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Rate of corporate tax deduction for negative interest rates on investment deposit acc

  • 23-08-2018 5:40pm
    #1
    kathryn1985
    Registered Users, Registered Users 2 Posts: 28 ✭


    Hi,

    Can anyone advise what the rationale is for only allowing a tax deduction at 12.5% for negative interest rates whereas positive interest income is taxed at 25%.


    Thanks
    Kathryn


Comments

  • #2
    Stanford
    Registered Users, Registered Users 2 Posts: 1,194 ✭✭✭Stanford


    Excuse the ignorance but what is a negative interest rate?


  • #3
    kathryn1985
    Registered Users, Registered Users 2 Posts: 28 ✭kathryn1985


    Because ECB interest rates are negative, some banks have a negative interest rates for short term deposits I.e costimg money as opposed to earning money


  • #4
    Stanford
    Registered Users, Registered Users 2 Posts: 1,194 ✭✭✭Stanford


    Thank you


  • #5
    thegolfer
    Registered Users, Registered Users 2 Posts: 346 ✭✭thegolfer


    Interest charged on a loan or an overdraft, would under normal conditions be deemed a trading expense, and thus a tax deduction for the trade.

    That trade income is taxable at 12.5%, and any allowable deductions, interest, are in effect as you have said are taxable at 12.5%.

    Interest income on the other hand, deposit acxount say, is deemed investment income, and taxable at 25% .

    In some very limited circumstances, it's 12.5%, but an exception to the rule.

    No deductions are allowable for taxable income at 25%.


  • #6
    kathryn1985
    Registered Users, Registered Users 2 Posts: 28 ✭kathryn1985


    thegolfer wrote: »
    Interest charged on a loan or an overdraft, would under normal conditions be deemed a trading expense, and thus a tax deduction for the trade.

    That trade income is taxable at 12.5%, and any allowable deductions, interest, are in effect as you have said are taxable at 12.5%.

    Interest income on the other hand, deposit acxount say, is deemed investment income, and taxable at 25% .

    In some very limited circumstances, it's 12.5%, but an exception to the rule.

    No deductions are allowable for taxable income at 25%.

    Thank you. Really appreciate your explanation above.


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