Brendan,
Dividends on US Shares
There is a 30% with-holding tax on US shares for non-US residents, but if you complete a W8-Ben form for your stockbroker, a lower 15% with-holding tax will apply. Your therefore receive 85% of the dividend. You are assessed on the full 100% and the 15% withheld by the US Revenue is deemed as tax already paid by you in accounting for tax due to the Irish Revenue, and for anyone on a marginal tax rate above 15%, then the balance is due to the Irish Revenue. The 15% US With-holding tax is non-refundable so pension accounts cannot reclaim it.
Brendan thank you.No, you declare the gross amount of US dividends - the Revenue then automatically give you a tax credit of 15% for US tax deducted.
Thank you.There is absolutely nothing to stop you claiming back any dividend Withholding tax (DWT) from countries that have withheld over and above the limit allowed. All it takes is your time and perseverance.
But if you want to pay some, or all or even more, of the overheld tax to Taxback and avoid the effort, by all means use Taxback.com
On my tax returns I included the dividend paid into our us account less charges made to the account as investment income.No, you declare the gross amount of US dividends - the Revenue then automatically give you a tax credit of 15% for US tax deducted.
Just to be clear with the withholding tax deducted by an Irish broker (if one is in involved); it is called Irish tax deducted on foreign dividends. You must input that amount shown on your annual dividend statement in order to benefit from a credit for that amount.It is not clear - where is the brokerage account held - US, Ireland, elsewhere?
Did you report the gross dividend - ie the dividend per share x the number of shares, ignoring any tax deducted by anyone? did the US deduct tax?
You are supposed to report the gross amount of tax - the Revenue will give you a credit of 15% for the tax deductible by the US
The tax deducted by the Irish broker, if any, will be a tax credit
On my tax returns I included the dividend paid into our us account less charges made to the account
instead of revenue giving a credit for the total tax paid they only allowed 20% on the investment income as a tax even though the actual ax was greater..
Thank you,Can you be more explicit as to what you mean by charges?
If your broker has charged you a corporate action processing fee or other such fees (ticket fee, back office fee etc) to process dividends, you cannot net these charges off the gross dividend in your tax return.
If you are buying shares on margin and are paying interest to your broker (or are paying interest to cover a settlement fail as you did not have enough funds in your account to settle a purchase), you cannot net the interest charged against any dividend income received on your long position(s) for tax purposes.
Has your account got an up to date W-8BEN on file?
The only thing I can think of here is that you have declared the dividend income as interest income. Interest payments (from a non-bank, such as a broker) to Irish residents have to be paid net of 20% withholding tax and if income is inserted in this section in the tax return, it will only generate a credit for 20%.
If you could provide more explicit detail as regards amounts, numbered section of the tax return and answers to some of the questions posted above by other posters you may be able to get more assistance.
Brendan thank you.
I reported as income, ( gross dividends paid into the account less the charges paid out of the account), I then reported the withholding tax as reported on a form 1042-S . The account is in the U. S.A.It is not clear - where is the brokerage account held - US, Ireland, elsewhere?
Did you report the gross dividend - ie the dividend per share x the number of shares, ignoring any tax deducted by anyone? did the US deduct tax?
You are supposed to report the gross amount of tax - the Revenue will give you a credit of 15% for the tax deductible by the US
The tax deducted by the Irish broker, if any, will be a tax credit
Thank you,
Nothing is paid directly to me personally. It is all within a trading account Dividends are paid into the account and charges are taken out . The rules of the account is that if the cost of purchases is greater than the funds provided the difference is charged at about 7% per year for the relevant period. I have no involvement in borrowing myself that it is just a charge on the account. Sometimes it is referred to as interest and sometimes as an investment charge. It might be an insurance policy, I don't know. The broker is in New York and, as far as I know, he provides a list of the charges to his other Irish Clients to set off against their dividends paid into their account.
I have no accountancy training or knowledge but my belief was that you are accessed for tax on all your income as if it was income in Ireland
and any tax paid abroad is deducted from the accessed tax and if you owe more tax than already paid abroad you pay the difference in Ireland but if you paid more abroad you don't get a refund. \i have completer the w-8Ben form.
In my tax returns,
I included the dividends paid into the account less the charges taken out of the account and I showed the Tax paid on the
Your foreign investment income , stated as income from securities on the notice of assessment , was input as €25,310 as per your returns. As you are entitled to double taxation relief on this income, relief is given by regrossing the foreign income ( net of foreign tax ) at the lower of the Irish effect rate and the effect rate of the relevant foreign country and bringing that regressed income into the final computation of liability to Irish tax. Credit is then given in respect of the regrossed foreign income at the lower effective rate . The expression effective rate means the rate at which have born or are liable to bear) tax on total income . Therefore , the amount stated on the assessment will differ from that declared on the return.
I reported as income, ( gross dividends paid into the account less the charges paid out of the account), I then reported the withholding tax as reported on a form 1042-S . The account is in the U. S.A.
I reported as income, ( gross dividends paid into the account less the charges paid out of the account)
Yes, revenue did query it and the person I was dealing with initially said I could charge the costs against the asset when the assets are sold. I explained that the assets might never be sold and surely it is only correct and proper to charge current costs against current income. I sent revenue copies of all the details. I explained that I personally am not directly involved. The conditions of the accounts are if the funds provided are less than the funds used there is a charge for the facility of about 7% to 8% per year on the difference. That is basically all I know. I don't borrow money and I don't even know if any money is borrowed, there might be some kind of facility or the charge might be the cost of an insurance policy to cover the risk.Why are you deducting the charges from your dividend income? What basis have you for doing so if Revenue queried it?
Weren't you previously told that you could not do this (post #31 in the following thread):
Tax on Dividends
Before corporation tax was reduced down to 12.5% taxing the profits of companies and again taxing the same money as dividends was regarded as double taxation. It appears therefore Irish companies paid less tax but Irish shareholders paid more in that they suffered double taxation which they...www.askaboutmoney.com
It looks like income is being under-declared from what you have outlined.
A call to a tax adviser to get it all regularised would be worthwhile.
Brendan,No, you can't offset the Corporation Tax paid.
But if the company has deducted tax on the payment of the dividend, then you may be able to claim it.
It differs from country to country.
So which country is the company in which paid the dividend?
Does the dividend certificate show tax withheld?
What company is it?
Brendan
This is most probably because you've incorrectly treated the expenses on your account as an offset against dividends.Brendan,
My understanding is if you have income in the U.S. and withholding tax is deducted at 15% in the U.S. that this is regarded by the Irish revenue as tax already paid. Apparently, this is not necessarily true. Below is a paragraph I received from revenue recently that I can not understand. Can you please explain what they mean. ?
“Although the amount of €9,115 of foreign tax was claimed, the credit for foreign tax deducted is not automatically the actual amount of foreign tax incurred. It is arrived at by multiplying to the amount of foreign income finally incurred in the computation of the liability by the lower effective rate. “
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