# Taxation on savings outside of Ireland?



## Gerald Boss (18 Feb 2011)

Hello. I am considering opening a savings account outside of Ireland. In Ireland we pay 27% dirt on the interest earned which the bank takes care of but what is the procedure if a person has savings outside of Ireland, ie what sort of rate would I pay on the interest and how do I declare it?

Gerald


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## DB74 (18 Feb 2011)

You are taxed at your marginal (highest) tax rate and you must declare the interest earned income on a Form 11 or Form 12


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## Gerald Boss (18 Feb 2011)

Thank you DB. So I would in fact pay more tax than if I left my money in Ireland in that case.


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## DB74 (18 Feb 2011)

If you currently pay tax at 41% rate then yes


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## jpd (18 Feb 2011)

Deposit interest on accounts within the EU is taxed exactly in the same way as deposit accounts in Ireland ie the interest is taxed at the DIRT rate. Anything else would break EU competition rules.

The interest has to be declared using a Form 11 annually. In addition, the different tax authorities may swop information on deposit holders.


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## DB74 (19 Feb 2011)

jpd said:


> Deposit interest on accounts within the EU is taxed exactly in the same way as deposit accounts in Ireland ie the interest is taxed at the DIRT rate. Anything else would break EU competition rules.


 
This is totally incorrect


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## jpd (19 Feb 2011)

> What rate of tax applies in the State on my foreign deposit interest?
> A. This depends on the location of the financial institution. If it is located in another EU country, tax on the gross interest earned is due at the same rate as tax on Irish deposit interest income – 20% up to 31st December 2008, 23% for the period 1st January 2009 to 7th April 2009 and 25% from the 8th April 2009. In order to avail of this treatment, you must make a timely and accurate return of the foreign deposit interest and pay any tax due by the prescribed return filing date for the year concerned.
> If the interest is earned from a financial institution outside the EU, tax is due at your marginal (highest) rate of tax.
> Prior to 1 January 2005, all foreign deposit interest income, including interest from another EU country, was taxable at the marginal rate – that is, the higher or highest rate at which you pay income tax. Since 1 January 2007 the higher rate of income tax in Ireland has been 41%.[\QUOTE]
> ...


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## jpd (19 Feb 2011)

jpd said:


> > What rate of tax applies in the State on my foreign deposit interest?
> > A. This depends on the location of the financial institution. If it is located in another EU country, tax on the gross interest earned is due at the same rate as tax on Irish deposit interest income – 20% up to 31st December 2008, 23% for the period 1st January 2009 to 7th April 2009 and 25% from the 8th April 2009. In order to avail of this treatment, you must make a timely and accurate return of the foreign deposit interest and pay any tax due by the prescribed return filing date for the year concerned.
> > If the interest is earned from a financial institution outside the EU, tax is due at your marginal (highest) rate of tax.
> > Prior to 1 January 2005, all foreign deposit interest income, including interest from another EU country, was taxable at the marginal rate – that is, the higher or highest rate at which you pay income tax. Since 1 January 2007 the higher rate of income tax in Ireland has been 41%.[\QUOTE]
> > ...


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## DB74 (20 Feb 2011)

I apologise jpd - you are correct


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## meular (3 May 2011)

*Taxation on savings outside of Ireland*

Is the Isle of Man considering to be in the EU?  In other words, is bank interest charged at the usual DIRT rate or at the marginal tax rate?


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## Slim (4 May 2011)

meular said:


> Is the Isle of Man considering to be in the EU? In other words, is bank interest charged at the usual DIRT rate or at the marginal tax rate?


 
seems to be...
"_The Island is a Crown Dependency that, through its ancient parliament, Tynwald, enjoys a high degree of domestic legislative and political autonomy. The United Kingdom Government is, by convention, responsible for the conduct of the external relations and defence of the Island. The Isle of Man's economic and social achievements would not have been possible without the stability that its constitution and institutions provide. Her Majesty the Queen as Lord of Mann is Head of State. Her personal representative on the Island is His Excellency the Lieutenant Governor, who is appointed by the Crown for a five-year term_."

From Isleofman.com


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## Slim (4 May 2011)

I correct myself...
"The Isle of Man is not part of the European Union but it has a special, limited, relationship with the EU set out in Protocol 3 to the United Kingdom's Treaty of Accession."  [broken link removed]


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## Slim (20 Oct 2011)

If you have a deposit in the UK with a fixed term deposit and the interest will be paid at the end of the term, say 4 years, do you calculate one year's interest each year and declare this or do you declare the lot at the end?


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## Gervan (20 Oct 2011)

Your deposit interest is taxable in the year actually received. 
Which can be unfortunate when the tax rate increases.


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## Slim (20 Oct 2011)

Gervan said:


> Your deposit interest is taxable in the year actually received.
> Which can be unfortunate when the tax rate increases.



Thanks - True!


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## M K Brazil (21 Oct 2011)

Note - 27% tax rate on EU interest only available if the individual's tax affairs are in order - so a late submission can lead to marginal tax rates applying. Also note that you are required to disclose the opening of the account.

Might be worth considering using Irish branch of UK bank instead.


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## Slim (21 Oct 2011)

M K Brazil said:


> ..Also note that you are required to disclose the opening of the account..


 
How do you do that? On the annual tax return, form 11 or 12?


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## PolkaDot (27 Feb 2012)

Anyone know is it possible to declare interest earned on foreign deposits using PAYE online website? Or do you have to fill in a form and send to the Revenue?


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