Foreign Bank Accounts

WizardDr

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Fiona Reddan has an article in todays Irish Times where she is quoting Revenue about the scale of the transfer of deposits out of the jurisdiction which presumably has been revealed b the minority of people who file a tax return.

What did she mean when she says:

"..Taxpayers filing on a self-assessed basis must disclose data on foreign bank accounts, as interest earned is subject to income tax, rather than deposit interest retention tax, as is the case with domestic deposits. The figures above do not include PAYE taxpayers, who may have declared their foreign bank holdings through a local tax office.."

Is anybody aware of what this declaration [the local tax office declaration] referred to above or is this a case of a mistake as in as 1m+ PAYE taxpayers DO NOT file a return that this element of her story is er .. a fiction as its a new one to me.
 
"..Taxpayers filing on a self-assessed basis must disclose data on foreign bank accounts, as interest earned is subject to income tax, rather than deposit interest retention tax, as is the case with domestic deposits.

Some foreign deposits, if inside the EU, are subject to the same rate of deposit interest tax as domestic deposits.

Most non-EU deposits are subject to the marginal rate of income tax. However, since 2012, if the marginal rate of tax is not 41% then rate applied is still 41%.

But, yes, taxpayers filing on a self-assessed basis, must advise the Revenue of deposit interest earned and the relevant pay tax on it.

The figures above do not include PAYE taxpayers, who may have declared their foreign bank holdings through a local tax office.." Is anybody aware of what this declaration referred to above or is this a case of a mistake as in as 1m+ PAYE taxpayers DO NOT file a return that this element of her story is er .. a fiction?

This declaration is part of the normal tax return filling. There is far from a 100% compliance rate.
 
@CiaranT - I intended to refer to "..[T]he figures above do not include PAYE taxpayers, who may have declared their foreign bank holdings through a local tax office.."

Is anybody aware of these special local arrangements?
 
Some foreign deposits, if inside the EU, are subject to the same rate of deposit interest tax as domestic deposits.

Most non-EU deposits are subject to the marginal rate of income tax. However, since 2012, if the marginal rate of tax is not 41% then rate applied is still 41%.

Hi Ciaran,

Would you have any links about this?

Thanks, Liam
 
Hi Liam,

Here you go ...

[broken link removed]

Where deposit interest is
received on or after 8th
February 2012 from financial
institutions in non-EU
countries, this interest is taxed
at the same rate as deposit
interest received by individuals
from lending institutions in
Ireland where the individual is a
standard rate taxpayer
and the
associated tax return is filed by
the return filing date.

In other words, even if you are a lower band tax payer, you will pay 41% on non-EU deposit interest.
 
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