DWT and income tax

[paulh13]

Hi

I have a question on Dividend Withholding tax and income tax. The revenue leaflet on DWT has a statement that DWT can be offset against income tax (I assume non paye income):
"If you are resident in Ireland and are liable to income tax, you may claim to have the DWT set off against your liability and, if the DWT exceeds that liability, to have the excess refunded."


Does that mean if has an income tax liability from something like a rental property, but also paid DWT, that the DWT paid can be subtracted from the liability.

any help appreciated

thanks

 

[dublin66]

A dividend is liable to income tax so in the first instance the DWT would be deducted from the income tax payable on the dividend. DWT is 20% and marginal rate is 41% so additional tax payable for higher rate taxpayer.

DWT may be creditable against other tax on other income where it exceeds the tax on the dividend - this would happen where income is at the exempt level or where there are losses etc.

 

[paulh13]

Hi

thanks for your reply. I understand the first part where the DWT is taken in to account in the income tax calculation so you pay 41-20% .

I'm still not sure on the second aspect, where DWT may be creditable against other tax on other income. Can you provide any more details, or a pointer to some further information online.
I know you cant write DWT off against PAYE but can you against other income tax

thanks again

 

[Joe_90]

An example might help

Employment income 20,000
Dividend income 1,000
Rent 1,000

Taxable income 22,000
Tax 22,000 x 20% 4,400
Less tax Crs. 3,300
1,100

Less tax already paid
PAYE 700
DWT. 200

Balance due 200

If you had no employment income then you would get the €200 DWT back or could offset it against the rental income liability if you had some employment income.