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Deposit Interest

  1. Overview
  2. How do you declare Deposit Interest?
  3. What DIRT rate is applicable?
  4. Who is exempt from DIRT?
  5. Changes to the status of DIRT-free accounts
  6. Can you claim a DIRT refund?
  7. Non-resident account holder
  8. Foreign deposit income

Foreign deposit income

The extent to which you are liable to Irish income tax on your foreign-sourced deposit interest income  depends on your residence and domicile status. For more information, please see Tax residence.

Note

Foreign-sourced income includes interest from accounts in other EU Member States and from non-EU countries.

If you are Irish resident and domiciled, you are liable to Irish income tax on the receipt of foreign income. In general, you will be charged at the standard rate of 20% up to what is known as the standard rate cut off point. Any income earned in excess of that is charged to tax at 40%.

The rate of tax that applies to deposit income depends on the source of the income.

Irish sourced deposit interest

Savings are generally subject to Deposit Interest Retention Tax at a rate of 33%. Examples of savings that are subject to DIRT are savings with an Irish bank, a credit union or An Post. Where applicable, DIRT will be deducted by the deposit taker.

EU sourced deposit interest

Interest on savings with an EU bank or other deposit taker is generally taxed at the same rate as DIRT.

Non-EU sourced deposit interest

Non-EU sourced deposit interest including UK accounts, are taxed at the higher of the DIRT rate and your marginal rate of tax. If you are a standard rate taxpayer, your deposit interest is taxed at the DIRT rate. However, if you are a higher rate taxpayer, your interest will be taxed at 40%.

  • Example

    John is an Irish resident and domiciled individual, who earns €50,000 as a higher rate taxpayer. John earned an additional €30,000 in deposit interest from a US bank. The deposit income is taxable.

    Since the income is from a non-EU source, and this income is above the standard rate cut off point, it is taxed at the higher rate of 40% and marginal rate of tax. John's total tax liability on the €30,000 is €12,000 (€30,000 x 0.4 = €12,000).

Pay Related Social Insurance (PRSI) may apply and Universal Social Charge (USC) does not apply to deposit interest whatever its source.

Published: 15 October 2024 Print this page

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