# Deposit Interest Retention Tax



## Town (3 Oct 2008)

Are all bank deposits a/cs subject to DIRT only or where and when must one pay the additional marginal rate of tax.


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## Protocol (3 Oct 2008)

All deposit interest is subject to DIRT at 20%.

That is the total tax liability.


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## ClubMan (3 Oct 2008)

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?


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## Graham_07 (3 Oct 2008)

ClubMan said:


> I believe that some levels of deposit interest (c. €3,175 p.a.?) may trigger a _PRSI _liability


 
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?


 
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.


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## hoopman (3 Oct 2008)

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?


 
Can account holders that are still going to school (under 16's) claim back the DIRT


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## Graham_07 (3 Oct 2008)

hoopman said:


> Can account holders that are still going to school (under 16's) claim back the DIRT


 
See [broken link removed]for DIRT repayment conditions.


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## hoopman (3 Oct 2008)

Graham_07 said:


> See [broken link removed]for DIRT repayment conditions.


 
*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


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## ClubMan (3 Oct 2008)

hoopman said:


> Can account holders that are still going to school (under 16's) claim back the DIRT


No.


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## Graham_07 (3 Oct 2008)

hoopman;71810[B said:
			
		

> , looks like they can't so. Which does not seem fair to them[/B]


 
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.


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## max (18 Oct 2008)

hoopman said:


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



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?


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## schmile (18 Oct 2008)

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?



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



hoopman said:


> Who can Claim
> 
> A person or his/her spouse who is:
> 
> ...





Graham_07 said:


> See [broken link removed]for DIRT repayment conditions.



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.


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## agoose (19 Oct 2008)

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.



Is the DIRT credit refered to the same as the PAYE credit?


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## Graham_07 (19 Oct 2008)

agoose said:


> Is the DIRT credit refered to the same as the PAYE credit?


 
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%.


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## agoose (20 Oct 2008)

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%.



Ah you mean a credit for that amount of DIRT already deducted by the bank correct?


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## Graham_07 (20 Oct 2008)

agoose said:


> Ah you mean a credit for that amount of DIRT already deducted by the bank correct?


 
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)


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## Louisb (8 Nov 2008)

Thanks for last reply. I was just trying to figure out how they actually did the calculation.


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## drums (18 Nov 2008)

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 !!


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## drums (18 Nov 2008)

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 !!


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## Domo (19 Nov 2008)

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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