Withholding tax on Dividend payment

Man From Delmonte

Hi All,

I need some clarification on Withholding tax on dividends.

I recently received a dividend payment from a company in the US. There was a withholding tax of 30% on the payment.

Now I know I have to declare this in Ireland and pay the taxes here, but can I claim back the tax paid in the US as we have a Double Taxation Agreement with them?

If so how can I go about claiming back this tax?

coylemj

I don't believe you can claim the US tax back but it shouldn't have been 30%, did the company send you a US tax form to fill out?

By declaring yourself to live outside the US and returning the form the withholding tax is just 15% because there is a tax treaty between Ireland and the US, it looks like you didn't fill in this form so you are defaulting to the standard rate of 30%.

towger

There is a form W8Ben I think, that you should fill out and the withholding tax would be less, 15 % I think. You cannot claim back the US tax, but when you prepare your Irish tax return the US tax paid will be taken into account and Irish tax reduced so that you do not pay tax twice.

coylemj

towger wrote: »

There is a form W8Ben I think, that you should fill out and the withholding tax would be less, 15 % I think. You cannot claim back the US tax, but when you prepare your Irish tax return the US tax paid will be taken into account and Irish tax reduced so that you do not pay tax twice.

Correct, this is the form...

http://www.irs.gov/pub/irs-pdf/fw8ben.pdf

but you'll need to get it from the company who are paying you the dividend and send it back to them, you cannot just send it direct to the IRS (US tax authorities)

The Irish Revenue Commissioners website suggests that you will not get any credit for foreign tax paid on the dividends, see page 7 of the PDF document linked to from this page.....

http://www.revenue.ie/en/tax/it/foreign-income-assets.html

towger

You will get credit for foreign dividends withholding tax if there is a double taxation treaty , which is the case between ireland and the US.

coylemj

towger wrote: »

You will get credit for foreign dividends withholding tax if there is a double taxation treaty , which is the case between ireland and the US.

It doesn't follow that you get credit because there is a double taxation treaty, this is from P.7 of the Revenue document.....

Q.9 The dividends I received have already been subjected to withholding tax at source. Am I entitled to a credit for the tax withheld at source?

A. This depends on whether Ireland has a Double Taxation Agreement (DTA) with the country from which the dividend was paid.

Ireland currently has DTAs with 45 countries. Generally, it is Article 10 of these Agreements that deals with the taxation of dividends. For a list of Ireland’s double taxation agreements, please click here.

In most cases, the dividend is taxed in the country of which the company paying the dividend is resident. The dividend is also taxable here and, in most cases, it is the net dividend that is taxed with no credit for any withholding tax suffered.

Man From Delmonte

Thanks for the replies guys.

Ill get on to my broker about the fw8ben form. Doesnt look good for the getting tax credits for the tax paid in the US though