Revenue clarifies its position on RCT for Mixed Contracts

Revenue updated its Relevant Contracts Tax Manual in June 2025 to include a detailed section on contracts for the acquisition of property, especially where both construction services and land supply are involved.

The new guidance confirms that where a contract provides for both construction services and the supply of land, only the construction services are subject to RCT. If there is a single consideration for both, the principal must apportion the amount applicable to construction services. This marks a change from previous Revenue guidance, which stated that if any part of a contract was for relevant operations (construction, meat processing or forestry), all payments under that contract were liable for RCT.

The Institute of Taxation sought clarification from Revenue on the application of RCT to mixed contracts (i.e., contracts including both construction operations and other activities not considered relevant operations). Revenue has now confirmed that the updated Manual contains the official position – RCT applies only to payments for relevant operations (construction, meat processing, forestry).

What Does This Mean for Mixed Contracts?

• The legislation does not provide for RCT to apply to services outside the definition of construction, meat processing, or forestry operations.
• For mixed contracts, the contract value must be apportioned between construction services (the relevant contract) and other elements (e.g., sale of land).
• Activities that are integral to an overall construction project (e.g. site clearance, excavation, tunnelling and boring, laying of foundations, erection of scaffolding, site restoration, landscaping and the provision of roadways and other access works) remain within the scope of RCT.

What Does This Mean for Repair & Maintenance Contracts?

The new guidance maintains Revenue’s position that RCT applies to contracts for repair work and to contracts for repair and maintenance work.

What Does This Mean for Supply and Install Contracts?

Further clarification is being sought from Revenue on the position for supply and install contracts.

Takeaway for Contracts with Mixed Elements:

If you’re entering into contracts that combine construction, meat processing, or forestry operations with other services or sales, ensure you can clearly apportion the contract value. RCT will only apply to the part of the contract that relates to relevant operations.