# credit card tax



## icantbelieveitstaken (19 Nov 2003)

When does the Government tax on credit cards apply, if I was to apply and get a cc before the end of this year would I pay the tax in this year and then also pay in the New Year. 
In other words would I be better off waiting until the New Year to apply for the cc.


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## Elcato (19 Nov 2003)

April the first but look out for any change in the budget. You would be liable for €40 on opening and another on April 1st 2004 so if you think its worth it wait until April to get a CC.


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## Shanks1 (19 Nov 2003)

The tax is applied on every credit card account on the 31 March each year. If you can wait until 1 April 2004 to get a credit card then you will avoid this year's tax.


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## rainyday (19 Nov 2003)

You pay €40 for each cc account which is open during the tax year 1st Jan-31st Dec. So yes, you will avoid the €40 for this year if you wait until January to open the account.


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## Shanks1 (19 Nov 2003)

The stamp duty isn't charged to credit card accounts until the 1st of April, if you open an account before then won't you get caught by this year's (1 April 03 - 31 March 04) tax?


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## Elcato (19 Nov 2003)

Hi Rainyday - Can you clarify. If I close my account next March will I be charged for the tax year 1st Jan to 31 dec 2004 ? Or do I need to wait until March to close one and re-open the other in April to avoid payment twice ?


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## rainyday (20 Nov 2003)

> If I close my account next March will I be charged for the tax year 1st Jan to 31 dec 2004 ?


Yes - You would have to close it before 31st Dec to avoid the tax for next year.


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## Shanks1 (20 Nov 2003)

So to clarify, Is the tax we that we will pay next April 2004 on credit cards accounts opened at any time between  1 Jan - 31 Dec 2003?


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## rainyday (20 Nov 2003)

> Is the tax we that we will pay next April 2004 on credit cards accounts opened at any time between 1 Jan - 31 Dec 2003?


No - it is on a current year basis. The tax you paid this year was for this year. The tax you pay next year is for next year.


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## Marion (20 Nov 2003)

*Re: tax*

I'm hoping that there will be some change announced in the budget regarding credit card tax.

Marion :hat


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## cobalt (20 Nov 2003)

*tax year v credit card year*



> *Rainyday:*
> You pay €40 for each cc account which is open during the tax year 1st Jan-31st Dec. So yes, you will avoid the €40 for this year if you wait until January to open the account.


The credit card year runs from 1 April - 31 March. It wasn't changed in line with the tax year change (which seems silly - maybe they'll correct that in the forthcoming budget).


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## Marion (20 Nov 2003)

*Re: date change*

Hi Cobalt

If the date is changed, I will be first in line looking for 3 months' rebate of tax paid.

Marion :hat


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## cobalt (20 Nov 2003)

*change*

...which would be a nice round tenner. It'd certainly add up if everybody did it.


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## garrettod (23 Nov 2003)

*...*

Come on boys'n'girls,

You really think there is the slightest chance of you all getting €10 back from the government ? .... I wish  

This is a complete scam by the Government to hit us all with more indirect taxation - they screwed us with this €40 tax & have got away with it.

As I see it:

* We get screwed if we try to move credit card providers as there will be a charge on both the old & new credit card accounts (check out Ulster Bank zinc / Pigsback Visa / Amex Blue for methods of getting some of this / all of this back through usage).

* There is no way Charlie will reduce / change the timing of this payment on all cards - why should he, it's in the Government's favour

* Some new stealth tax will appear in this years budget, which again many of us will cry in our beer about but do nothing more to prevent it - if we were not so full of hot air in this country, we would have national strikes in protest, just like they do in France etc

Regards

G>


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## Marion (24 Nov 2003)

*re: annual tax*

Hi Garrettod

The point I made referred to the fact that my tax paid - €40 covers the period 01 04 2003  to 31 03 2004.

If the calendar date is changed then everybody who has paid annual tax for the year (April to April) should have only paid €30. The full tax, €40, would then commence on 01 Jan 2004 - 31 Dec 2004.

Does anybody know the figures for switching between credit card accounts for the year

I suspect they must be well down on previous years. 

Marion :hat


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## zag (24 Nov 2003)

*Re: re: annual tax*

Marion - given that the tax (levy) is not currently pro-rated for people who join during the year, and given the way things are in the Department of Finance at the moment, I wouldn't be holding my breath waiting for the tenner.

z


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## Marion (24 Nov 2003)

Hi zag

It's not the tenner. To be honest, it's not going to make any difference financially to me or many others. To be fair, we are talking about people who have the financial ability to open credit card accounts. We are not talking about people on the breadline.

But, it's the principle and there has been precedence. 

When the tax year was changed from 06 April to 31 Dec all our tax details were apportioned over a 9 month period. I don't see why there should be any difference in relation to the credit card tax if the calendar date were to be changed.

Secondly, There is a much bigger picture to look at:

The current tax on credit cards is both anti-competiton and anti-consumer and both of these ought to be adressed and can be addressed by changing the current tax charges on cards to an annual charge which disregards card switches.

The tax on a card levied ought to be carried forward when one switches from one card to another to benefit from lower interest reates so that one only pays one tax charge in any one year. 

I think this is fair and equitable and it fits in with the functions of an economic tax charge.

Marion :hat


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## Shanks1 (25 Nov 2003)

*Re: re: annual tax*



> The point I made referred to the fact that my tax paid - €40 covers the period 01 04 2003 to 31 03 2004.




 This morning I closed my MBNA credit card account and they told me the tax we paid last April covered the period  01 04 2002 to 31 03 2003. It's applied retrospectively according to them. Assuming they're correct, then if McCreevy does bring the imposition of this tax into line with the calender year, we will pay 30 Euro next January and then 40 Euro every year thereafter. If he doesn't increase it of course!


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## garrettod (25 Nov 2003)

*...*

Hi Marion,

I understood the point you made very well, thank you all the same though  

I do agree with you, however I have no faith in the Government returning part of our tax paid.

Should you be considering a campaign on the general issue of credit card tax, I certainly would be willing to lend some support - from the back of the bus, needless to say  



Interesting point about MBNA claiming that we paid tax in arrears.  If memory serves me correctly ....

When the tax was first introduced on Credit Cards, it was charged for the year ahead - when did this change ?

It is quite unlike the Government to charge any tax 12-months in arrears, so in my view someone is possibly trying to pull a fast one.

Can anyone confirm / assist ?

Regards & thanks

G>


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## veron01 (25 Nov 2003)

*.....*

"This morning I closed my MBNA credit card account and they told me the tax we paid last April covered the period 01 04 2002 to 31 03 2003. It's applied retrospectively according to them". 

I got  the same statement from MBNA as Shanks1, they also told me that the tax was for the previous year. Suffice to say I was gobsmacked!


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## Elcato (25 Nov 2003)

*Re: .....*

I didn't get charged on my CC until the following April after opening a few years ago so it does make sense that the tax paid is for up to March of 2003. However I'm still not sure that I need to close my account before Jan the first in order to avoid having to pay twice next April. I too, am waiting for the budget before persuing this seriously but as Garrett mentioned I dont hold much hope of any change. I dont see how changing to a tenner every three months would bother the gov. as the banks are doing their collection for them so it's no skin of their nose. Ohh, I'm day dreaming again aren't I ....


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## Marion (25 Nov 2003)

Hi G

There is nothing wrong with your memory.

I contacted MBNA last Jan in relation to closing down my a/c with them. I was informed (I asked her to repeat it) that my tax was duly paid for the year April 2002/2003 and that if I were to close my a/c that I would not have to pay the tax.

Having read the Shanks1 last evening, I contacted MBNA and lo and behold ... the goalposts have changed! It is now dealt with on a retrospective basis.

I was down in my BOI today to check out their a/c. They also say that the payment is retrospective. I  have yet to check out AMEX to see what their policy is.

How did we miss the change? Was it changed. If not why are the banks singing from the same hymn sheet?

Marion :hat


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## Elcato (26 Nov 2003)

I talked to the visa unit of EBS today and they have informed me that the tax year for CCs is April to March which seems to contradict what Rainyday said earlier. This whole thing stinks as far as I can see. Once again all we can do is wait for clarification in the budget. Was there not something about closing the loophole of shutting down one account and re-opening after April to avoid the tax ? I think this was the change from last year except no-one dared tell the public in case they might start blocking bank officials cars and refusing to apoligise so they can get thrown in jail ......


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## rainyday (26 Nov 2003)

> they have informed me that the tax year for CCs is April to March which seems to contradict what Rainyday said earlier.



I'm open to correction (as always). I do recall a knowledgable individual posting the updated version of the legislation which seemed to indicate a Jan-Dec tax year, though I could be wrong.


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## Marion (26 Nov 2003)

Amex has the same story. The tax is retrospective.

*What this means is that if we decide to switch cards at any time, we will pay €120.*

We have paid €40 in April
We pay €40 to close the account 
We pay €40 to open a new account.

This is a complete ripoff! 

Marion :hat


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## rainyday (26 Nov 2003)

> What this means is that if we decide to switch cards at any time, we will pay €120.


Hi Marion - I think this is overstating the problem a bit. Yes - you would have paid €120, but that would have covered you for two full tax years. It's really only the extra €40 that you pay. 

Note that I'm not defending the tax. It should be reverted back to the old rule of a fixed annual fee for each account open on a specific date of the year.


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## Elcato (26 Nov 2003)

Hi Marion - The only answer is to close in Dec/Mar depending on what the correct CC tax year is and re-open a new account in Jan/Apr. This way at least you will only get charged €40 for closing and €40 for opening after the date.
I'm hoping the next budget will give clear indications on this charge and the actual time being paid for. Hopefully someone will bring it up on the telly debates around the time.


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## Marion (27 Nov 2003)

Hi Elcato

You are right.There is a complete lack of clarity in relation to this issue. 

I was hoping to do a balance transfer and so I don't think I would have control over the dates. 


Marion :hat


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## daltonr (1 Dec 2003)

ALL of my christmas shopping is being done online this year and with foreign companies.  Saving much more than €40 when compared to prices in Irish shops, and depriving Charlie of his VAT to boot.  Postage from the UK for everything I bought worked out less than a days parking in Dublin city.

Send your money out of the Irish Economy this Christmas.  It's what your government apparently wants you to do.

Honestly I think Charlie couldn't figure out a way of making money from online purchases, and that's where the €40 came from.  Well, so be it.

I don't expect any change in the Budget, and I certainly don't expect any clarification.

-Rd


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