Tax on Sale of Shares, and Dividend Income - Companies Outside of Ireland (not ETFs)

tax_moron

tax_moron

Registered User
Messages
53
This is not in relation to ETFs. As I understand it, profit from selling of shares, and dividend income from ETFs is taxed at 41%. I'm looking into tax advantages (if any) from moving away from ETFs and into manually trading individual companies.

I'm trying to find information on the tax I am due to pay on:

  1. The profit from selling of shares (not on the Irish exchange - specifically on Amsterdam, and US exchanges)
  2. Tax on dividends received as a PAYE worker (so not corporation tax - which is all I can find on Revenue's site), from companies outside of Ireland

Revenue states: "The rate of CGT is 33% for most gains", and it also states: "40% for gains from foreign life policies and foreign investment products", so does this mean shares in companies listed on foreign exchanges are taxed at 40%, it's not entirely clear to me?

Additionally, how much tax do I pay on dividends from companies in the Netherlands, or the USA; I can't find anything on this? Are these covered under CGT too or do they incur additional taxes?

Would it be best to just go to an accountant, or contact Revenue directly? I feel like this is something that should be possible to do myself without an accountant - but I can't find the information on Revenue.

Sorry, these are probably noobish questions, but there doesn't seem to be much information out there specific to this (well this dumbass can't find it anyway). If anyone can point me in the right direction, that'd be great!

Thanks in advance!
 
Assuming you are resident in Ireland you will be liable to income tax on any dividend income from shares held worldwide and to CGT on any captial gains you make when you sell your shares.

You will have to file returns with Revenue annually detailing your gross dividend income and capital gains. Tax is due at the same time.

Normally, the broker who is managing your account will deduct Dividend Withholding Tax from any dividend income you receive before crediting it to your account. This deduction may give rise to a tax credit against your Irish tax liability depending on the share, the country where the broker account is held.

You may be able to reclaim some of this Dividend Withholding Tax from the tax authorities in the foreign country depending on the double taxation treaty between the foreign country and Ireland

This is not an easy subject to master and is also a moving target as different countries adapt and change their tax laws.
 
There is a place in your tax return for foreign dividends, so you declare them there.
 
Thanks for the replies people :)

So profit from the sale of shares, it's safe to just divert 33% of the profits for CGT (minus the yearly exemption of €1,270), right? Which needs to be paid within the calendar year, and filed for by the next financial year?

And dividend income falls under income tax. So I'll try do an example to help better understand it:

I'm not married, and lets say earn €55k gross /year, and lets just say €3k in dividends. So my employer does all my normal tax stuff, so I just sort the €3k out, right?

Higher rate €3,000 @ 40% due to being in the higher tax bracket = €1,200
USC €3,000 @ 4.5% on €3k = €135
PRSI €3,000 @ 4% on €3k = €120

Bringing total tax due to: €1,455 (net income is thus €1,545)

This post will be deleted if not edited immediately they really shaft you don't they? This doesn't feel right though. It seems as though you are taxed on income you don't see. Like if you are taking away USC and PRSI on income that is already taxed by the income tax, this just feels wrong. Perhaps I'm going off here.

Is the above calculation correct, or do you calculate the USC, & PRSI on the remainder after the income tax is taken out like so:

Higher rate: 3,000 - 40% = €1,800 remaining
USC: 1,800 - 4.5% = €1,719 remaining
PRSI: 1,719 - 4% = €1,650.24 net income left over (total tax paid: €1,349.76)

Appreciate any further guidance!
 
When you file your return, it will do the calculation for you

the first calculation is correct bar correction for Dividend Withholding Tax - this will depend on where your brokerage account is held
PRSI and USC is on the gross income. Your marginal rate is 48.5% in total
 
Thanks @jpd!

I am an Irish citizen, living in Ireland, an using Degiro, just to be clear. Thanks again!

I have one other question in relation to selling of shares at a profit. Taxes are due on a per trade basis right?

E.g. I can't buy €10,000 worth of shares, sell for €15,000 and then buy €15,000 and sell for €20,000 and accumulate the gain for the year? Just want to confirm that I need to pay 33% on the €5,000 profit first, right? And the same for subsequent gains, (less the yearly €1,270 of course).
 
You calculate your gain, or loss, on each disposal - a disposal can be a sale or a gift to someone
 
If you are a PAYE employee as opposed to self-employed so Class A for tax then I read that you owe no PRSI uness your investment income is over 5k annually and the 4% kicks in over 5k.
 
You must log in or register to reply here.
Back
Top