Taxation of interest received in a foreign bank account?

Anseo19

Registered User
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Dear All,
How do you treat taxation of interest received in a foreign bank account?

The tax on this interest has been paid in the foreign country. There is a double taxation agreement with Ireland. How do I treat this in my Irish returns?

Any insight welcomed greatly.

Example:
Interest received on foreign account: 5.00
Tax paid: .50

Do I pay DIRT on the €5.00 and allow a credit of .50?
Or do I pay DIRT on the €4.50?

Many thanks.
 
As I understand it, EU rules mean that interest earned in an EU country is taxed at the same rate as in Ireland ie DIRT (this is to ensure that the single market is a reality) and no taxes should be deducted as per double taxation treaties with EU countries

If it is a non-EU country, then the rights to tax the interest is laid out in the double taxation treaty. In Ireland, it will probably be taxed at your marginal tax rate

Normally you will declare the gross amount as EU earned interest or non-EU earned interest along with the foreign tax deducted, if any
 
and no taxes should be deducted as per double taxation treaties with EU countries

Depends on the EU country. Poland, for example, apply a reduced rate of tax for non-Polish-resident EU account holders. The difference between the reduced tax rate and the DIRT tax rate needs to be paid to the Revenue.
 
If I can't be bothered filing the paperwork with the foreign bank to get the lower non-resident withholding tax, will I get full relief from Irish revenue on foreign tax deducted?

I've opened a Portuguese account through Raisin. To reduce the Portuguese withholding tax from 28% to 15% I need to get the Irish Revenue to sign a Portuguese non-resident form in triplicate, which I then post to Raisin.

As 28% is less than the DIRT rate I'd be paying in Ireland anyway, I'm not sure why I need to bother myself, Revenue or Raisin with this paperwork (obviously I will still declare the account and interest earned on my Irish tax returns).
 
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