Dáil Éireann Debate, Wednesday - 6 May 2026
222. Deputy Mairéad Farrell asked the Tánaiste and Minister for Finance if his attention has been drawn to the effect of the Karshan judgement on freelance and self-employed workers; the information and guidance his Department has made available to freelance and self-employed workers to navigate the impact of the judgement on their work; and if he will make a statement on the matter. [32274/26]
View answerAs the Deputy will be aware, on 20 October 2023, the Supreme Court delivered a unanimous judgment in the Revenue Commissioners v Karshan (Midlands) Ltd. t/a Domino’s Pizza case. The case was concerned with whether delivery drivers were independent contractors under a “contract for service” and taxable under Schedule D of the Taxes Consolidation Tax 1997, or employees under a “contract of service”, and taxable under Schedule E of the Act (PAYE). The Supreme Court upheld the Tax Appeals Commission determination that the delivery drivers were employees of the company.
While the judgment related to a company engaging individuals as delivery drivers, as a decision of the Supreme Court, the judgment has application across all sectors, including for freelance workers.
While there has been no recent change to tax policy or tax treatment in this area, as a decision of the Supreme Court, the judgment is binding and must be applied to all sectors and all businesses operating in Ireland. Revenue cannot disregard the implications of a Supreme Court judgement, nor would they seek to. Following the judgment, Revenue published detailed guidance in May 2024 in its Tax And Duty Manual Revenue Guidelines for Determining Employment Status for Taxation Purposes Part 05-01-30. This guidance explains the five step framework that is required to be applied by all businesses who engage individuals to carry out work and provides a number of practical examples to assist businesses and organisations in this regard.
Within this guidance, Revenue encouraged all businesses to “comprehensively review arrangements with all workers and determine their employment status for taxation purposes”. The guidance applies to all sectors, including businesses engaging workers on a freelance basis. The decision of the Supreme Court sets out a five-step framework that must be applied by reference to the facts and circumstances of an individual case, to ascertain whether an individual is an employee, or self-employed, for the purpose of taxation.
Revenue recognised that prior to the judgment in October 2023, some employers, acting in good faith, may have misclassified employees for tax purposes as persons engaged in contracts for services. It was in this context that on 11 September 2025, Revenue announced a disclosure opportunity to incentivise such employers to make a disclosure in respect of 2024 and 2025 arising from bona-fide classification errors.
The Karshan disclosure opportunity was available to all employers in the State and across all sectors, provided that they meet the terms as outlined in the disclosure initiative. To avail of the settlement terms outlined, all disclosures were to be submitted to Revenue no later than 30 January 2026.
In addition, Revenue had engaged via the Tax Administration Liaison Committee (TALC) Audit with the professional tax advisor, accounting and legal bodies who are members of TALC on the Karshan disclosure initiative and also participated in an Irish Tax Institute (ITI) Tax Talks podcast to discuss the initiative.
