Tax on US shares

T

tukey

Guest
Hi. First time poster, long time reader. This may be better placed on the taxation forum but here goes....

Can anyone please clarify the tax situation on US shares? I am considering investing in some US blue chips and I am unsure of how the dividends are taxed here in ireland.

I looked at the double taxation agreement betwen the US and Ireland. The US has a withholding tax of 15% once a W8-BEN form is completed.

Is there a tax credit for this amount in Ireland? Or are you effectively paying 41% + 6% PRSI + 15% withholding tax = 62% on US dividend income?

Is it worth it?
 
You get credit for foreign tax deducted, so in effect you pay only the difference to the Revenue.

Capital gains are taxed at 20%, by the way, not 41%.

Worth it? Currency fluctuations are a big part of it, and can wipe out or alternatively enhance any gain. At the moment the dollar is cheap but that won't always be the case I assume.
 
Thanks for your response, extopia.

Can you point me to where is says that on the revenue site?

Also I understand CGT is applied at 20% on income from the sale of shares, but surely tax on dividend income applies at your marginal rate?

From your response, there seems to be no difference from a taxation point of view on buying US or UK/Irish shares (bar the 1% stamp duty or Irish shares).
 
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