Deposit Interest Retention Tax
Deposit Interest Retention Tax (abbreviated as DIRT), is a retention tax charged on interest earned on bank accounts, as well as some other investments. It was first introduced in Ireland in the 1980s to reduce tax evasion on unearned income.
DIRT is deducted at source by financial institutions From 1 January 2012, DIRT is charged at 30% (was 27% in 2011) for payments made annually or more frequently. The tax is deducted by the bank or other deposit-taker before the interest is paid to you. DIRT will be charged at 33% for payments made less frequently.
Persons aged over 65 or incapacitated, whose income is less than the exemption limit (currently €20,000), may claim a refund of DIRT, or may submit an appropriate form to their banks or financial institutions to have interest paid free of DIRT.
DIRT does not apply to:
- Interest on deposits where the beneficial owner is a non-resident
- Deposits of companies which are chargeable to corporation tax
- Deposits of Revenue-approved pension schemes
- Deposits belonging to charities
Read more about this topic: Taxation In The Republic Of Ireland
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