Dividend tax and personal CGT allowance

J

jodonova

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Hi,
I am earning a small amount from dividends of about €100 per year approximately from a small share portfolio. I am wondering if I need to declare this income for income tax purposes or can I offset the dividend income against the personal CGT exemption of €1270 and therefore not have to declare it?

Thanks,
Jonathan
 
Depending on what shares and where you hold them, you may have had tax deducted from the dividend payments
 
Ok, thanks.

The shares are are in US equities and I have a W8-BEN so 15% is already deducted by my US brokerage account before being credited to my brokerage current account.

So, say I earn in dollars the equivalent of €200 in dividends this year.

If I am paying tax at 40%, then I would owe revenue 40%-15% = 25% of €200 which would be €50 of income tax?
 
Correct, well almost
The tax is 40% of €200 = 80 less foreign tax credit of 30 - same result but different method of arriving
There may be PRSI and/or USC as well
 
Thanks. So, for the purpose of illustration, if my gross income is €50,000 per annum then on a €200 dividend I would pay to Revenue

Income Tax €200 @25% : €50
PRSI €200 @4% : €8
USC €200 @4.5% : €9

Total Tax (not including US Dividend tax @15% pre deducted) : €67
 
That looks correct - when you file your tax return, it will calculate the PRSI and USC as applicable
 
That is effectively what happens - the gross income is taxed at 40% and then he gets a tax credit for the tax paid in the US
 
Could somebody clarify to me.
I pay income tax at 20% rate.
Received dividends from Canadian company. They charged me 25% on dividends I received.
So how much I will owe to revenue? I know that I have to pay prsi and usc on gross amount. Could somebody do calculation as an example.
Thanks
 
auriusk said:
Could somebody clarify to me.
I pay income tax at 20% rate.
Received dividends from Canadian company. They charged me 25% on dividends I received.
So how much I will owe to revenue? I know that I have to pay prsi and usc on gross amount. Could somebody do calculation as an example.
Thanks
Click to expand...
You declare the gross amount of the dividend in euros - so lets say you got € 100 of dividend and the Canadians withheld 25% so you got € 75
Obviously, they paid you in $ so you will have to convert the $s to €s using the appropriate exchange rate

You also declare the tax they are entitled to withhold according to the double taxation treaty - see here [broken link removed]

This is 15% or € 15. You will get a credit for this from the Irish Revenue
So your tax due is € 100 at your marginal rate ie 20% so you owe € 20 less the € 15 tax credit = € 5 extra

As the Canadians deducted more (25%0 than they should have (15%), you can apply to the Canadian tax authority for a refund of the extra tax paid in Canada ie 10%

So in the end you have
Gross dividend € 100
Canadian tax € 15 after paying € 25 and recovering € 10
Irish tax € 5

PRSI and USC may also be due - another 5% or so
 
Thank you for explaining.
So as I understand, if Ireland has double taxation agreement with countries from where we receive dividends, we getting some credits. Let's say 15%. What is above that, we can only claim from other country's tax authority.
100eur gross - 25%(Canadian tax)-20%(Irish revenue my rate) -4% (Prsi) - 4.5% (USC) +15% tax credit
In total 38.5% will be deducted and 10% I can claim from Canadian tax authority.
 
sorry to drag this thread up again. I'm struggling with the Form11 calc

I have canadian divs of Gross 46.76 EUR/Net 39.75 EUR

When i add this to Form 11 under the Canadian dividends line (Canadian Dividends which did not suffer Irish tax on encashment), this is giving me a taxable amount of 15.74 (on 47EUR Gross).

Thats approx 34% (plus 15% wht already paid =50%). Does this sound right to people?

appreciate we're taking small amounts here, but i'd rather know how to do this 100%
 
Looks correct, but with knowing your marginal tax rate it is difficult to be more precise - the details will be in the Form 11 calculation sheet
That will show the double taxation credit and other figures to check the calculation such as your effective Irish tax rate

I do not what you mean by 15.74 taxable amount - what is this?
 
the 15.74 is the increase in tax payable from adding in the gross dividend of 46.76 to the Form 11 computation. Apologies if that was unclear.
 
Then it is correct. if you exmaine the amounts in the Calculate tab with and without the 46.76 you will see how it affects the different totals and this will help to understand the calculation
 
It looks like your marginal rate of tax and PRSI is 48.5% (40% income tax, 4.5% USC and 4% PRSI). The tax on the dividends is €46.76 @ 48.5% = €22.68
Less the €7.01 paid in Canada gives €15.67 which matches to within a few cents.
 
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