Dáil Éireann Debate, Wednesday - 27 March 2013
102. Deputy Sean Fleming asked the Minister for Finance the dates on which the increase in deposit interest retention tax became effective in respect of changes in the budget announced in December 2011 and December 2012; and if he will make a statement on the matter. [15453/13]
View answerThe increase in the rates of Deposit Interest Retention Tax (DIRT) arising from Budget changes announced in December 2011 and December 2012 took effect in respect of interest paid or credited on or after 1 January 2012 and 1 January 2013 respectively. Accordingly, the increase in the standard DIRT rate from 27% to 30% and in the higher DIRT rate from 30% to 33%, announced in December 2011, applied to deposit interest that was paid or credited to an account on or after 1 January 2012. Similarly, the increase in the standard DIRT rate from 30% to 33% and in the higher DIRT rates from 33% to 36%, which was announced in December 2012, applied to deposit interest that was paid or credited to an account on or after 1 January 2013.
I am advised by the Revenue Commissioners that the rate of DIRT that is applicable to a payment or crediting of deposit interest is the rate in operation on the date the deposit interest is paid or credited to the account, irrespective of the fact that part of that interest may have accrued before the date the rate was changed. This means there is no apportionment of the interest between the amount accrued before the date of the rate change and the amount due after that date. The new rate is applied to all of the interest paid on or after the date of the rate change.
There are two rates of DIRT. The most common rate is the standard rate, which is applied where the interest is payable annually or more frequently than annually. In the case of interest that is payable less frequently than annually or where the amount of the interest cannot be calculated until maturity of the investment, the rate to be applied is the standard rate plus 3 per cent, as shown above.
