Dáil Éireann debate -
Tuesday, 30 Jan 2001

Vol. 529 No. 1

Written Answers. - Withholding Tax.

Michael D. Higgins

Question:

498 Mr. M. Higgins asked the Minister for Finance the reason the cheque issued to a person (details supplied) by Forfás for work done was subject to a withholding tax; and if he will make a statement on the matter. [2222/01]

Minister for Finance (Mr. McCreevy)

Chapter 1, Part 18 of the Taxes Consolidation Act, 1997, provides for a withholding tax to be deducted from payments made by certain bodies for professional services. Professional services withholding tax , PSWT, is deducted by accountable persons from relevant payments made by them to specified persons in respect of professional services. The following are accountable persons: Government Departments and offices, local authorities, including health boards, vocational education committees and the GMS and commercial and non-commercial semi-State bodies.

Forfás is an accountable person for the purposes of the legislation. Accordingly, payments made by Forfás for professional services are subject to PSWT. It would appear that Forfás was satisfied that the service provided by the taxpayer was a professional service for the purposes of PSWT and tax was deducted accordingly. PSWT is not an additional tax but a deduction on account of a taxpayer's final liability, made at the point of payment. On presentation of the necessary forms to their tax office, taxpayers will receive full credit for all PSWT deducted. For individual taxpayers assessable to income tax, this credit is given in the tax year in which the PSWT was deducted. For companies assessable to corporation tax, the credit is given in the accounting period in which PSWT was deducted.