ETF Dividend Tax on Form 11

[richiculous]

Hey folks, I have a question about submitting the Form 11 online and including the amount received by me from ETF dividends. It's my first time to complete a Form 11 (cannot complete normal Form 12 as living abroad now) here's some more info about my situation:

• I've been living abroad since March 2022, therefore I was ordinarily resident for 2023
• I received dividends from 2 ETFs in 2023 (Vanguard FTSE All-World UCITS ETF USD and Vanguard S&P 500 UCITS ETF USD)
• I attempted to complete tax return and declare dividends in Form 12 online but I couldn't do that as I'm living abroad now and Revenue advised me to complete a Form 11

My understanding from reading the revenue residency guidelines is that investment income less than €3,810 is not taxable for people who have left Ireland and are ordinarily resident.

'If you leave Ireland after this time, you continue to be ordinarily resident for three consecutive tax years. For these three years you must pay Irish tax on your worldwide income except for:...

other foreign income, for example, investment income, if it is €3,810 or less. If it is more than €3,810, the full amount is taxable.'

My next point to mention is that I attempted to declare my total received dividends (much less than €3,810) amount under 'Offshore Funds' in the Form 11 as it specifically mentions the 41% tax rate (referred to a guide which mentions that). When I proceed to the Calculate section, the form doesn't seem to consider what I mentioned above about tax not being payable if you are ordinarily resident and the income was less than €3,810, so therefore it gives me a tax payable amount of 41%.

I suppose my question is this: Am I misunderstanding the revenue guidance and tax on dividend income from ETFs is payable at 41% for ordinary residents? Or, am I using the form an incorrect way? Appreciate any thoughts on this.

Thanks

 

[AAAContributor]

I attempted to complete tax return and declare dividends in Form 12 online but I couldn't do that as I'm living abroad now and Revenue advised me to complete a Form 11

I'd double check this. If income less than €3,810 is exempt from Irish taxation, then are you obliged to file a return at all?

If you are non-resident, it is worth looking at the Double Tax Treaty (if any) between your country of residence and Ireland. I suspect that the income received from the above funds would most likely come under the Article 'Income not expressly mentioned' in the Model Treaty and so according to that Article, the income is taxable only in your country of residence. If so, a Form 11 shouldn't be required.

 

[richiculous]

Thanks for your reply. I'm not sure, my understanding was that filing was still necessary for completeness I suppose but you might be right if the amount is less than €3,810, maybe it's not needed. I sent an enquiry to Revenue over the weekend so I will see what they reply with.

The country is the Netherlands. There is a Double Taxation Treaty but honestly, I was a bit out of my depth when looking through it before.

 

[richiculous]

I'd double check this. If income less than €3,810 is exempt from Irish taxation, then are you obliged to file a return at all?

If you are non-resident, it is worth looking at the Double Tax Treaty (if any) between your country of residence and Ireland. I suspect that the income received from the above funds would most likely come under the Article 'Income not expressly mentioned' in the Model Treaty and so according to that Article, the income is taxable only in your country of residence. If so, a Form 11 shouldn't be required.

Hi @AAAContributor I still haven't received an answer from Revenue but I did a bit more digging into the double taxation treaty.

There is Article 10 'Dividends' but I'm not sure that it applies to ETFs:

1. Dividends paid by a company which is a resident of a Contracting State to a resident of the other Contracting State may be taxed in that other State.

What I can see in Article 20 'Other income' is the following:

1. Items of income of a resident of a Contracting State, wherever arising, not dealt with in the foregoing Articles of this Convention shall be taxable only in that State.

As far as I can tell, this aligns with what you said above about certain income only being taxable in the country of residence.