DIRT question - Foreign Interest

cnocbui

If part of your income is derived from Interest earned in non-EU bank accounts, should Revenue be calculating tax on it by applying the DIRT rate of tax to it, rather than just treating it as income and applying normal income tax rates to it?

The ROS Offline Form 11 is doing the former and taxing it a 41% where it would be 20% if treated as income.

srsly78

Non-EU interest is taxed at the marginal rate I believe. Whereas foreign EU interest has dirt applied as normal.

cnocbui

Thank you. It appears The ROS offline Form 11 has a bug in it.

srsly78

How so? The marginal rate is 41%. If you earned nothing else for the year this rate could be a lot lower.

To be clear I should have said "your marginal rate", not "the marginal rate". Also note that DIRT is also 41% so it may not make any difference!

cnocbui

My income would be taxed at 20%. The ROS form is applying a 41% rate of tax to deposit interest in a non-EU bank account.

srsly78

So you have no income over 32k? If so contact the Revenue for clarification. Maybe the treatment of non-eu interest has changed.

cnocbui

Yes, that is the case. I have been on to Revenue and they replicated the problem and so will have to manually intervene on the return to fix it.

Thanks for your help.

mozattack

I thought non EU deposit interest was taxed at marginal rates.

Irish interest at DIRT rates.

EU interest at DIRT rates (if return filed on time)

=> this is totally off the top of my head so could be wrong but it is how I understood it to be