Dividend withholding tax

An ROI-resident company must deduct dividend withholding tax (DWT) at the standard rate from dividend payments and other profit distributions (s 172B).

DWT need not be deducted from distributions made to:

(a) an Irish resident company, a pension scheme, an employee share ownership trust, a collective investment undertaking, or a charity (s 172C),

(b) a person resident in a tax treaty country, an EU resident, or a quoted company (s 172D),

(c) a qualifying intermediary, provided the ultimate beneficiary is non-liable (s 172E).

DWT may be credited against the recipient’s tax liability for the tax year in which the dividend is received (s 172J).

Annual payments

An annual payment (for example, a covenanted payment) is a payment that is pure income profit in the hands of the recipient. Where an annual payment is made:

(a) out of taxed income, the payer is chargeable to tax on the payment and is entitled to deduct tax at the standard rate (s 237),

(b) out of income not charged to tax, the recipient is chargeable and the payer must deduct tax at the standard rate from the payment (s 238).

Deposit interest retention tax

Financial institutions must deduct deposit interest retention tax (DIRT) at the following percentage rates from interest payable on deposits:

(a) 33% from interest that is payable annually or more frequently, and

(b) 36% from interest payable less frequently than annually (s 256).

DIRT deducted from general deposit account interest satisfies income tax liability but must be included in the recipient’s return of income (s 261).

DIRT does not apply to accounts held by pension funds (s 265) and charities (s 266), provided they have completed the appropriate declaration.

A person aged 65 or over, with income below €18,000 (individual) or €36,000 (married couple) may obtain a refund of DIRT (s 267).

Professional services withholding tax

An accountable person (a government department or State-funded body) must deduct professional services withholding tax (PSWT) at the standard rate from payments made for professional services (s 520) of:

(a) doctors, dentists, pharmacists, opticians and veterinary surgeons,

(b) architects, engineers, and quantity surveyors,

(c) accountants, auditors, and financial, economic, marketing, or business consultants,

(d) solicitors, barristers and other legal agents,

(e) geologists,

(f) providers of training services on behalf of FÁS.

Relevant contracts tax

A main contractor must deduct relevant contracts withholding tax (RCWT) at 35% from payments made to unauthorised subcontractor who has been engaged to carry out a relevant contract, i.e., construction operations, forestry operations, or meat processing operations on behalf of the main contractor (s 530, 531).

Penalties

A person who fails to file a return or provide information on request, is liable to a penalty of €3,000 (s 1052). Where a return is filed negligently, the penalty is €325 plus the difference between the correct liability and the tax paid (s 1053). Where a return is filed fraudulently, the penalty is €125 plus twice the difference between the correct liability and the tax paid.

Revenue may not seek a civil penalty wishes unless a court has determined that the penalty is due. Revenue may enforce collection of a penalty confirmed by a court, as if it were tax. Revenue may not recover penalties from the estate of a deceased person unless that person agreed, or a court confirms that the penalties are due. Revenue practice in relation to tax-geared penalties is given effect in the legislation.

Introduction to Income Tax

Income Tax rates

Benefit in Kind

Income Tax exemptions

Income Tax schedules

Income Tax reliefs

> Capital Allowances

Handling losses

> Double taxation

Self Assessment

Revenue Powers

Penalties

Appeals