If holding an account with wise they give cashback on money held,, but they subtract the belgium tax at 30%.
Ive seen on reddit recommendations (quotes below) to declare this and that the additional tax would be Irish income tax 52% - (30% already taken)
"If your double taxation treaty allows it, yes you only pay tax on the difference between your taxes and Belgian withholding tax of 30%. In the case of Ireland, that would be 52%, so the balance remaining payable would be 22% of the cashback payments."
"Wise don't call their payments interest payments for good reason. They are called cashback payments. This may enable you to pay a lower rate of tax in your country if deposit interest taxes are lower than income taxes."
"On the Irish tax return form, there is a box where you fill in all foreign interest income earned that year. The next box is how much was withheld by foreign governments with which Ireland has a double taxation treaty which avoids double taxation of interest income. You write in the withheld amount there. You subtract the bottom from the top, the remainder is what you pay income tax at 52% to 55% upon.
You never talk to nor have dealings with the Belgians in this case"
"You offset it against the tax you pay on that interest income in your home country. So if you pay 55% of interest income in tax, then you deduct the 30% which went to the Belgian government and pay the balance 25% to your government. Thus overall you are no worse off."
But i thought this would be treated as DIRT, and ive seen another example where i would need to get the Belgium tax authority to give me back the 15% to bring the withholding tax down to 15% due to double taxation treaty. This itself seems to be quite a difficult thing to do.
i would assume the correct method is that its treated as DIRT ? as its interest gained on an deposit in a EU location, and as its Belgium , the withholding tax is 15% , but given that Wise are taking 30% withholding , it would be up to me to contract the belgium tax authority. And then i need to fill in the form 11 to this effect.
which as i mentioned seems quite difficult to actually achieve
Ive seen on reddit recommendations (quotes below) to declare this and that the additional tax would be Irish income tax 52% - (30% already taken)
"If your double taxation treaty allows it, yes you only pay tax on the difference between your taxes and Belgian withholding tax of 30%. In the case of Ireland, that would be 52%, so the balance remaining payable would be 22% of the cashback payments."
"Wise don't call their payments interest payments for good reason. They are called cashback payments. This may enable you to pay a lower rate of tax in your country if deposit interest taxes are lower than income taxes."
"On the Irish tax return form, there is a box where you fill in all foreign interest income earned that year. The next box is how much was withheld by foreign governments with which Ireland has a double taxation treaty which avoids double taxation of interest income. You write in the withheld amount there. You subtract the bottom from the top, the remainder is what you pay income tax at 52% to 55% upon.
You never talk to nor have dealings with the Belgians in this case"
"You offset it against the tax you pay on that interest income in your home country. So if you pay 55% of interest income in tax, then you deduct the 30% which went to the Belgian government and pay the balance 25% to your government. Thus overall you are no worse off."
But i thought this would be treated as DIRT, and ive seen another example where i would need to get the Belgium tax authority to give me back the 15% to bring the withholding tax down to 15% due to double taxation treaty. This itself seems to be quite a difficult thing to do.
i would assume the correct method is that its treated as DIRT ? as its interest gained on an deposit in a EU location, and as its Belgium , the withholding tax is 15% , but given that Wise are taking 30% withholding , it would be up to me to contract the belgium tax authority. And then i need to fill in the form 11 to this effect.
which as i mentioned seems quite difficult to actually achieve