Taxes Consolidation Act 1997 Schedule 2 paragraph 14

Deduction of encashment tax

Schedule 2 paragraph 14 requires a paying and collecting agent to deduct encashment tax at 25 per cent from payments of specified dividend income and remit it to Revenue on behalf of the recipient.

• A chargeable person making a payment of specified dividend income must deduct income tax at 25 per cent and pay it to Revenue on behalf of the person entitled to the income.
• The tax deducted is treated as a payment of income tax by the recipient and is credited against the dividends received.
• The obligation to deduct does not apply where the recipient is a company that is beneficially entitled to the income and is within the charge to corporation tax on it.
• The deduction requirement is subject to Chapter 2 of Part 3, which allows interest on Irish Government bonds to be paid free of withholding tax.