I am informed by the Revenue Commissioners that the legislation governing the operation of Deposit Interest Retention Tax (DIRT) is set out in Chapters 4 and 5 of Part 8 of the Taxes Consolidation Act 1997 (the Act). Under Section 257 of the Act all deposit takers, including credit unions, are obliged to deduct Deposit Interest Retention Tax (DIRT) from payments of interest or dividends made to an account unless the account qualifies as an exempt account. There is no specific exemption in the case of interest or dividends paid on deposit or credit union accounts held by children.
Separately, there is an obligation on a deposit taker to obtain the tax reference numbers of account holders for the purpose of reporting details of certain interest payments to the Revenue Commissioners. The legislation governing this reporting requirement is set out in Section 891B of the Taxes Consolidation Act 1997 and the Return of Payments (Banks, Building Societies, Credit Unions and Savings Banks) Regulations 2008 (the Regulations). Regulation 7 of the Regulations requires deposit takers to make all reasonable efforts to obtain the tax reference number of any customer who opens a new account on or after 1 January 2009. There is no requirement to obtain a tax reference number in the case of accounts opened prior to this date.
The requirement to deduct DIRT from an interest payment exists regardless of whether the deposit taker is in possession of the tax reference number. Therefore, in the circumstances outlined by the Deputy, DIRT is correctly deductible from the interest payment. I would point out that there is no distinction between the liability to pay DIRT and the liability to the payment by persons, regardless of age, who do not have a tax reference number of, for example, VAT, or other taxes such as CGT or CAT.