Withholding tax on BGP investment - How does the double taxation treaty with Portugal work?

Can anyone help me with this query please?

1. My investment with BGP (Raisin) matured. As I wasn’t asked by BGP to supply a certificate of tax residency or the 21-RF1 form. I’m wondering if the interest I see in my Raisin account is less the 28% Portuguese withholding tax? If so, how do I get the interest back as I am liable for 33% WHT on the same investment to Revenue Ireland?

2. Had I returned the 21-RF1 and certificate of residency, would BGP have deducted the Irish WHT of 33% at source?

3. Some countries have no WHT imposed on an investment. In this instance, do I simply declare the interest earned in my income tax return to Revenue

Raisin and BPG due state that a 21-RFI form and certificate of tax residence is required though. It´s in the details of the product and on the product information sheet. Specifically it says:

As a private investor, you are subject to taxation of your interest income in your country of tax residence. The interest income must be stated in your tax return. All required documents should be provided on time. In Portugal, a withholding tax of 28% is withheld if you do not provide the tax form "21-RFI". The tax form is a standard form that Raisin will provide you with after opening an account, in the electronic mailbox of your online banking. Please submit the respective documents to your tax office 12 months (not earlier!) before the due date. (Reason: the Portuguese tax authorities only accept tax documents issued or signed no more than 12 months before the due date) At the latest 4 weeks before interest payment (i.e. before maturity) you send the completed and signed form in the original by post to Raisin - we will then forward it to the bank free of charge for you.

In this case, the withholding tax for Irish clients is 15% but is fully creditable on a tax return unless it is refundable abroad. The interest payment and withholding tax are paid once at the end of the term. If you have several term deposits with the partner bank, you must submit the documents several times - separately for each term deposit you have taken out and a maximum of 12 months before the respective due date. You cannot submit an exemption order for investments abroad. You are required to include foreign interest income in the tax return. Additional tax information can be found on our website: raisin.ie/tax Please note that the specific tax treatment depends on your personal circumstances and that there may also be future changes in the tax treatment. For individual clarification of tax issues, please consult your tax adviser.

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If you had provided the form, you would have had BPG/Portugal only withdraw 15%.

I personally would report any earned interest on my taxes as this is earned funds you personally got, regardless of whether the country had withholding tax or not.

It would be worth talking to Revenue to declare that you have already paid 28% to Portugal to offset that against the 33% DIRT Tax

@bigcity22 - thanks for your post. I did look at the T&Cs related to investment. I don’t
recall BGP requesting or sending me any forms. I’m pretty carefully about such things to avoid the rigmarole of getting the WHT back from Portugal. Enlisting Revenues’s help on the matter is probably the only thing I can do now. Hopefully this will mean I only pay what’s due.

You can't offset the 28% against the DIRT 33%

You can only offset 15%

The other 13% has to be reclaimed from the Portuguese tax authorities

If you don't reclaim, you will end up paying 46% - Irish tax at 33-15=18 + Portuguese at 28

@jpd - thanks for that. Any idea how I go about reclaiming it from the Portuguese Revenue?

No, but I imagine their tax authority has a website with the relevant forms

Is it worth all the effort for 13% of whatever interest you got?