DIRT on German account?

K

kha

Guest
Apologies if this is a repeat question, but I couldn't find anything that fits my circumstances.

I am living, working and paying tax here. However, I still have a bank account in Germany with money that I have earned there (This is where I am from originally). Do I need to declare this here and pay dirt on the Interest? I already pay german 'DIRT' on it.
 
Assuming you are tax resident in Ireland and not Germany (this would need to be confirmed but is likely based on the circumstances you describe) then under the Ireland/Germany Double Taxation Agreement the bank interest should only be taxable in your country of residence i.e. Ireland. It should be possible for you to receive the interest gross in Germany i.e. no German "DIRT". You would need to contact the bank and make the necessary declaration re your residence position and it should be possible for them to cease applying the German "DIRT". The good news is that if you are non-Irish domiciled (which would be the case if you are a German national who intends ultimately to return to Germany to live at some point) then the interest is only taxable in Ireland if you remit it into Ireland i.e. leave it in Germany and there is no Irish tax either.

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Thanks, Breninio for your quick reply.
At the moment the plan is not to return to Germany. Instead, I am planning to buy a house here in the next few years, so I will then need that money also.

So this basically means I need to pay tax here on the interest, did I understand this correctly? And I need to tell my bank in Germany that I am now a resident in Ireland and not in Germany anymore, so I won't be charged DIRT twice.

How do I go about declaring the interest on my german account here? Is there a deadline for this?
 
If you are Irish tax resident then you should contact your German bank, confirm the position and request that German "DIRT" ceases to be applied.

Then you need to confirm whether you are still German domiciled. Domicile is a legal concept and will be decided by a range of factors.Normally though a domicile of origin i.e. Germany in your case, will be maintained until such time as it is clear that there is no intention to return there (e.g.all ties (e.g economic, personal) are severed with the country).

If you are German domiciled then the interest will be taxable in Ireland when brought into the country, not when it arises. If you have acquired an Irish domicile then the interest is taxable in Ireland as it arises so it is importnat that you determine your correct domicile position. In both cases the interest should be declared on a tax return for the relevant year.

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By Law, all the countries within the EU exchange depositor’s details with each other, under the European Savings Directive, if they are earning deposit interest without deduction of DIRT tax.

However, if you are already paying DIRT tax in Germany, then the Irish Revenue will give you credit for this & if the rate of deduction is in excess of 25%, then you will be entitled to a refund for the difference.

You should obtain a Certificate of Interest from the German Bank for each of the tax years & return them to the Irish Revenue together with your normal end of year return(s).
 
droileen said:
However, if you are already paying DIRT tax in Germany, then the Irish Revenue will give you credit for this & if the rate of deduction is in excess of 25%, then you will be entitled to a refund for the difference.
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No you won't.

While Revenue will give credit for the German tax paid, they will not refund any excess as it was not paid to them.

The tax was paid to the German revenue authorities, why would you expect Revenue to refund something they were not paid!
 
droileen said:
You should obtain a Certificate of Interest from the German Bank for each of the tax years & return them to the Irish Revenue together with your normal end of year return(s).
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Or better still, just notify the German bank that you are not tax resident there and have the withholding tax ceased altogether!
 
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