Deposit Interest Retention Tax

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Town

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Are all bank deposits a/cs subject to DIRT only or where and when must one pay the additional marginal rate of tax.
 
All deposit interest is subject to DIRT at 20%.

That is the total tax liability.
 
Also...

Some senior citizens can claim exemption from DIRT - see www.revenue.ie
I believe that some levels of deposit interest (c. €3,175 p.a.?) may trigger a PRSI liability.
Not sure if DIRT applies and is the only tax on business/commercial deposit interest?
 
ClubMan said:
I believe that some levels of deposit interest (c. €3,175 p.a.?) may trigger a PRSI liability
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For a self-employed individual already filing trade/professional income on Form 11, if they also have deposit interest of even a small amount that is added to income for PRSI/Levy purposes. The DIRT credit is of course given but there could still be a 3% + 2% additional liability for PRSI/Levies depending on the overall income if it exceeds the relevant thresholds.


ClubMan said:
Not sure if DIRT applies and is the only tax on business/commercial deposit interest?
Click to expand...

For ltd companies, DIRT would be deducted but there is a CT rate of 25% on unearned income so there would be an additional 5% there after allowing for the DIRT.
 
ClubMan said:
Also...

Some senior citizens can claim exemption from DIRT - see www.revenue.ie
I believe that some levels of deposit interest (c. €3,175 p.a.?) may trigger a PRSI liability.
Not sure if DIRT applies and is the only tax on business/commercial deposit interest?
Click to expand...

Can account holders that are still going to school (under 16's) claim back the DIRT
 
Graham_07 said:
See [broken link removed]for DIRT repayment conditions.
Click to expand...

Thanks for the link Graham, looks like they can't so. Which does not seem fair to them.

Who can Claim?

A person or his/her spouse who is:
  • aged 65 or over or
  • is permanently incapacitated and
  • their total income (including the Gross DIRT Income) is less than the relevant exemption limit
 
hoopman;71810[B said:
, looks like they can't so. Which does not seem fair to them[/B]
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There are many aspects of the tax code that seem unfair to those to whom the relevant relief can not be applied. That's just the way it is, like many things in life I guess.
 
hoopman said:
Thanks for the link Graham, looks like they can't so. Which does not seem fair to them.

Who can Claim?

A person or his/her spouse who is:
  • aged 65 or over or
  • is permanently incapacitated and
  • their total income (including the Gross DIRT Income) is less than the relevant exemption limit
Click to expand...

From reading the above it seems the having less than 20k in gross income ALONE is not sufficient to qualify for a dirt refund, individual must also by over 65/permanantly incap.

Can anyone confirm this?
 
max said:
From reading the above it seems the having less than 20k in gross income ALONE is not sufficient to qualify for a dirt refund, individual must also by over 65/permanantly incap.

Can anyone confirm this?
Click to expand...

The following posts give the specific conditions for DIRT repayment :-

hoopman said:
Who can Claim

A person or his/her spouse who is:
  • aged 65 or over or
  • is permanently incapacitated and
  • their total income (including the Gross DIRT Income) is less than the relevant exemption limit
Click to expand...

Graham_07 said:
See [broken link removed]for DIRT repayment conditions.
Click to expand...

But to clarify further, it is not sufficient for an under aged 65 person to be merely below the tax exemption limit , they must be also totally incapacitated. An over aged 65 person must be under the exemption limit, but they do not have to be incapacitated.
 
Graham_07 said:
For a self-employed individual already filing trade/professional income on Form 11, if they also have deposit interest of even a small amount that is added to income for PRSI/Levy purposes. The DIRT credit is of course given but there could still be a 3% + 2% additional liability for PRSI/Levies depending on the overall income if it exceeds the relevant thresholds.
Click to expand...

Is the DIRT credit refered to the same as the PAYE credit?
 
agoose said:
Is the DIRT credit refered to the same as the PAYE credit?
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No, the PAYE credit is that credit of €1830 given for PAYE employments (with certain exceptions). The DIRT credit is a credit for the DIRT paid at 20%.
 
Graham_07 said:
No, the PAYE credit is that credit of €1830 given for PAYE employments (with certain exceptions). The DIRT credit is a credit for the DIRT paid at 20%.
Click to expand...

Ah you mean a credit for that amount of DIRT already deducted by the bank correct?
 
agoose said:
Ah you mean a credit for that amount of DIRT already deducted by the bank correct?
Click to expand...

Correct. The gross deposit income is added to other income. You then get an increase in the standard rate cut off point equivalent to the gross deposit interest resulting in that gross deposit interest being taxed at 20%. You then get the credit for the DIRT paid at 20% resulting in a "Nil" tax liability. Sounds a bit of a long way round but that's how it works. ( there may be PRSI levy issues of course depending on circumstances)
 
Thanks for last reply. I was just trying to figure out how they actually did the calculation.
 
I am trying to understand how this applies to me. I completed a form 11 for 2007. I included deposit interest received of which I have already paid 20% dirt to the bank. I have received a statement P21 and the deposit interest is included in my income and looks like it is being taxed again ? I now have an underpayment !!
 
I am trying to understand how this applies to me. I completed a form 11 for 2007. I included deposit interest received of which I have already paid 20% dirt to the bank. I have received a statement P21 and the deposit interest is included in my income and looks like it is being taxed again ? I now have an underpayment !!
 
The way the Revenue show this on your statements is:

Gross income included in calculation.
SRCOP (standard rate band) is increased by gross amount

By increasing the rate band, you are therefore being taxed only at 20% on the interest income, however, it is included for levies.

If you have an underpayment it may be for another reason.
 
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