An ROI-resident company must deduct dividend withholding tax (DWT) at the standard rate from dividend payments and other profit distributions (s 172B).
DWT need not be deducted from distributions made to:
DWT may be credited against the recipient’s tax liability for the tax year in which the dividend is received (s 172J).
An annual payment (for example, a covenanted payment) is a payment that is pure income profit in the hands of the recipient. Where an annual payment is made:
Financial institutions must deduct deposit interest retention tax (DIRT) at 41% from interest payable on deposits. This is so, even though the higher rate is now 39%.The rate of DIRT will decrease by 2% each year for the next 4 years until it reaches 33% in 2020.
DIRT deducted from general deposit account interest satisfies income tax liability but must be included in the recipient’s return of income (s 261).
A person aged 65 or over, with income below €18,000 (individual) or €36,000 (married couple) may obtain a refund of DIRT (s 267).
An accountable person (a government department or State-funded body) must deduct professional services withholding tax (PSWT) at the standard rate from payments made for professional services (s 520) of:
A main contractor must deduct relevant contracts withholding tax (RCT) at 35% from payments made to unauthorised subcontractor who has been engaged to carry out a relevant contract, i.e., construction operations, forestry operations, or meat processing operations on behalf of the main contractor (s 530, 530A).
RCT also applies to activities carried out on the Continental Shelf.