A two stage process to increase tax compliance on DWT

Brendan Burgess

Increase rate of Dividend Withholding Tax from 20% to
25% from 1 January 2020
As the first step in a two-stage process, the rate of Dividend
Withholding Tax (DWT) will be increased from 20% to 25% from 1
January 2020. This will better align the amount of tax remitted by
companies with the income tax and USC that is ultimately payable
by the individual taxpayer. The 25% rate is considered to be a
reasonable combination of the standard 20% rate of income tax and
the most common rate of USC which is the 4.5% that applies to
income between €19,874 and €70,044. In the event that the 25%
rate results in an overpayment of tax, the relevant amounts will be
refunded, as is the normal procedure. It is important to highlight that
this measure does not alter the underlying liability to tax for Irish tax

The second step is to introduce a modified Dividend Withholding tax
regime from 1 January 2021. Utilising real-time data collected under
the newly modernised PAYE system, it is intended that Revenue will
apply a personalised rate of DWT to each individual taxpayer based
on the rate of tax that they pay on their PAYE income. Revenue will
shortly be launching a consultation in order to engage with
stakeholders on how the proposed new system will operate.
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joe sod

Frequent Poster
Just wondering does this change in dwt only apply to Irish shares and shares held in Irish nominee accounts?
What happens if you have shares held in UK or us nominee accounts?, currently the UK accounts only withhold tax on Irish shares to Irish government, what happens if you have for example a French adr held in a US nominee account?, presumably it will be still based on self declaration.