# DIRT rate explanation



## inasoup (25 Nov 2009)

Could somebody please explain to me what DIRT  rate means? I have a special bonus saver account with BOI. I have been saving 100E every month since nov 2007 in this account. I got a letter that I will be charged 25% DIRT RATE .  Nobody picks up the phone when i call my bank, it goes to voice mail. I would like to know if I will be charged 25% of what I saved till now or what exactly does it mean???


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## pjmn (25 Nov 2009)

*Re: DIRT rate explaination*

DIRT - stands for Deposit Interest Retention Tax.  Current rate is 25%.  It relates to the interest you receive on your savings - not the savings itself.

e.g. If you had E1,000 on deposit for a year at say 4% interest rate.  You would have earned E40 in interest - your bank is obliged to withold 25% of that figure - in this case E10 and pay that over to the Government - you get to keep the E30 (plus your savings).

Hope that helps...


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## inasoup (25 Nov 2009)

*Re: DIRT rate explaination*

Thank you soooo much..I was really scared they will take of 25% of the money I saved. phew..


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## OPTIMUM (25 Nov 2009)

*Re: DIRT rate explaination*



inasoup said:


> Thank you soooo much..I was really scared they will take of 25% of the money I saved. phew..



Not yet anyway, don't be giving Lenny ideas for the budget! 
I am surprised that you actually thought you would lose 25pct a year though....suggest you read more financial advice sites like AAM more often!


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## roker (26 Nov 2009)

*Re: DIRT rate explaination*

Over 65 yrs, you can apply for DIRT exemption by simply filling in a form at the bank


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## sunrock (26 Nov 2009)

*Re: DIRT rate explaination*

That exemption needs to be got rid of ...well for the first 1000e of interest anyway.
Also I suspect the dirt rate will rise in this budget coming up..maybe to 30%.


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## crabbybear (26 Nov 2009)

*Re: DIRT rate explaination*

Thought the only new tax was carbon and didn't think he was increasing any tax, all was going to be expenditure cuts, Don't be giving him ideas to screw us more.


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## OPTIMUM (5 Dec 2009)

*Re: DIRT rate explaination*

Crabbybear,
The effect of every 1% increase in DIRT based on the 86bln savings (which 36bln of which earns 0.63% see [broken link removed], would be meaningful return to the state, and would be tax better sourced than cutting childrens allowances for the low income.
86bln @ 1% = 860m gross interest, every 1% DIRT generates (assume all pay tax)  8m. Its doesnt make much of  a dent in the finances of the state but every little helps.  And if interest rates rise, obviously the tax goes up. 
it might help get people spending their interest also.


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## crabbybear (5 Dec 2009)

*Re: DIRT rate explaination*

25% is high enough as far as I'm concerned especially for retired people dependant on their life savings . Again, you can go into a whole debate but I think there alot of wealthy people and high earners who shouldn't be getting childrens allowance. The other side of the argument why should people who haven't worked a day in their life get large handouts from the state.


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## ardmacha (5 Dec 2009)

Am I correct in saying that DIRT is regulated by the European Union Savings Directive and is subject to a maximum rate, so I do not think that they can increase it. 



> The other side of the argument why should people who haven't worked a day in their life get large handouts from the state.



Perhaps because they are elected.


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## Lightning (5 Dec 2009)

*Re: DIRT rate explaination*



crabbybear said:


> 25% is high enough as far as I'm concerned especially for retired people dependant on their life savings



Those 65+ are exempt from DIRT.



> Am I correct in saying that DIRT is regulated by the European Union Savings Directive and is subject to a maximum rate



Nope, the EUSD and DIRT are two totally different things.


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## alexcoll (10 Dec 2009)

I think that over 65's are only exempt from DIRT if income (including gross interest) is below certain threshold, currently 20000 for singles and 40000 for married couples


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## Lightning (11 Dec 2009)

Yeah, spot on, 

See http://www.revenue.ie/en/tax/dirt/leaflets/de1.html



> 3. Qualifying conditions
> In order to claim exemption from DIRT you must complete a declaration form stating that you or your spouse (if you are married) meet the following conditions:
> 
> Either you or your spouse (if appropriate) are aged 65 or over when making the declaration
> Your and your spouse's (if appropriate) total income for the year will be below the relevant annual exemption limit.


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## yram (1 Jan 2010)

I have an amount with rabo - interest is 2% at the moment.

I usually look forward to new years eve as this is when the interest is applied - nothing to celebrate this year.

Last year the amount earned around 8 hundred and something, and I got seven hundred and something after DIRT was applied.

This year the amount earned around 450 interest, and I got around 350 after DIRT.

How its all changed....


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## camlin90 (1 Jan 2010)

yram said:


> How its all changed....



Oh well - that's what you get for inertia - plenty of better rates out there if you could be bothered availing of them!

Rabo, BoI, AIB etc make their money out of people like you.


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## pudds (1 Jan 2010)

yram said:


> I have an amount with rabo - interest is 2% at the moment.
> 
> I usually look forward to new years eve as this is when the interest is applied - nothing to celebrate this year.
> 
> ...



indeed I had 10k in a 3yrs credit union a/c and got zero interest for this its first year..... so put it in Savings Bond instead.


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## yram (1 Jan 2010)

What exactly do you mean by "people like you"?

I am comparing Rabo this year to last year.

Did I say anything about any other provider?


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## camlin90 (4 Jan 2010)

yram said:


> What exactly do you mean by "people like you"?
> 
> I am comparing Rabo this year to last year.
> 
> Did I say anything about any other provider?


Sorry perhaps that sounded bad, but people who won't switch have no right to complain when they get next to no interest...
By watching the best buys you could have locked into rates as high as 6% at the start of last year. Even now Halifax are paying almost twice what you're getting with Rabo. Of course, Rabo not complaining. If people vote with their feet though they might be forced to be competitive!


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## duchalla (5 Jan 2010)

Did DIRT go up in the budget?


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## WaterSprite (5 Jan 2010)

duchalla said:


> Did DIRT go up in the budget?



Not this last budget (Dec '09), no.


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## duchalla (5 Jan 2010)

Cheers Watersprite,

Knew it went up 5% in the budget in April 09, wasn't sure about the December budget.


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## Lightning (5 Jan 2010)

DIRT did not go up 5% in April 2009.

There were 3 budget is 2009, DIRT went up in 2 separate smaller increments.


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## Horatio (6 Jan 2010)

Non residents are also DIRT exempt.


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## levelpar (13 Jan 2010)

> That exemption needs to be got rid of ...


 
Yeah!  Lets screw the older generation


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