Raisin interest rates-witholding tax query

[liam bourke]

When selecting a rasin back to open an account with,

Are you better to select ones that have no withholding tax or ones that have a withholding tax?

For example, this bank Bluor Bank has a withholding tax of 25.5% which can be reduced down to 10% if your pvide documentation.
After that, do revenue still charge 33 DIRT on the interest or is it reduced to 23% (33-10)?


In Latvia, a withholding tax of 25.5% will be levied on interest payments from the 1st of January 2025. You can reduce this to 10% by providing the relevant documentation to Raisin Bank who will forward it to our partner bank on your behalf. Please check the product information sheet for further information.

 

[johncb]

If you earn €100 in interest, you declare that on your tax return - so it charges you 33% DIRT (plus maybe PRSI at 4.1%). If you have paid any withholding tax, you enter that on a separate field and you get a tax credit for that amount. So a roundabout way of saying you pay Revenue 33% minus whatever withholding tax you've paid.

If your intention is to be compliant and declare all interest earned for DIRT, I don't see the point in avoiding accounts in countries with withholding tax.

 

[Lightning]

The only advantage of choosing a provider that does not deduct foreign tax at source is you will have less hassle as you won't have to claim back part of foreign tax (where applicable) and also less hassle getting a deduction for tax already paid from the Revenue.

If you simply want the highest return, and don't care about the tax steps, then obviously just choose the highest rate.

 

[Persius]

Personally, I would avoid a bank in a country that applies a withholding tax if I could get a roughly similar rate from a bank in a country that doesn't apply a withholding tax. I'm willing to sacrifice a small bit of interest to avoid having to try to reclaim back withholding tax from a foreign jurisdiction where there may be language issues.

 

[Cooler_box]

Speaking from experience, I would echo the comments made by Persius and Lightning. I opened an account with BGP and overlooked to return the withholding tax forms before my savings matured in July 25. I'm now in the process of trying to reclaim it directly, and it's not without difficulty. I sent the forms with an accompanying letter, in Portuguese, to the Revenue in Portugal in January, and I haven't had as much as an acknowledgment from them. But then Revenue Ireland still haven't returned the forms I sent to them from the Latvian Bank, sent around the same time. I note that BGP levy 28% WHT on their savings, and one can only claim 15% back against the 33% WHT here in Ireland. So, if I'm not mistaken, unless one can claim the remaining 13% from Portugal, the total WHT on one's savings would be 46%? Had I sent the tax forms back to Raisin, would the WHT been fully reimbursed? Perhaps someone here who has invested with BGP can confirm?

 

[Gregor1]

Raisin said they didn't receive the tax forms I sent them for a BPG deposit re Portuguese withholding tax, and the full 28% was taken. I wouldn't choose a deposit with foreign withholding tax again.