Dutch dividends double withholding tax

[FintanJ]

I have shares in a Dutch listed company.

Dutch dividend withholding tax at 15% was deducted on payment.

My broker has deducted Irish DWT of 25% on the net above received.

I have been subject to withholding tax twice.

Is this correct treatment by broker? Anyone experience the same?

Will I be able to get credit for both when I file my tax return,?

 

[S class]

You will get full credits for both witholding taxes.

You will then pay Irish USC, prsi and income tax at your marginal rate on the gross value of the dividends.

 

[Itchy]

My broker has deducted Irish DWT of 25% on the net above received.

Its 'encashment tax' rather than DWT.

Foreign dividends received by an Irish tax resident individual may suffer Irish Encashment Tax. You are entitled to a credit against your Income Tax liability for the Encashment Tax.

Dividend income

This page explains about dividend payments

www.revenue.ie

 

[ashambles]

If someone had no other income but dividend income, and earned 20,000 a year from dividends, how would credits work for these Dutch shares?

Do the credits help in that case, or are they looking at living off closer to 10k after taxes?

It seems some retired people in the US and UK live mainly off dividend stocks, but presumably they're investing in their own countries stocks so don't need to deal with foreign DWTs. (Irish share investors don't really have the option of avoiding foreign DWT)

 

[Ciru75]

If someone had no other income but dividend income, and earned 20,000 a year from dividends, how would credits work for these Dutch shares?

Do the credits help in that case, or are they looking at living off closer to 10k after taxes?

It seems some retired people in the US and UK live mainly off dividend stocks, but presumably they're investing in their own countries stocks so don't need to deal with foreign DWTs. (Irish share investors don't really have the option of avoiding foreign DWT)

The calculation of the credit on the foreign tax in that case is quite complicated. See example 2 on page 13 here.

The tax due would be quite small though including USC and PRSI. The Irish encashment tax would be allowed in full against that and any excess would be refunded.

 

[S class]

Somebody with 20k dividend income and no other income....

20k @ 20% income tax = 4k
No earned income, so no earned income credits.
Personal credits = 2k

Income tax 4k - 2k - any double taxation and encashmenr tax credits.

Prsi @ 4.1% of 20k (class S)

USC at same rates as earned income on 20k.