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Tax on p2p lending/crowdfunding platforms

  • 27-12-2019 8:21pm
    #1
    Ayrtonsenna
    Registered Users, Registered Users 2 Posts: 2 ✭


    Hi,

    I have just read Revenue eBrief No. 89/18 on tax implications for p2p lending and I am still not clear on how it applies for lenders.

    My understanding so far is:

    1- I will be liable to income tax alone (40%).
    2- There will be a withholding tax at the standard rate (20%) taken automatically from my interests by the p2p lending platform.

    Is this correct? Additionally, I didn't understand the credit claim rule:

    "Where you earn less than €5,000 from non-PAYE sources2 you should include the
    interest on your Form 12 and claim a credit for the withholding tax suffered. Use
    myAccount to submit your Form 12 online through PAYE Services."

    Does it mean I will get a complete refund on the 20% withholding tax and will effectively pay only the additional 20% to reach my income tax?

    Is there also a withholding tax when I use a foreign platform such as Mintos (I suppose foreign companies wouldn't care about Irish withholding tax rules)?

    If there isn't, does it mean that there is a huge incentive to lend to Irish companies as an extra 20% will be lost on taxes otherwise?

    Thanks a lot if someone with more experience or knowledge can clarify this.


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