Tax on Dividends

Hi,

Does anyone know when tax on dividends is due for payment to the revenue (is it right after you receive them or at the end of the year) and what form from the revenue needs to be filled out.

Cheers.

Dividends are normally paid with 20% tax deducted. When you complete your Form 12 you should include details of the dividend here. If you pay tax at 42% then you will have pay an additional 22% to revenue.

Thanks for that.

When are the dividends actually due for payment to the revenue if I recenived them in december 2005 for example since those forms don't need to be submitted towards the end of 2006.

By Oct 31 2006 afaik

Cheers. Sounds about right going on the details in the forms.

Hi

I find this unfair, why have to pay 42% tax on income which is generated through a "risk" - namely an investment in shares where your capital is guaranteed.

Am I correct in thinking, if you buy a share with a reinvestment plan and subsequently redirect all future dividends into this reinvestment plan, you would only have to pay tax at 20% on disposal of the share ? (sounds much more fair, but almost too good to be true for little old Ireland)

Cheers

G>
http://www.rpoints.com/newbie

As far as I know the normal income tax is payable on dividends even if they are reinvested through a dividend reinvestment programme rather than taken as cash.

If an Irish citizen,resident in Ireland, buys ADRS of an Irish EQUITY (say CRH),
through brokerage account in the USA(eg TDameritrade)
how are the dividends treated for tax.?

Garrettod said:

Am I correct in thinking, if you buy a share with a reinvestment plan and subsequently redirect all future dividends into this reinvestment plan, you would only have to pay tax at 20% on disposal of the share ? (sounds much more fair, but almost too good to be true for little old Ireland)

Click to expand...

Clubman you are spot on - You will still pay income tax on the deemed dividend notwithstanding the fact that you never received the cash the deemed dividend is the amount of proceeds reinvested and taxable at your marginal
On the subsequent diposal cgt may arise on any gain at 20%
so the net effect is the same as if you received a dividend in cash form and bought additional shares with it

in relation to your comments about ireland not having a fair taxation system i think you incorrect. ireland has an extremely fair taxation system if you make money you should pay more tax its as simple as that...........if everyone paid their fair share there probably would be scope to reduce income tax rates.......it was not to long ago when the capital gains tax rate was 40%, remember?, for example the cgt rate is 25% in france

In some cases it's advantageous to pay income tax rather than CGT, say a pensioner relying only on dividends as a main source of income. In this case that person will be able to avoid paying any tax until the tax threshold is exceeded.

CGT in a lot of countries is equivalent with the top rate of income tax, we're a little unusual with our current rates. There's nothing to stop some government in the future increasing the CGT rate to higher than the top income tax rate.