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US Income, W8 and Irish tax

  • 16-08-2018 11:23am
    #1
    busterjones
    Registered Users, Registered Users 2 Posts: 154 ✭✭


    Hi -

    I work for an Irish company that was recently bought by a US one.

    I had a (very!) small piece of equity and as part of the negotiations of the sale, part of the payment was made through a loan note.

    I just received payment of this - from the US parent company and not through the usual company payroll (net of tax etc.).

    I've just been asked to complete a Form W8, which I've just done.

    Q...

    What are my tax obligations here? Is it simply 40% of what I received, due next October or would some US tax have been paid at source e.g. 15% and I owe the balance here (e.g. 25% of the gross payment)?

    Thanks!


Comments

  • #2
    dennyk
    Registered Users, Registered Users 2 Posts: 1,783 ✭✭✭dennyk


    The Form W-8 would generally be asserting that you are a foreign person not subject to the standard withholding for US tax purposes. However, depending on the type of transaction and what you provided on the W-8, there may still have been US withholding at a reduced rate. You'll need to ask whoever provided the payment in question for the details of any withholdings taken out.

    Tax treatment of the payment in Ireland will depend on exactly what the payment is for and how much if any was withheld for US taxes. It may attract a tax liability as a Benefit in Kind (if the equity was granted to you by the company for free or at a discount and you haven't yet paid the appropriate tax on it as a BIK), a dividend (if the payment was a dividend distributed to shareholders as part of the sale of the company), a capital gain (if your shares were actually sold or otherwise disposed of in this transaction), or possibly all of the above, depending on the circumstances. Your best bet would be to contact Revenue for advice (or possibly engage the services of a tax professional, if you have a more liberal definition of "very small" than some... :pac: ).


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