Relates to companies, rather than private individuals. If a company receives dividends from another company, there is no corporation tax where the relevant criteria is met.What is meant by dividends are exempt from Corporation Tax.
Are you getting confused by the rules around an Irish Company receiving dividends from a foreign subsidiary, rather than a private individual receiving 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 didn't suffer before.
I don't think so?. There was a time when 95% of Irish companies paid 50% corporation tax and at the same time, 100% of foreign companies ( IDA companies ) paid zero corporation tax. I am not an accountant. My belief is that when corporation tax was 50% you would get credit for that tax on your personal tax on dividends. When they reduced the corporation tax to 12.5% they removed the credit. They said since owners benefit from the reduction in Corp. tax the credit will be abolished from the 6/4/1999.Are you getting confused by the rules around an Irish Company receiving dividends from a foreign subsidiary, rather than a private individual receiving dividends?
Ah, there used to be a concept both here and in the UK called "Advance corporation tax" up to 1999 in Ireland - I think it was reduced in the years prior?My belief is that when corporation tax was 50% you would get credit for that tax on your personal tax on dividends.
Were they referred to as Franked and UnFranked dividends or something like that. My taxation exam was passed in 1988 and I remember it but still can't remember how its treatment was a benefit to individuals and or companies escapes me.Ah, there used to be a concept both here and in the UK called "Advance corporation tax" up to 1999 in Ireland - I think it was reduced in the years prior?
It only applied to companies that paid dividends and was separate to 'normal' corporation tax. The shareholders then received a credit in relation to the ACT only, not the full corporation tax.
I'm too young to remember all the details.
Thank ,yuu.Were they referred to as Franked and UnFranked dividends or something like that. My taxation exam was passed in 1988 and I remember it but still can't remember how its treatment was a benefit to individuals and or companies escapes me.
But that's all gone now. And dividends no matter where they occur or held are taxable here at the marginal rate if one is paying that and is subject to PRSI/USC.
And tax deducted by say the US at 15% with a valid W-Ben 8 , 30% without is given by way of a tax credit and Revenue calculates that, well they do on our return.
Well our account doesn't have any costs associated, and I would not know how to account for those costs from a tax deduction on income. We do incur costs on conversations to Euro and do deduct them but that's generally for net shares held in the US.Thank ,yuu.
if you have an account with a US firm they send you a 1042-S form at the end of the year and they show the dividends paid and also the withholding tax deducted. You can deduct from the dividends the costs incurred within the account in connection with the shares such as any interest paid on funds to purchase or there may be fees etc.
Do you mind sharing your source for that?If you borrow money to purchase shares and you pay interest on the borrowed money and if you receive dividends on the shares purchased with the borrowed money you can treat the interest as a cost and you can deduct it from dividends receive or alternatively you can include it as a cost to the initial purchase of the shares and when and if you sell the shares the cost of the shares will be the initial price paid plus the interest of the funds to purchase the shares. It is the same if you buy land. You can deduct any interest from rental income received or when you sell the interest can form part of the costs.
Income is (dividends less interest). Tax due to be paid is tax on income less withholding tax already paid.
If you borrow money to purchase shares and you pay interest on the borrowed money and if you receive dividends on the shares purchased with the borrowed money you can treat the interest as a cost
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