ETF Dividend Tax on Form 11

R

richiculous

New Member
Messages
4
Hey folks, I have a question about submitting the Form 11 online and including the amount received by me from ETF dividends. It's my first time to complete a Form 11 (cannot complete normal Form 12 as living abroad now) here's some more info about my situation:
  • I've been living abroad since March 2022, therefore I was ordinarily resident for 2023
  • I received dividends from 2 ETFs in 2023 (Vanguard FTSE All-World UCITS ETF USD and Vanguard S&P 500 UCITS ETF USD)
  • I attempted to complete tax return and declare dividends in Form 12 online but I couldn't do that as I'm living abroad now and Revenue advised me to complete a Form 11
My understanding from reading the revenue residency guidelines is that investment income less than €3,810 is not taxable for people who have left Ireland and are ordinarily resident.


My next point to mention is that I attempted to declare my total received dividends (much less than €3,810) amount under 'Offshore Funds' in the Form 11 as it specifically mentions the 41% tax rate (referred to a guide which mentions that). When I proceed to the Calculate section, the form doesn't seem to consider what I mentioned above about tax not being payable if you are ordinarily resident and the income was less than €3,810, so therefore it gives me a tax payable amount of 41%.

I suppose my question is this: Am I misunderstanding the revenue guidance and tax on dividend income from ETFs is payable at 41% for ordinary residents? Or, am I using the form an incorrect way? Appreciate any thoughts on this.

Thanks
 
richiculous said:
I attempted to complete tax return and declare dividends in Form 12 online but I couldn't do that as I'm living abroad now and Revenue advised me to complete a Form 11
Click to expand...

I'd double check this. If income less than €3,810 is exempt from Irish taxation, then are you obliged to file a return at all?

If you are non-resident, it is worth looking at the Double Tax Treaty (if any) between your country of residence and Ireland. I suspect that the income received from the above funds would most likely come under the Article 'Income not expressly mentioned' in the Model Treaty and so according to that Article, the income is taxable only in your country of residence. If so, a Form 11 shouldn't be required.
 
Thanks for your reply. I'm not sure, my understanding was that filing was still necessary for completeness I suppose but you might be right if the amount is less than €3,810, maybe it's not needed. I sent an enquiry to Revenue over the weekend so I will see what they reply with.

The country is the Netherlands. There is a Double Taxation Treaty but honestly, I was a bit out of my depth when looking through it before.
 

Hi @AAAContributor I still haven't received an answer from Revenue but I did a bit more digging into the double taxation treaty.

There is Article 10 'Dividends' but I'm not sure that it applies to ETFs:

1. Dividends paid by a company which is a resident of a Contracting State to a resident of the other Contracting State may be taxed in that other State.
Click to expand...

What I can see in Article 20 'Other income' is the following:

1. Items of income of a resident of a Contracting State, wherever arising, not dealt with in the foregoing Articles of this Convention shall be taxable only in that State.
Click to expand...

As far as I can tell, this aligns with what you said above about certain income only being taxable in the country of residence.
 
I am in a similar non resident position . I am invested in ETF's in the UK and the income each year is below Euro 3810 . I know that every 8 years revenue will look to charge you 41% tax on the interest earned . What I want to know is does the allowance of 3810 carry forward each year as the interest would then be greater .
 
John Walsh said:
I know that every 8 years revenue will look to charge you 41% tax on the interest earned .
Click to expand...
Not quite. They'll expect you to pay 41% on any growth in value of the ETF since purchase or the last 8 year deemed disposal anniversary.
John Walsh said:
What I want to know is does the allowance of 3810 carry forward each year as the interest would then be greater
Click to expand...
Dividends are assessable for income tax (and possibly PRSI/USC) which is a separate tax from the 41% deemed disposal/encashment tax and these don't overlap at all.
 
ClubMan said:
Dividends are assessable for income tax (and possibly PRSI/USC) which is a separate tax from the 41% deemed disposal/encashment tax and these don't overlap at all.
Click to expand...
Dividends from UCITS ETFs are subject to the same 41% tax as on the growth.

They are not subject to marginal rate income tax, USC or PRSI.
 
You must log in or register to reply here.
Menu
Log in
Register