Raisin Bank and withholding tax

S

stuffit_ire

Registered User
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Can someone please explain what effect withholding tax has on the interest I would receive from Raisin.

e.g. A one year fixed term deposit via Raisin with BluOr Bank is has an interest rate of 3.21%.
However there is a witholding tax for Latvia.


Effective rate 3.21% AER
Nominal rate 3.21% AER

Deposit guarantee up to 100.000 EUR
Currency EUR
Min/Max investment amount 1 – 100,000 EUR
Costs None
Prolongation A prolongation will be initiated automatically unless you deactivate it in online banking.

Withholding tax
In Latvia, a withholding tax of 20 % will be levied on interest payments from 1 January 2018, although this can be reduced. In order for the withholding tax to be reduced to 10%, the Bank must receive a certificate of residence no later than four weeks before the due date. This is then fully creditable against the capital gains tax in Germany.


What percentage will I actually receive when the year is up?
 
If you submit your certificate of residence, you will pay 10% tax. i.e. you will get 90% of the 3.21% gross interest.

The 10% tax can be deducted against your deposit interest tax liability when filling your return. i.e. you will likely pay 33-10=22% to the Revenue.
 
Lightning said:
If you submit your certificate of residence, you will pay 10% tax. i.e. you will get 90% of the 3.21% gross interest.

The 10% tax can be deducted against your deposit interest tax liability when filling your return. i.e. you will likely pay 33-10=22% to the Revenue.
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What's the point of doing paperwork for reducing the tax you pay to a third country when you have to pay the difference to revenue anyway? . As DIRT is 33% from my point of view this would only make sense if the tax in origin is greater than 33% so you will end up paying effectively 33% only...
I mean, if you feel very patriotic and want to pay more to revenue and less to Latvia in the previous case fair enough but the final tax paid will be the same in both cases
 
S class said:
You can normally only claim double taxation relief up to a maximum of 15%.
If you don't claim any tax relief from Latvia you will end up paying the 20% Latvian tax + 18% Irish Tax.
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At least in the case of Latvia, the 15% is in relation to dividends, whereas it's 10% from what I can tell for interest.

Even if the interest is higher on the Latvian bank, I preferred opting for a French bank on Raisin as there are no withholding taxes and the simplicity of that approach was appealing. I might reconsider it now though as I've taken the time to look up the agreement with Latvia!
 
Can you apply for a letter of tax residence in advance?

I need this letter for the year 2023 but my account matures on 30.1.24 and since it takes ages to receive the letter from revenue, I'd need to apply in October'23 so that is sent on time to the bank via Raisin.
 
It might not take ages.
I sent the letter to Revenue on 20/04/2023 and got it returned stamped on 25/04.
The form is valid for 5 years from signature date, so you can request it now.
 
I can't see where to pay/report DIRT on revenue myaccount - there is supposed to be an online form 12. if you select declare income, there is nothing there in other incomes. I normally file a form 11, but am under threshold this year, so will be form 12 this year - maybe I can't see form 12 because they expect me to file a form 11 and I have to tick something somewhere ?
 
Hi Rasputin, if you didn't deregister for Form 11 then that's the return Revenue do expect to get from you.
 
Thanks will look into that, tax agent said they had informed them, but possible they didn't
 
Gervan said:
It might not take ages.
I sent the letter to Revenue on 20/04/2023 and got it returned stamped on 25/04.
The form is valid for 5 years from signature date, so you can request it now.
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How did you request a letter of Tax Residence from Revenue? Is it just a simple letter or do you need to accompany it with a Form that you needed to fill in. I wonder could you request it through My Account or ROS on the revenue website?
 
backofnet said:
How did you request a letter of Tax Residence from Revenue?
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I downloaded the form, mostly pre-filled, from my Raisin online account. Signed and filled in a date or two, posted it freepost to the address Raisin told me.
 
I filled out the tax docs for my 2 BluOr accounts, unfortunately I messed up 1 of the forms by the time it got to Germany so have to do the whole process from scratch.

Can anyone help with these?
1. Once BluOr tax the 10÷ on both accounts at the end of the term how much do I owe Irish revenue? Is it 23÷? This is confy me.

2. Both my BluOr deposit accounts are showing a 2.80÷ interest rate on the Dashboard. When I signed up for both deposit accounts the rate was higher (3.06÷ I believe). Is it normal for the interest rate on a deposit account to drop after the deposit account is open? I've opened a ticket on this but has anyone seen this?

I think once my deposits are up I'll not be signing up for Raisan again, too much hassle with the paperwork.
 
I think it's the end bank more so then raisn.

Opened younited account. No paperwork and no withholding tax. Very straight forward open two

Then open BFF account on May was all electronic bar withholding tax exempt form print off and sign scan it and send it back. (their used to paper based and post to Germany from reading on here) took only 3 days to open.
 
No issues, just opened an account this week. Does the bank guarantee limit apply to Raisin or the bank the money is lodged in or both?
 
Lightning said:
If you submit your certificate of residence, you will pay 10% tax. i.e. you will get 90% of the 3.21% gross interest.

The 10% tax can be deducted against your deposit interest tax liability when filling your return. i.e. you will likely pay 33-10=22% to the Revenue.
Click to expand...
Is 33-10 not 23?

Raisin support not able to tell me exactly what I owe you Irish revenue after submitting the forms for BluOr bank to bring tax from 20÷ to 10÷

Will I owe Irish revenue 23÷?

=====
Unfortunately, we are unable to provide tax advice. Should you need more
information on this, please check with a tax advisor.

Alternatively, in terms of DIRT tax, please refer to the following link at
your convenience for the most up to date information:

[1]https://www.revenue.ie/

Should you have any questions, please do not hesitate to contact us.
=====
 
Axelrose said:
Raisin support not able to tell me exactly what I owe you Irish revenue
...
=====
Unfortunately, we are unable to provide tax advice. Should you need more
information on this, please check with a tax advisor.
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This is standard practice.
No such company is going to leave themselves open to liability by giving tax advice to individuals.

Aren't the general issues with DIRT on such accounts (including foreign witholding taxes, double taxation agreements, DIRT credits for foreign witholding taxes etc.) dealt with here?

Withholding tax in Ireland - information 2024 | Raisin Bank

All about the withholding tax and country-specific documentation for each of the EU countries of our partner banks here!
www.raisin.ie www.raisin.ie
 
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