That's my understanding too. I would think that Revenue cannot discriminate between Irish deposit interest and other EU deposit interest. i.e. I would think that the €5,000 threshold applies regardless of whether the deposit interest is Irish or from another EU country.
Withholding Tax - Foreign Deposits
- Thread starter Freelance
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That's my understanding too. I would think that Revenue cannot discriminate between Irish deposit interest and other EU deposit interest. i.e. I would think that the €5,000 threshold applies regardless of whether the deposit interest is Irish or from another EU country.
On this page: https://www.citizensinformation.ie/...d-investments/deposit-interest-retention-tax/
There is a section that says: If you have paid DIRT you do not have to pay any further income tax orUniversal Social Charge on the interest, but the interest is declared as incomeif you are making a tax return. However,in some circumstances, you may have to pay PRSI on deposit interest you have received.
Which links to : https://www.citizensinformation.ie/...si/social_insurance_in_ireland.en.html#l09b20
But this page doesn't load for me.
There is a section that says: If you have paid DIRT you do not have to pay any further income tax orUniversal Social Charge on the interest, but the interest is declared as incomeif you are making a tax return. However,in some circumstances, you may have to pay PRSI on deposit interest you have received.
Which links to : https://www.citizensinformation.ie/...si/social_insurance_in_ireland.en.html#l09b20
But this page doesn't load for me.
podgerodge
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Yes, Revenue could be clearer. Here's their page:
www.revenue.ie
DIRT is a final liability tax, meaning that the financial institution deducts the tax before they pay you the interest. You can request a statement from your provider of the amount of DIRT they deducted. It is up to the financial institution to decide if a deposit is subject to DIRT.
In some circumstances, you may also have to pay Pay Related Social Insurance (PRSI) on the interest you received.
Deposit Interest Retention Tax (DIRT)
This page explains what Deposit Interest Retention Tax (DIRT) is
www.revenue.ie
DIRT is a final liability tax, meaning that the financial institution deducts the tax before they pay you the interest. You can request a statement from your provider of the amount of DIRT they deducted. It is up to the financial institution to decide if a deposit is subject to DIRT.
In some circumstances, you may also have to pay Pay Related Social Insurance (PRSI) on the interest you received.
Thank you very much for doing this. It would be great to get clarity. Agree we should stop with the speculative posts until you get an answer. Thanks again.
I have had an answer from the PRSI people and it also clarified other matters.
A PRSI levy of 4% applies to bank interest received and credit unions dividends received and is Class K but isn't reckonable as regards benefits. [Whether uts fair or otherwise there is no lower limit or exemption for most of us].
A PAYE taxpayer therefore must file a Form 12 where non-paye income is less than €5,000 (or otherwise notify Revenue).
You are deemed to be a chargeable person if non-paye income is over €5,000 and must file a Form 11.
A PRSI levy of 4% applies to bank interest received and credit unions dividends received and is Class K but isn't reckonable as regards benefits. [Whether uts fair or otherwise there is no lower limit or exemption for most of us].
A PAYE taxpayer therefore must file a Form 12 where non-paye income is less than €5,000 (or otherwise notify Revenue).
You are deemed to be a chargeable person if non-paye income is over €5,000 and must file a Form 11.
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Revenue have helped create confusion by this type of information:
"DIRT is a final liability tax, meaning that the financial institution deducts the tax before they pay you the interest. You can request a statement from your provider of the amount of DIRT they deducted. It is up to the financial institution to decide if a deposit is subject to DIRT.
In some circumstances, you may also have to pay pay related social insurance (PRSI) on the interest you received. Universal Social Charge (USC) does not apply to deposit interest."
I am clear that PRSI applies in cases under 66 and there is no lower limit of the amount.
"DIRT is a final liability tax, meaning that the financial institution deducts the tax before they pay you the interest. You can request a statement from your provider of the amount of DIRT they deducted. It is up to the financial institution to decide if a deposit is subject to DIRT.
In some circumstances, you may also have to pay pay related social insurance (PRSI) on the interest you received. Universal Social Charge (USC) does not apply to deposit interest."
I am clear that PRSI applies in cases under 66 and there is no lower limit of the amount.
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It seems "..some circumstances, you may also have to pay PRSI.." is a misleading comment by Revenue.
If PRSI is also charged on Form 12, then it's also misleading to talk about DIRT as being 33%, since almost everyone who pays DIRT must pay PRSI.
Revenue are out 4% if someone doesn't declare Irish Deposit interest and 37% if someone doesn't declare non-Irish interest. They've a large incentive to ensure non-Irish interest taxes are paid and relatively little to ensure that PRSI is always paid on Irish deposits.
In the next couple years I expect them to be all over non-Irish deposit interest and if they continue with their ambivalent "you may also have to pay PRSI" for Irish deposits that has a risk of effectively taxing Irish deposits at 33% (if large numbers of taxpayers don't declare the interest) and 37% for non-Irish deposits.
If PRSI is also charged on Form 12, then it's also misleading to talk about DIRT as being 33%, since almost everyone who pays DIRT must pay PRSI.
Revenue are out 4% if someone doesn't declare Irish Deposit interest and 37% if someone doesn't declare non-Irish interest. They've a large incentive to ensure non-Irish interest taxes are paid and relatively little to ensure that PRSI is always paid on Irish deposits.
In the next couple years I expect them to be all over non-Irish deposit interest and if they continue with their ambivalent "you may also have to pay PRSI" for Irish deposits that has a risk of effectively taxing Irish deposits at 33% (if large numbers of taxpayers don't declare the interest) and 37% for non-Irish deposits.
fred123456
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Hi All,
To be honest I am a bit lost. Ok so for the guy investing who will never reach near this 5,000 euro amount what does it mean. I am looking at Raisin and in particular the new rates for the Portuguese bank
Say investing 50,000 @ 4 percent. I declare tax at 33 percent at year end. Surely there is no prsi also.
I see withholding tax here, will need to work it out and see if it's just too much hardship. What do people think.
Kind Regards
Fergal
To be honest I am a bit lost. Ok so for the guy investing who will never reach near this 5,000 euro amount what does it mean. I am looking at Raisin and in particular the new rates for the Portuguese bank
Say investing 50,000 @ 4 percent. I declare tax at 33 percent at year end. Surely there is no prsi also.
I see withholding tax here, will need to work it out and see if it's just too much hardship. What do people think.
Kind Regards
Fergal
BrokeBroker
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I'm kind of miffed I missed the BFF offer on Raisin with no withholding tax.
Trying to get a letter of residence from revenue, you'd swear I was trying to correspond with the pope.
Plus the revenue office locally no longer has a reception desk.
Trying to get a letter of residence from revenue, you'd swear I was trying to correspond with the pope.
Plus the revenue office locally no longer has a reception desk.
Your life might be easier if you actually took on board advice posted on this site in response to your questions.I'm kind of miffed I missed the BFF offer on Raisin with no withholding tax.
Trying to get a letter of residence from revenue, you'd swear I was trying to correspond with the pope.
Plus the revenue office locally no longer has a reception desk.
Lightyear Paying 3.00% Instant Access, No Fees & 20k Protection
Say you lost your phone. As I understand, activity is primarily mediated through the app. Would you not be concerned money in Lightyear would be quite accessible if the thief was able to unlock your phone? Certainly more accessible than money in other locations such as your current account...
www.askaboutmoney.com
BrokeBroker
Registered User
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Your life might be easier if you actually took on board advice posted on this site in response to your questions.
Lightyear Paying 3.00% Instant Access, No Fees & 20k Protection
Say you lost your phone. As I understand, activity is primarily mediated through the app. Would you not be concerned money in Lightyear would be quite accessible if the thief was able to unlock your phone? Certainly more accessible than money in other locations such as your current account...www.askaboutmoney.com
I appreciate the responses, but I'm not sure what that has to do with wanting to avoid having to get a letter of tax residence?
I've attempted on umpteen occasions to contact revenue through the inquiries section of revenue.ie on mylogin, and they simply don't respond except one time to tell me I have no history of tax payments.
It seems local revenue offices also no longer take appointments or are open to the public?
I get it, "write to revenue".
To tell them I'm in full time academia but wish to pay taxes, on the money I'm not earning...... but may have some deposit interesting coming my way?
Besides, to what address? (cause I assume writing to them means using the inquires section of their website).
Given how difficult they are to get in touch with via their inquires section, or on phone, and they don't provide any written address......
Yes.
To tell them that you're electing to be tax resident so that you can get the letter of tax residence that you previously said that you needed.
CharlieOscar
Registered User
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Why is there no Revenue App available like HMRC in the UK?
@WizardDr Thank you for seeking and obtaining a response from Revenue. In another thread I said the following, which @James5 linked to in this thread :
In the meantime I have gone back through my files to see how I came to form this opinion. The explanation is as follows:
In the middle of the last decade, for a number of years I had rental income which required me to complete a Form 11. This was actually completed and submitted by my accountant on my behalf. During that period I had deposit interest (well below the €5,000 threshold) which was declared on the Form 11. When I received the draft Form 11 from my accountant for approval prior to submission I queried the sum due to revenue, as it varied by a small amount from the liability I had calculated based on my rental income. His explanation was that the PRSI due on the deposit income was the cause of the discrepancy. On further querying it with him, he described it as an anomaly, and said that DIRT at the prevailing is treated by Revenue as full and final settlement (with no PRSI charged) where it is charged by the bank or financial institution and where a Form 11 is not otherwise required. However, where a Form 11 is completed, for whatever reason, the deposit interest becomes liable for PRSI.
As is often the case with anomalies it does appear unfair, however it would be impractical for Revenue (and the banks and financial institutions that operate DIRT collection on their behalf) to collect PRSI, unless it were rolled into the basic DIRT rate and applied across the board subject to the same rules as DIRT generally. This would then penalise those under 18 and those over 66 who are liable to DIRT, replacing one anomaly with another.
The position in relation to Form 12 is a lot less clear. Certainly, deposit interest does have to be declared on Form 12 if that is being completed for any reason. Whether or not a Form 12 is required to be completed because of deposit income alone is the question. It appears to me that those who complete the form and declare depots interest will pay the PRSI "penalty", whereas those who don't bother are unlikely to be detected or pursued.
In the meantime I have gone back through my files to see how I came to form this opinion. The explanation is as follows:
In the middle of the last decade, for a number of years I had rental income which required me to complete a Form 11. This was actually completed and submitted by my accountant on my behalf. During that period I had deposit interest (well below the €5,000 threshold) which was declared on the Form 11. When I received the draft Form 11 from my accountant for approval prior to submission I queried the sum due to revenue, as it varied by a small amount from the liability I had calculated based on my rental income. His explanation was that the PRSI due on the deposit income was the cause of the discrepancy. On further querying it with him, he described it as an anomaly, and said that DIRT at the prevailing is treated by Revenue as full and final settlement (with no PRSI charged) where it is charged by the bank or financial institution and where a Form 11 is not otherwise required. However, where a Form 11 is completed, for whatever reason, the deposit interest becomes liable for PRSI.
As is often the case with anomalies it does appear unfair, however it would be impractical for Revenue (and the banks and financial institutions that operate DIRT collection on their behalf) to collect PRSI, unless it were rolled into the basic DIRT rate and applied across the board subject to the same rules as DIRT generally. This would then penalise those under 18 and those over 66 who are liable to DIRT, replacing one anomaly with another.
The position in relation to Form 12 is a lot less clear. Certainly, deposit interest does have to be declared on Form 12 if that is being completed for any reason. Whether or not a Form 12 is required to be completed because of deposit income alone is the question. It appears to me that those who complete the form and declare depots interest will pay the PRSI "penalty", whereas those who don't bother are unlikely to be detected or pursued.
BrokeBroker
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- 241
Yes.
To tell them that you're electing to be tax resident so that you can get the letter of tax residence that you previously said that you needed.
Okay, cheers, but just to be clear, does this writing have to be by post, or can it be via the inquiries section?
i.e. is it typically or compulsorily done by post?
Highlighting it was the Collector General Division does now make the process more do-able.
BrokeBroker
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If I didn't declare myself as a tax resident - is it then possible to still file a DIRT tax return? (via form 11, or however you guys describe it).
Or if I attempted to do they, would revenue contact me in request to file for tax residency, before the DIRT tax return can be processed?
DIRT is taken off my Irish savings accounts so, it wouldn't appear so?
.....
I'm just thinking, based on my student status, would it be simpler for all concerned to NOT apply for tax residency yet, and just avoid accounts that require the associated letter for the double tax agreement?
I'm beginning to feel like that other poster that felt this DTA is really potentially more hassle than it may be worth?
Or if I attempted to do they, would revenue contact me in request to file for tax residency, before the DIRT tax return can be processed?
DIRT is taken off my Irish savings accounts so, it wouldn't appear so?
.....
I'm just thinking, based on my student status, would it be simpler for all concerned to NOT apply for tax residency yet, and just avoid accounts that require the associated letter for the double tax agreement?
I'm beginning to feel like that other poster that felt this DTA is really potentially more hassle than it may be worth?
imalwayshappy
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On this topic, reading the correspondence from Raisin in regards to withholding tax by going through the motions (letter of residence etc) they will reduce the rate from 28% to 15%. I am still confused as if DIRT is 33% by doing nothing am I not just giving 28% to the Portuguese Revenue and 5% to Ireland via my annual tax return?
BrokeBroker
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Clarity on this continues to be elusive.
I was just in touch with the PAYE revenue department who didn't have an answer to this to hand themselves.
In theory if revenue deduct the prsi on foot of a form 11 there is nothing stopping someone from applying for a rebate from social welfare if under the €5K limit.
The 5000 euro limit relates to class S Prsi. In the majority of cases class K is applied to bank interest.