Consultancy Agreement in Ireland: Template, Clauses and Local Law (2026)

What is a consultancy agreement in Ireland, and why does status matter? A consultancy agreement is a contract under which an independent consultant provides services to a client for a fee, without being an employee. In Ireland the central risk is employment status. If a worker labelled a consultant is really an employee, the client can be liable for PAYE, PRSI and USC, plus employment rights such as notice, holidays and unfair-dismissal protection. The leading authority is the Supreme Court decision in Karshan (Midlands) Ltd trading as Domino's Pizza v The Revenue Commissioners [2023] IESC 24, decided in October 2023. The Court held that delivery drivers were employees for tax purposes and set out a structured test for deciding status. Revenue has since updated its Guidelines for Determining Employment Status for Taxation Purposes to reflect it. A good consultancy agreement is drafted so the relationship holds up under that test. This article is general guidance, not legal advice. Employment-status and tax rules change, so take advice from an Irish employment or tax adviser before relying on your agreement. Last verified October 2026. ## The Karshan test, in plain terms The Supreme Court resolved the question by working through a series of five questions. The first two are: 1. Does the contract involve the exchange of a wage or other remuneration for work?

2. Is the worker agreeing to provide their own services, and not those of a third party (that is, is there personal service)? If those are met, the analysis moves on to control, and then to whether the arrangement, seen as a whole, is consistent with the worker being in business on their own account, taking account of the surrounding legislative and factual context. The case reduced the weight previously placed on "mutuality of obligation" and put more weight on control. <!-- [VERIFY: exact wording of questions 3 to 5 of the Karshan test against [2023] IESC 24] --> For a consultancy agreement, the practical takeaways are: allow genuine substitution, keep control with the consultant over how the work is done, and make sure the consultant is genuinely in business on their own account. ## Consultancy agreement template (Ireland) ``` CONSULTANCY AGREEMENT This Consultancy Agreement ("Agreement") is made on [DATE] BETWEEN: [CLIENT NAME], [address] ("Client") AND [CONSULTANT NAME / COMPANY], [address], company/registration number [number], VAT number [if registered] ("Consultant") 1. STATUS The Consultant provides the Services as an independent contractor in business on its own account, and not as an employee of the Client. Each party will account for its own taxes accordingly. 2. SERVICES The Consultant will provide the services and deliverables in Schedule A, controlling how and when the work is done, free to provide services to others, and entitled to provide a qualified substitute to perform the Services. 3. FEES AND VAT The Client will pay [EUR AMOUNT] per [project / milestone] on invoice. Fees are exclusive of VAT, which the Consultant will charge where it is registered and required to do so. 4. TAXES The Consultant is responsible for its own income tax, PRSI, USC and VAT, and will not be enrolled on the Client's payroll or receive employee benefits. 5. INTELLECTUAL PROPERTY Work product created under this Agreement is assigned to the Client on payment; the Consultant's pre-existing materials remain the Consultant's, licensed to the Client as needed. 6. CONFIDENTIALITY The Consultant keeps the Client's confidential information private and uses it only for the Services. 7. DATA PROTECTION (GDPR) Where the Consultant processes personal data for the Client, the parties will put Article 28 controller/processor terms in place. 8. TERM AND TERMINATION This Agreement runs from [START] and either party may end it on [N] days notice, or immediately for material breach. Fees earned before termination remain payable. 9. GOVERNING LAW This Agreement is governed by the laws of Ireland, and the courts of Ireland have jurisdiction. Signed for the Client: __________ Signed for the Consultant: __________ SCHEDULE A - SERVICES AND DELIVERABLES [Deliverables, milestones, acceptance, timing.]

- **Fees and VAT (clause 3).** State fees are exclusive of VAT and that the consultant handles its own PRSI, USC and income tax. Whether the consultant must register for VAT depends on the Irish turnover thresholds for services; confirm the current figure with Revenue. <!-- [VERIFY: current Irish VAT registration threshold for services] -->
- **Intellectual property (clause 5).** Assign work product on payment and keep pre-existing materials with the consultant under a licence.
- **Data protection (clause 7).** Add Article 28 processor terms where the consultant handles personal data, since GDPR applies in Ireland. ## Common mistakes to avoid - Relying on the "consultant" label. After Karshan, Revenue and the courts examine the real relationship, so the wording alone will not protect you.
- Blocking substitution while claiming self-employment. A genuine right to send a qualified substitute is one of the clearest pointers to contractor status.
- Running the engagement like a job: set hours, line-management, company equipment and exclusivity all pull toward employee status.
- Leaving VAT and PRSI responsibilities unstated. ## A note on jurisdiction Ireland applies Irish employment and tax law, EU VAT rules as implemented in Ireland, and GDPR. If the consultant is based in another country or works across borders, more than one country's rules can apply, and the Karshan analysis is specific to Irish law. Treat cross-border engagements as needing local advice in each relevant country, and keep "status depends on the real relationship" as the honest default rather than assuming a label settles it. ## Where a contract workspace helps An Irish consultancy agreement has to keep the status, IP, VAT and GDPR terms consistent across every consultant, test each draft against the Karshan factors before signing, and keep notice periods and renewals in view. Drafting, reviewing, tracking and governing an Irish consultancy agreement can live in one AI workspace tuned to how your company engages consultants, with the clauses linked so a missing substitution right is flagged and obligations and key dates are tracked. [Adira](https://adiralaw.com) is one tool built around that single-workspace idea for engagement contracts like an Irish consultancy agreement. This template alone is enough to put a fair agreement in place.