FORM-11 USA Dividends

[skjom24]

Hi

I have a scheme as an employee of US multinational where stock is held for 3 years.
The trustee of the scheme sent me a letter where they have payed dividends for the tax in 2023.

as an example:
Gross Dividend (150.74) , US Tax(45.22), Irish Tax 25% (26.38).

Given they have already payed the Irish tax , do i need to declare this in the Form 11, i tried to put it into the Form 11, where i entered the gross amount received , then i put in the Irish tax deduced in the "Irish Tax Deducted On Encashment" section.

However i noticed by calculation increased by pretty much the same amount as what the trustee had payed in Irish tax. I.e The trustee payed 117 euro in tax and when i enter this in the form 11 my liability increased to 118 euro.

Thanks

 

[jpd]

The US tax should be limited to 15% so only 21.61, the Irish withholding tax rate is 25%

 

[S class]

You need to submit a W8-BEN form to reduce the US tax from 30% to 15%.

 

[skjom24]

I have done that , and as mentioned above the trustee has payed the Irish tax of 25% also , giving me a check for the net amount.

What I was asking was should this be declared in the form 11?

USA Dividends have 30% tax which the W8-BEN reduces to 15%. Irish tax is also due at 25% on the (gross dividend - usa tax taken)

However what about PRSI and USC ? Is that not also not due at 12% if on higher tax band.

I entered the gross amount received from the dividend on the form 11, then i put in the Irish tax deducted(already payed by the trustee) in the "Irish Tax Deducted On Encashment" section.

However what I noticed was I get an additional bill , so it's effectively telling me even though the trustee has payed the Irish tax of 25% , there is more tax due. The only thing I can imagine is that this is USC and PRSI.
If I omit the line item on the encashment section the bill is higher.

It seems a hell of a lot of tax though , I get about 347 euro in net from the trustee after the USA 15% is taken plus after they have payed the 25% Irish tax. But now when I fill in my form 11 I get stung with another 117 euro liable owed.

 

[jpd]

You said earlier 150.74 and now you say347 net - that makes it difficult to understand and explain

If you get 100 USD in gross dividends, the US are entitled to $15 in tax.

The balance of $85 is paid to you less the Withholding tax - this is not a tax but a prepayment of tax

The actual income tax due will depend on your marginal rate. Assuming it's 40% then the income tax due is $40. You will get a credit for the US tax of $15. So you owe $25.
You have had withholding tax deducted, so only the difference, if any, is due

PRSI and USC will be due

 

[skjom24]

Thanks- so on the form 11 , do I list the gross dividend and the encashment as I've done .

The encashment being what the trustee has already payed (the 25%)

 

[jpd]

Yes, for US dividends you list the gross and the Irish Withholding tax

 

[jpd]

You can reclaim the excess tax deducted by the US

 

[skjom24]

	B	C	D	E	F
	EUR	EUR	EUR	EUR	EUR
	Gross Dividend	US TAX 15 %	Gross Minus US TAX	Irish Tax (25%)	PRSI & USC (12%)
			B-C	25% of Column D	12% of Column D
	158.64	23.8	134.84	33.71	16.1808
	273.98	41.1	232.88	58.22	27.9456
	284.09	42.61	241.48	60.37	28.9776
	271.15	40.67	230.48	57.62	27.6576
Total	987.86	148.18	839.68	209.92	100.7616
			Payed by Trustee		209.92
			Liability to Revenue		100.7616

Does this make sense , this was from my 2023 as an example

 

[jpd]

Your Irish Income Tax calculation is

A	B	C	D	E	F
Gross Dividend​	Income Tax @ 40%​	Credit for US tax 15%​	Credit for Witholding tax 25%​	Income tax due =B-C-D​	PRSI & USC 12%​
158.64​	63.46​	23.80​	33.71​	5.95​	16.18​

 

[skjom24]

Your Irish Income Tax calculation is

A	B	C	D	E	F
Gross Dividend​	Income Tax @ 40%​	Credit for US tax 15%​	Credit for Witholding tax 25%​	Income tax due =B-C-D​	PRSI & USC 12%​
158.64​	63.46​	23.80​	33.71​	5.95​	16.18​

Thanks, i think the column F is incorrect though, shouldn't it be 12% of the gross dividend. = 19.04 in this instance.