I've been reading up on when DIRT applies to investments and I'm not sure if it applies to the cash account in Trading 212.
The legislative basis for DIRT in Ireland is S256+S257 of the TCA Act 1997 and section 267M of the same Act for deposits from other EU countries.
Sections 256 and
257 provide, in essence, that DIRT applies to
interest gained from
relevant deposits.
"Interest" is defined as: "
any interest of money whether yearly or otherwise, including any amount, whether or not described as interest, paid in consideration of the making of a deposit, and, as respects a building society, includes any dividend or other distribution in respect of shares in the society; but any amount consisting of an excess of the amount received on the redemption of any holding of A.C.C. Bonus Bonds — First Series, issued by ACC Bank plc, over the amount paid for the holding shall not be treated as interest for the purposes of this Chapter;"
A "
deposit" is defined as:
"a sum of money paid to a relevant deposit taker on terms under which it will be repaid with or without interest and either on demand or at a time or in circumstances agreed by or on behalf of the person making the payment and the person to whom it is made;"
A "
relevant deposit" is defined as a deposit held by a "
relevant deposit taker" subject to
eight specific exceptions. These apply where the deposit:
1. Is made by, and the interest on which is beneficially owned by—
(i) a relevant deposit taker,
(ii) the National Treasury Management Agency,
(iii) the State acting through the National Treasury Management Agency,
(iv) the Central Bank of Ireland, or
(v) Icarom plc,
2. is a debt on a security issued by the relevant deposit taker and listed on a stock exchange,
3. in the case of a relevant deposit taker resident in the State for the purposes of corporation tax, is held at a branch of the relevant deposit taker situated outside the State,
4. which, in the case of a relevant deposit taker not resident in the State for the purposes of corporation tax, is held otherwise than at a branch of the relevant deposit taker situated in the State,
5. which is a deposit denominated in a foreign currency made—
(i) by a person other than an individual before the 1st day of January, 1993, or
(ii) by an individual before the 1st day of June, 1991,
but, where on or after the 1st day of June, 1991, and before the 1st day of January, 1993, a deposit denominated in a foreign currency is made by an individual to a relevant deposit taker with whom the individual had a deposit denominated in the same foreign currency immediately before the 1st day of June, 1991, such a deposit shall not be regarded as a relevant deposit,
6. which is made on or after the 1st day of January, 1993, by, and the interest on which is beneficially owned by—
(I) a company which is or will be within the charge to corporation tax in respect of the interest, or
(II) a pension scheme,
and
(ii) in respect of which a declaration of the kind mentioned in section 265 has been made to the relevant deposit taker,
7. in respect of which—
(i) no person resident in the State is beneficially entitled to any interest, and
(ii) a declaration of the kind mentioned in section 263 has been made to the relevant deposit taker, or
8. (i) the interest on which is exempt—
(I) from income tax under Schedule D by virtue of section 207 (1)(b), or
(II) from corporation tax by virtue of section 207 (1)(b) as it applies for the purposes of corporation tax under section 76 (6),
and
(ii) in respect of which a declaration of the kind mentioned in section 266 has been made to the relevant deposit taker;
A
"relevant deposit taker" is defined as
(a) a person who is a holder of a licence granted under section 9 of the Central Bank Act, 1971 , or a person who holds a licence or other similar authorisation under the law of any other Member State of the European Communities which corresponds to a licence granted under that section,
(b) a building society,
(c) a trustee savings bank within the meaning of the Trustee Savings Banks Acts, 1863 to 1989,
(d) ACC Bank plc,
(e) ICC Bank plc,
(f) ICC Investment Bank Limited,
(g) the Post Office Savings Bank;
Section 267M of the Act essentially applies the provisions of
section 256 and
257 mutatis mutandis to “
specified interest”. This means interest arising in an EU Member State
which would be deposit interest subject to deposit interest retention tax (DIRT) if it were payable in Ireland.
The definition of “
relevant deposit taker” mentioned above is adapted for the purposes of “
specified interest”. If the EU institution providing the deposit is equivalent to a bank (which already includes EU banks), a building society (which is defined separately in section 256(1) to include EU building societies), a trustee savings bank, a credit union or the Post Office Savings Bank then DIRT will apply.
Summary
It appears that DIRT only applies to interest gained from deposits in other EU countries where the provider of the deposit product is
equivalent to one of the bodies listed in the Irish definition of a "relevant deposit taker" – i.e. they are equivalent to a licensed bank, a building society, a trustee savings bank, a credit union or a Post Office Savings bank.
So, while DIRT would apply to Trade Republic and N26 because they provide deposit products and are both German banks, DIRT would
not apply to a deposit product offered by Trading 212 because it is not equivalent to a licensed bank, a building society, a trustee savings bank, a credit union or a Post Office Savings bank.
The above view has been informed by my reading of the revenue guidance on the relevant sections here:
https://www.revenue.ie/en/tax-professionals/documents/notes-for-guidance/tca/part08.pdf
Completely possible I've gotten something wrong. The fact that you may not have a stake in the QMMF Trading 212 invests in seems completely irrelevant to the question as to whether DIRT applies to the product.