Taxation on overseas funds received

Roberto_gas

Hi Folks,

Can anyone help me with tax rules if i xfer funds from ireland overseas and get same amout back at a later stage back to ireland ? Am I liable for any tax on them ?

The country has a double taxation treaty with ireland.

Thanks.

Peregrinus

Roberto_gas wrote: »

Hi Folks,

Can anyone help me with tax rules if i xfer funds from ireland overseas and get same amout back at a later stage back to ireland ? Am I liable for any tax on them ?

The country has a double taxation treaty with ireland.

Thanks.

You mean you have, say, 10k sitting in an Irish bank, and you transfer it to a bank in another country, and later you transfer the money back to a bank in Ireland?

No, no tax liablity. Transferring money from bank to bank is not a taxable event. It doesn't magically become one if one of the banks is in another country.

Of course, if while held abroad your money earns interest, or you invest it ins something and receive dividends, or a capital gain acrrues, or something like that, that may be a taxable event. But that doesn't depend on you remitting the money back to Ireland.

Roberto_gas

Peregrinus wrote:

Of course, if while held abroad your money earns interest, or you invest it ins something and receive dividends, or a capital gain acrrues, or something like that, that may be a taxable event. But that doesn't depend on you remitting the money back to Ireland.

Thanks yes it will be used to earn returns overseas...and taxation of that will be done in overseas country....so if i xfer 6k euros and get 7000 euros back after a year...i wont get taxed ? Or i can only get 6000 back ?

wally1990

Roberto_gas wrote: »

Thanks yes it will be used to earn returns overseas...and taxation of that will be done in overseas country....so if i xfer 6k euros and get 7000 euros back after a year...i wont get taxed ? Or i can only get 6000 back ?

Is this being invested overseas?(shares/stock/property/currency etc)
Transfer 6k and get back 7k?

Peregrinus

So, you transfer 6k euros overseas and then invest it in something, and you earn a return of 1k - it may be interest, it may be dividends, it may be a capital gain, whatever.

Irish residents are generally taxable in Ireland on their worldwide income and gains so, assuming you're an Irish resident, you are liable to Irish tax on the 1k. It may be income tax or it may be capital gains tax, depending on the nature of the return you have earned.

This is not connected with or dependent on the remittance of the 1k to Ireland - the liability to tax is in incurred when you earn your income or when your gain accrues, even if you never remit it to Ireland.

You may of course also be liable to tax in the country where you earn the income/gains. Depending on the amount involved and on the terms of the Double Taxation Agreement between Ireland and that country, this may reduce or even completely eliminate your liablity to Irish tax. Or it may not.

Roberto_gas

Peregrinus wrote:

You may of course also be liable to tax in the country where you earn the income/gains. Depending on the amount involved and on the terms of the Double Taxation Agreement between Ireland and that country, this may reduce or even completely eliminate your liablity to Irish tax. Or it may not.

Thanks...that makes sense...so in terms of getting original amount back...there should not be any tax liabilities or questions as to where this money came from ?

Roberto_gas

wally1990 wrote:

Is this being invested overseas?(shares/stock/property/currency etc) Transfer 6k and get back 7k?

Yes thats what i meant...

CIARAN_BOYLE

Roberto_gas wrote: »

Thanks...that makes sense...so in terms of getting original amount back...there should not be any tax liabilities or questions as to where this money came from ?

establish if you are irish resident, ordinarily resident or domiciled.

if yoy for example send 50k abroad and invest it. earn 20k profit.

if not irish domiciled and not subject to income tax on foreign earnings the following may apply

if you bring the 50k back revenue may ask what you did with it. they may choose to deem the 50k as being part appreciation and part capital and apply taxes that would have applied on the gain or income on the remittance basis.

however if irish domiciled and paying tax in ireland on income there will be no questions re the capital.

Roberto_gas

CIARAN_BOYLE wrote:

however if irish domiciled and paying tax in ireland on income there will be no questions re the capital.

Yes irish domiciled and paying tax in ireland...does it mean no questions if i remit funds back from overseas ?

Peregrinus

Roberto_gas wrote: »

Yes irish domiciled and paying tax in ireland...does it mean no questions if i remit funds back from overseas ?

There may be questions. The remittance of the funds is not in itself a taxable event, but the revenue may want to explore whethe the circumstances in which you acquired the funds were taxable - An gift? An inheritance? An accumulation of hitherto undisclosed income or gains?

Roberto_gas

Peregrinus wrote:

There may be questions. The remittance of the funds is not in itself a taxable event, but the revenue may want to explore whethe the circumstances in which you acquired the funds were taxable - An gift? An inheritance? An accumulation of hitherto undisclosed income or gains?

Exactly thats my question...so if i show proof that i transferred it sometime ago...that should be fine ? Or i need inputs from accountants on this..

Peregrinus

Roberto_gas wrote: »

Exactly thats my question...so if i show proof that i transferred it sometime ago...that should be fine ? Or i need inputs from accountants on this..

You're hung up on when the money was transferred out and transferred back. This is completely irrelevant. The transfer of the money may bring it to the revenue's attention but, when they start asking about it, they won't be asking about where, when or even why it was transferred. They'll ask about how you came by it in the first place.

So if you transfer 7k into Ireland and they say "where'd you get that from, then?" and you say "I transferred it out of Ireland last year and now I'm bringing it back", they'll say "yes, but where did you get it from? How come you had it to transfer out of Ireland in the first place?"

Basically, what they want to know is if any part of the money represents untaxed income, gains, gifts or inheritances. They won't be fobbed off with answers about how, after you got the money, you moved it around between different banks or different countries.