Dividend tax in Ireland

According to the Irish legislation, all companies registered in Ireland are required to comply with the terms and conditions stated in the Dividends Withholding Tax legislature. The standard withholding tax for dividends in Ireland is 20%. This Tax will be deducted from payables which are relevant distributions i.e.income tax and corporation tax (applicable at the rate of 12,5%).
Irish companies and organizations are liable to pay the Dividends Withholding Tax twice a year. On the 14th day of each month companies which are required by the tax legislation to comply with Withholding tax should submit all applicable documents through an online platform which is available to aid in the submission of all relevant documents. This system is known as a REVENUE ONLINE SERVICE. All companies are required to comply regardless of their tax contribution during that particular month concerned. 
Who is exempted from paying Dividends tax in Ireland?

  • In a bid to promote natural resources operations such as mining operations and woodlands occupation, Ireland exempts these legal entities from paying DWT.  In the case that an Irish resident company receives an advance on distributions made by another Irish company which owns 51% shares of the former, then that company or organization is exempted from withholding tax as well.  
  • According to the Tax Consolidation Act, charity organizations and pension plan cooperations are also excused from paying the Withholding Tax. The same applies to Employee share ownership trusts and unit trusts. 
  • Organizations established to enhance and promote the development of sports and sporting activities such as athletics have also been exempted from paying withholding tax.  
  • None resident companies are liable to DWT except for companies whose residential countries have Double Taxation Treaties or Patent-Subsidiary Directives with Ireland.  Note that, the company in question must not be controlled directly or indirectly by any Irish resident. 
  • Another situation where a foreign company can be excused from paying DWT is when it owns 75%  or more of the shares of an Irish subsidiary. 
  • Companies that have approval from the Minister of Finance and qualify to be listed on the Stock Exchange of a country in the European Union can also be excused from paying Dividends Withholding Tax. The same applies to companies in control of more than one stock exchange in any EU member state.  

Only excluded individuals or companies can claim a refund of the Dividend Withholding Tax (DWT). To acquire further detailed information on foreign company formation and tax exemption contact our invaluable consultants who will prove to be of great assistance to you. 

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