Form 12 and Dividends - Proof of dividends?

[qingdao]

Hi, I'm in the process of filling up form 12. When sending in the form is it necessary include copies, or originals, of the script dividends showing what DWT was held etc. Or is it just ok to fill in all the figures and wait for the revenue to come back if they want more info? thanks,

 

[Gondola]

No supporting documentation should be sent together with the form (as far as I know). Revenue asks that you keep your documentation for - I think - 6 years, so you will have it ready to submit to Revenue in case they want to see it.

 

[qingdao]

Hi again,

What happens with US dividends where some DWT has been taken (15%) from the US side. Will this be taken into account (double taxation agreements etc). If you're on the lower tax rate only 5% more tax is due? If you don't include documentation showing what tax was paid/not paid how will Revenue treat it?

 

[ClubMan]

As far as I know you can get a tax credit for any US dividend witholding tax under the Ireland/US double taxation agreement. If you have remitted a W-8BEN form to the US authorities (normally via your US broker) then I believe that the witholding tax is reduced to 0% so you just have to pay the Irish tax in full. From the W-8BEN form:

All Non US Persons are subject to US tax at a rate of 30% on income they receive from US sources, such as dividends on US
securities. If you reside in a country that has a double taxation treaty agreement with the US, you can avail of a reduced rate
of tax deducted, generally 15%. This US tax is also charged on sales of US securities for Non US Persons at a rate of 30%. For
a person residing in a country, that has a double taxation treaty agreement with the US, the rate of tax is reduced to 0%.
Ireland, the United Kingdom and most other EU countries are among the countries that have a double taxation treaty with the
US. (Full list available from www.irs.gov)
To avail of this reduced rate of tax, we must ask clients to complete a US tax form (W-8BEN), also known as a 'Certificate of
Foreign Status of Beneficial Owner for United States Tax Withholding'. The purpose of the form is to “certify” the country you
live in and to confirm you are not resident in the United States.

 

[Mark_Mc]

I think the line in red above would relate to this phrase "This US tax is also charged on sales of US securities for Non US Persons at a rate of 30%." and not the withholding tax on dividend income. If that is an exact quote then the sentence I have highlighted immiedately follows the withholding tax reference on sales not income.

As far as I know you can get a tax credit for any US dividend witholding tax under the Ireland/US double taxation agreement. If you have remitted a W-8BEN form to the US authorities (normally via your US broker) then I believe that the witholding tax is reduced to 0% so you just have to pay the Irish tax in full. From the W-8BEN form:

 

[strong1]

Hi

Just reading up on this form W-8BEN now, it states that it should be submitted prior to the receipt of income.

Does anyone know if there is a different form if you have already received dividends with DWT of 30% deducted.

Thanks

 

[extopia]

Don't know about Form 12, but when you fill out the electronic Form 11, you enter the gross amount of US dividends and automatically get a tax credit for 15% of that amount (It's called double taxation relief in the calculations).

 

[Nomansland]

Hi lads,
I have just gotten a statement in the door from my broker detailing the net dividend payable to me arising out of a share scheme I am in with my company. I have had US tax deducted at 15%. Does this mean that I have not filled out an up to date W8-ben? I know I have filled it out in the past. Does it need to be updated every year? Irish tax has been deducted @20%. However as I pay at the top rate, does this mean that I must pay the balance of tax up to 41% to the revenue.
A few more Q's.
Is there any way I can claim back the US tax?
What form do I need to fill out to settle with the revenue?
As a sepearate question. I sold company shares this year. There is not CGT payable on them as I made an overall loss. Do I need to do a return to the revenu on this. What form do I fill out if any?
Sorry for all the questions.

 

[ClubMan]

Hi lads,
I have just gotten a statement in the door from my broker detailing the net dividend payable to me arising out of a share scheme I am in with my company. I have had US tax deducted at 15%. Does this mean that I have not filled out an up to date W8-ben?

Sounds like it.

I know I have filled it out in the past. Does it need to be updated every year?

Not sure if it's every year but they definitely have to be renewed. In my experience your broker usually notifies you - e.g. Datek/Ameritrade in the past and E*Trade now in my case.

Irish tax has been deducted @20%. However as I pay at the top rate, does this mean that I must pay the balance of tax up to 41% to the revenue.

Yes - but I'm not sure where the 15% US witholding tax and (?) 20% Irish witholding tax comes into your situation?

Is there any way I can claim back the US tax?

Depends on the double taxation treaty - this may allow you to claim a credit against Irish liabilities in respect of the US witholding tax.

What form do I need to fill out to settle with the revenue?

Form 12 I presume?

As a sepearate question. I sold company shares this year. There is not CGT payable on them as I made an overall loss. Do I need to do a return to the revenu on this. What form do I fill out if any?

See the CGT section of www.revenue.ie - it explains how to make a CGT return. You should probably make one even if there is no CGT liability if only to record the relevant figures.

 

[Nomansland]

Thanks for the response Club man. I have one final question though.
At what point are you required to make a a tax return on shares that have been sold? I left the cash proceeds of one transaction (in USD's $$) deposited with one of the brokers (UBS). Other company shares I had are managed by Davy. I have also sold these, converted to euro's and left the cash on deposit in my Davy account. Do I need to complete a tax return on these transactions now??

Thanks in advance.

 

[ClubMan]

At what point are you required to make a a tax return on shares that have been sold?

See the CGT section of www.revenue.ie.