The dividend withholding tax is applied at a standard rate of 20% for dividend payments and other distributions made by companies registered in Ireland. Most Irish companies will pay dividends twice a year and the withholding tax will apply at source on the gross dividend. Irish individual shareholders will be levied the tax on the gross dividend at the marginal rate, but they are entitled to a credit for the withholding tax and a refund if the withheld amount exceeded their tax liability. However, there are also exceptions when it comes to the Irish withholding tax on dividends and these are:
Certain citizens or Irish companies are exempt from paying the withholding tax on dividends, according to several sections in the Tax Consolidation Act. Among these are:
Our specialists in company in formation provide accounting services for both local and foreign companies in Ireland.
Foreign individuals, residents of countries Ireland has double tax treaties with, but also non-resident charity organizations are exempt from paying the dividend tax. Foreign companies registered in a EU country that are not controlled by Irish citizens and non-resident companies that own 75% in an Irish subsidiary are also exempt from paying the dividend tax. Irish companies listed on the Stock Exchange of an EU country that have been approved by the Minister of Finance also qualify for exemption from paying the withholding tax on dividends.