We are increasingly seeing foreign deposit accounts being touted as a solution to the miserable deposit rates being offered here. Questions about Withholding Tax as it applies to Deposit Interest received from banks in jurisdictions with which Ireland has a double taxation agreement appear here almost daily.
Would it be appropriate to have a key post covering this, and if so is there anybody competent and willing to knock it together ?
@BrokeBroker Raisin are not going to issue you tax documentation, you've misunderstood. It's up to you to get a residency certificate from the revenue and give to raisin.
Yes I have 20K in with blueOR at the 6 month rate. Not bothering with the residency certificate as I don't care if it's Irish revenue or Latvian revenue getting the tax takeCool.
Just out of curiosity, did you open an account with BluOr?
Double taxation means that the income/gain is taxed twice
Generally, double taxation treaties between two states allow that the tax paid in one can be offset against the tax due in the second, so the income/gain is taxed once and not twice
Has anyone successfully got a letter-of-tax-residence from revenue yet, and how long did it take to process from your time of applying for it through revenue.ie?
So all deposit interest earned outside Ireland but within the EU is liable to tax at 37% (33% DIRT + 4% PRSI) instead of 33%. I would imagine that many Irish customers of Raisen, Advanzia, Lightyear etc are not aware of this.Unlike most countries Ireland applies DIRT tax to interest and Credit Union dividends at the rate of 33% on or after January 2020 (various higher rates applied before that). Its called a 'final liability tax' and is not subject to USC but you are liable for PRSI at 4% if over 16 and under 66.
If your EU deposit interest is paid gross you are obliged to return it and it is taxed at the same rate as Irish deposit i.e. 33% and PRSI.
Non-EU deposit interest is taxed at your marginal tax rate and PRSI apllies.
My understanding was that the PRSI element only kicks in if you are a chargeable person earning over €5k in interest, but would like to be sure.So all deposit interest earned outside Ireland but within the EU is liable to tax at 37% (33% DIRT + 4% PRSI) instead of 33%. I would imagine that many Irish customers of Raisen, Advanzia, Lightyear etc are not aware of this.
Is there somewhere on Revenue's website that this is covered?
OP believes the PRSI charge kicks in if you are using Form 11 for any reason, whether under the €5K PAYE limit or not, per post in separate thread here. I think we'd need someone here with experience & full knowledge to confirm however.My understanding was that the PRSI element only kicks in if you are a chargeable person earning over €5k in interest, but would like to be sure.
So essentially there is a cost (tax of 4% PRSI) for the essential usage of Form 11 for other purposes (eg ESPP), even if non-PAYE income is less than €5K. That 4% could equate to up to €200 (if earning €5k in foreign interest).I use Form 11 due to ESPP and I get charged 4% PRSI tax on top of 33% DIRT for Deposits outside of Ireland. I'm actually PAYE and I don't earn more than 5K€ interest so I believe this is related with Form 11 usage.
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