Léim ar aghaidh chuig an bpríomhábhar
Gnáthamharc

Tax Yield

Dáil Éireann Debate, Tuesday - 18 September 2012

Tuesday, 18 September 2012

Ceisteanna (323)

Pearse Doherty

Ceist:

323. Deputy Pearse Doherty asked the Minister for Finance the current rate of deposit interest retention tax; the way DIRT is applied; and the sum that could be raised for the Exchequer if DIRT was increased by five percentage points. [38777/12]

Amharc ar fhreagra

Freagraí scríofa

I am advised by the Revenue Commissioners that since 1 January 2012 Deposit Interest Retention Tax (DIRT) is deducted at the rate of 30% from deposit interest. In addition a DIRT rate of 33% applies to interest that is not paid at annual or more frequent intervals or where the interest cannot be calculated until the maturity of the investment. This would include investments such as tracker bonds where the amount of interest payable depends on the changes in a financial or other index over a number of years. The rates of DIRT have been increased on a number of occasions in recent years as shown in the table.

Historic DIRT Rates

Period

Standard Rate

Non Standard Rate

1 January 2011 to 31 December 2011

27%

30%

8 April 2009 to 31 December 2010

25%

28%

1 January 2009 to 7 April 2009

23%

26%

1 January 2002 to 31 December 2008

20%

23%

DIRT is a non-refundable final income tax applied to deposit interest. There are some cases where DIRT can be refunded or interest can be paid without deduction of DIRT, principally applying to deposit interest arising on accounts held by any of the following:

- an individual who (or whose spouse or civil partner) is aged 65 or over where their total income in a year (including the interest income) is below the annual exemption limit;

-an individual who (or whose spouse or civil partner) is permanently incapacitated by reason of physical or mental infirmity from maintaining himself or herself and who is not liable to pay income tax because of the level of his or her income;

- individuals or companies who are not resident in Ireland, and

- companies (companies pay corporation tax at the rate of 25 per cent on any interest income earned).

The tax is deducted at source from any deposit interest paid or credited by a relevant deposit taker (e.g., a bank, building society, credit union, etc). The rate of DIRT applicable is the rate in operation on the date the interest is paid or credited to the account. It is estimated that the yield to the Exchequer from increasing the Deposit Interest Retention Tax (DIRT) rate by five percentage points would be around €95 million in a full year. This projection assumes no significant behavioral change by depositors or change in interest rates applied by financial institutions to savings.

Barr
Roinn