Scrip Dividends/Taxation

Hi folks,

I am a PAYE worker.

My question is this:

If I get a dividend of €100 from company B I should pay income tax of about 50% on that dividend at the end of the financial year is that correct?

If someone could post the calculation I would be thankful.

If however I decide to take the dividend in the form of script i.e shares in the company do I pay tax at the end of the financial year or do I pay tax when I sell my shares in the future?

Regards

Extramild

Check out The taxation of Irish dividend income

If you take shares instead of cash, you will get the same dividend certificate showing Gross Dividend/DWT/Net Dividend . The net dividend will be used to buy the shares.

You will pay income tax on the dividend as if you had received cash.

Thanks for getting back to me Brendan,

A couple of assumptions

1. I get €100 in dividends from Company A
2. I am a PAYE worker earning above 16k a year.

Part One - There will be a 20% deduction in dividend withholding tax taken by the company and given to the taxman that I will never see?

Part Two - Of the €80 euro left I will have to declare that income to the revenue and will pay the USC and PAYE rates on that money i.e I will pay approx 50% of that €80 in tax.

Of the 100 euro that company declared in dividends I will end up with approx €40 in my pocket?

not quite:
100 div less withholding tax 20 = 80 to you

you pay tax on the gross = 50% of 100 = 50 -- less the 20 already paid = 30

total Div 100
Total Tax & USC 50
Net 50