Dividends are payments by a company to you as a reward for owning a share in the company. Dividend payments are taxable and you must declare this income to Revenue.
If you receive payments that have not been taxed under Pay As You Earn (PAYE) and the payments total:
- less than €5,000 a year, usemyAccountto declarethis incomeon your Income Tax return (Form 12)
- or
- more than €5,000 a year, you will need to register forself-assessment. Once you register, file your tax return (Form 11) onRevenue Online Services (ROS).
Note
Dividend income is added to your other income. The Income Tax rate you pay depends onyour total income and personal circ*mstances.Dividend income is also liable to Universal Social Charge (USC) and Pay Related Social Insurance (PRSI).
Dividends paid by Irish resident companies
If you are resident in Ireland, Dividend Withholding Tax (DWT) will be deducted at a rate of 25% before you receive the payments.
You are liable to tax on the gross dividend at your marginal rate of tax. Depending on your personal circ*mstances, you will pay Income Tax at the:
- standard rate (currently 20%) on income below the rate band
- and
- higher rate (currently 40%) on any balance.
You are entitled to a credit for the tax withheld by the company paying the dividend. If the balance of the withheld tax exceeds your tax liability, you will be entitled to a tax refund.
- Example 1
In February 2020, Joe received a net dividend of €750 from an Irish company.
Breakdown of Joe’s net dividend Description Value Gross dividend
€1,000
Dividend withholding tax deducted (25%)
€250
Net dividend received
€750
Joe is a higher rate taxpayer. His tax rate on the dividend income will be 52%, which is 40% Income Tax, 4% PRSI, and 8% USC. Joe must declare this income on his tax return.
Taxation of Joe’s gross dividend Description Value Gross dividend
€1,000
Income Tax (40%)
€400
PRSI (4%)
€40
USC (8%)
€80
Total tax
€520
Less credit for DWT paid
(€250)
Tax payable
€270
Dividends paid by UK companies
You pay Irish tax on the net dividend received by you. No credit is allowed for any UK tax already deducted from the dividend payment.
You must convert the net payment received to Euro and declare it on your Irish Income Tax return.
- Example 2
In February 2020,Aisling received a dividend of €900 net from a UK company.
Breakdown of Liz’s net dividend Description Value Gross dividend
€1,000
UK domestic tax credit
€100
Net dividend received
€900
Aislingis taxed in 2020 on €900. She will pay Income Tax, USC and PRSI on the dividend income and must declare this income on her tax return. No credit is available for the UK domestic tax credit, this amount is disregarded for Irish tax purposes.
Other foreign dividends
You are liable to tax on the gross dividend at your marginal rate of tax.
The foreign jurisdiction paying the dividend may withhold tax on payment of the dividend. There might be a Double Taxation Agreement (DTA) in place between Ireland and the foreign jurisdiction. When there is, the DTA may provide that the rate of withholding is reduced in certain circ*mstances. The DTA may also provide relief in respect of foreign withholding tax on the dividend received.
Foreign dividends received by an Irish tax resident individual may suffer Irish Encashment Tax. You are entitled to a credit against your Income Tax liability for the Encashment Tax.
Published: 01 May 2024 Please rate how useful this page was to you Print this page
- Related topics
- Further guidance
- Part 05-01-21aRemittance basis of assessment
- Part 06-08A-01Dividend Withholding Tax (DWT) - Details of Scheme
- Part 05-01-21aRemittance basis of assessment
