither I, nor Revenue, can comment on the specifics of the topic discussed during the referenced interaction in the Joint Committee on Arts, Media, Communications, Culture and Sport on 28 May 2025.

In relation to the Deputy’s query about the Supreme Court case, in a unanimous decision on 20 October 2023, the Supreme Court delivered a detailed judgment in The Revenue Commissioners v. Karshan (Midlands) Ltd. t/a Domino’s Pizza. The case was concerned with whether the delivery drivers were independent contractors under a “contract for service” and taxable under Schedule D of the Taxes Consolidation Act 1997, or employees under a “contract of service”, and taxable under Schedule E of that Act (PAYE). It is important to note that the case was concerned solely with the proper tax treatment of the workers concerned and so did not concern the PRSI class of said workers.

The judgment provides an extensive review of relevant caselaw, and succinctly summarises it through the provision of a five-step decision-making framework. The decision-making framework consists of five questions that is to be used to resolve the question of whether a contract is one of service (employee) or for service (self-employed) for tax purposes.

Following on from the Karshan ruling, as was previously the case, it is for a business who engages a person to make the determination whether the individual is employed or self-employed for tax purposes based on the facts and circumstances of each relationship and payment. It is not a matter of choice, either for the business, the individual or Revenue.

To assist businesses in making their determination, Revenue published extensive detailed guidance which outlines its position in relation to the application of the five-step framework. This is outlined in its Tax and Duty Manual 05-01-30 "Revenue Guidelines for Determining Employment Status for Taxation purposes", which was published in May 2024 and is available at www.revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-05/05-01-30.pdf

It is important to note that while Revenue has responsibility for determination of employment status of a worker for taxation purposes, any responsibility for determination of employment status of a worker for PRSI purposes falls to the Department of Social Protection (DSP). Likewise, responsibility for employment rights, such as employment equality, minimum wage rates, holiday pay and sick pay, etc., falls to the Workplace Relations Commission (WRC), which is under the aegis of the Department of Enterprise, Trade and Employment.

In November 2024, Revenue, DSP and the WRC published a revised Joint Code of Practice on Determining Employment Status was published on behalf of the above three bodies and is available at . However, it should be noted that each of those three state bodies operates within its own legislative framework in respect to the determination of employment status and a decision by one body is non-binding on the other two bodies. While Revenue endeavours to ensure consistency, occasionally, due to the separate legislative frameworks, differences arise. As a result, it cannot be assumed that the decision of one of the three state bodies will be replicated by either or both of the other two bodies.