- We will deduct Deposit Interest Retention Tax (DIRT) at the standard rate (at present 20%, but this may change), from all interest earned, and we will pay this directly to the Revenue Commissioners.
- You do not at present have to pay other Irish income tax on the interest, but you may be subject to PRSI/Health levy.
That's great news - are you absolutely certain? I'd be very grateful if you could post the link to Revenue where this is stated since I was about to return interest from C.U. and INBS and pay the extra 22%.Originally posted by sob
...when banks (all banks) deduct DIRT tax on interest it is in full settlement of any tax liability i.e no further income tax is required. It is outlined on Revenue.ie, that DIRT deducted is said to satisfy your full tax liability,..
DIRT of 20% deducted at source is definitely the full extent of one's tax liability on interest in most cases regardless of one's marginal income tax rate. See [broken link removed]:That's great news - are you absolutely certain?
The payment of retention tax at the standard rate by individuals liable to income tax at the higher rate is regarded as satisfying the individuals' full liability to tax.
CU share/deposit accounts vary in their tax treatment. Some are exempt from tax on interest up to certain limits. Some have DIRT of 20% deducted at source. Others have no tax deducted and the holder is liable for self declaration and payment of income tax on the interest/dividend payments. See [broken link removed]. If the INBS account was a deposit account with DIRT deducted at source then you should have no further liability.I was about to return interest from C.U. and INBS and pay the extra 22%.
If the Form 12 asks for details if deposits and interest then you must return it even if there is no further liability on them.The only savings accounts I have are ones where DIRT is always deducted. What I'm wondering now is - do I have to declare on Tax Return Form 12 any interest received (from savings on which full tax was paid and stating that DIRT was deducted)?
If the question is asked then you must answer it or run the risk of filing an incomplete/erroneous return.I am truly allergic to forms so would it be wrong just to ignore that question and save myself the bother of form filling? In other words would it be wrong just to ignore that question?
I guessed you'd say that ClubManoriginally posted by ClubMan
If the question is asked then you must answer it or run the risk of filing an incomplete/erroneous return.
I clicked on the CU link and read this - so what do you think of this statement?CU accounts vary in their tax treatment.
Credit Union Deposit Accounts
If you have a Deposit Account, all interest on deposits will be subject to a Retention Tax at 20%. You have no further liability to income tax on this interest and are not required to make any declaration to the Revenue.
Yes I did and have confirmed that my (small) CU A/c is a Special Share Account on which the CU deducts DIRT and was advised there is no further tax liability. In fact I was also told by my CU that the majority of their savings accounts are of this type.originally posted by ClubMan
Did you read the full CU guide to taxation?
Now I don't know whether or not to declare such interest on Form 12From Revenue site
Deposit takers are not required to make returns to Revenue of payments of interest subject to deduction of retention tax.
I think that may be because (if I recall correctly) the default, when the new CU account taxation regime came into force a while back, was for existing share accounts to be converted into special share accounts unless the account holder told the CU otherwise. This meant that DIRT at 20% was deducted at source rather than the account holder being liable for self declared/paid income tax on the returns.In fact I was also told by my CU that the majority of their savings accounts are of this type.
I'm self employed and was charged PRSI on my deposit interest (after DIRT) last year. I'd never heard of this but after doing the forms in ROS I noticed what I thought was a "bug". Apparently not and I was taxed again on my interest!DIRT of 20% deducted at source is definitely the full extent of one's tax liability on interest in most cases regardless of one's marginal income tax rate.
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