Kevin Humphreys
Question:137. Deputy Kevin Humphreys asked the Minister for Finance the rate of taxation to which credit union dividends are subject; and if he will make a statement on the matter. [56214/12]
View answerTuesday, 18 December 2012
Questions (137)
Written answers
I am informed by the Revenue Commissioners that dividends arising on credit union share accounts are subject to tax as follows:
-Regular Share Accounts: The credit union member is required to declare the amount of dividends received on his/her annual tax return form and to pay tax on this amount at his or her marginal rate of income tax. In addition, the dividend income will be subject to the Universal Social Charge at the appropriate rate.
-Special Share Accounts: Dividends arising on special share accounts are subject to Deposit Interest Retention Tax (DIRT) at the rate of 30 per cent (33 per cent from 1 January 2013) and the account holder has no further liability to tax. The Universal Social Charge does not apply to interest income subject to DIRT.
-Special Term Share Accounts: These accounts are subject to a tax regime whereby the first €480 (in the case of medium-term accounts where the money is held for at least 3 years) or €635 (in the case of long-term accounts where the money is held for a minimum of 5 years) of dividends is exempt from tax. Dividend payments in excess of these limits are subject to DIRT at the rate of 30 per cent (33 per cent from 1 January 2013) and the account holder has no further liability to tax including the Universal Social Charge.
In addition the Deputy should note that dividends arising on special share accounts or special term share accounts that are held by persons: aged over 65 whose total income is less than the age exemption limits, or who are permanently incapacitated and who would be entitled to a refund of DIRT if the tax were deducted from their dividend income, qualify for exemption from DIRT on credit union accounts in the same way as for deposit interest earned on bank account.