Dividend Income
Dividends are payments by a company to you as a reward for owning a share in the company. Dividend payments are taxable and you must declare this income to Revenue.
If you receive payments that have not been taxed under Pay As You Earn (PAYE) and the payments total:
- less than €5,000 a year, use myAccount to declare this income on your Income Tax return (Form 12)
- or
- more than €5,000 a year, you will need to register for self-assessment. Once you register, file your tax return (Form 11) on Revenue Online Services (ROS).
Note
Dividend income is added to your other income. The Income Tax rate you pay depends on your total income and personal circumstances. Dividend income is also liable to Universal Social Charge (USC) and Pay Related Social Insurance (PRSI).
Dividends paid by Irish resident companies
If you are resident in Ireland, Dividend Withholding Tax (DWT) will be deducted at a rate of 25% before you receive the payments.
You are liable to tax on the gross dividend at your marginal rate of tax. Depending on your personal circumstances, you will pay Income Tax at the:
- standard rate (currently 20%) on income below the rate band
- and
- higher rate (currently 40%) on any balance.
You are entitled to a credit for the tax withheld by the company paying the dividend. If the balance of the withheld tax exceeds your tax liability, you will be entitled to a tax refund.
- Example 1
In October 2024, Joe received a net dividend of €750 from an Irish company.
Breakdown of Joe’s net dividend
| Description | Value |
|---|
|
Gross dividend
|
€1,000
|
|
Dividend withholding tax deducted (25%)
|
€250
|
|
Net dividend received
|
€750
|
Joe is a higher rate taxpayer. His tax rate on the dividend income will be 52.1%, which is 40% Income Tax, 4.1% PRSI, and 8% USC. Joe must declare this income on his tax return.
Taxation of Joe’s gross dividend
| Description | Value |
|---|
|
Gross dividend
|
€1,000
|
|
Income Tax (40%)
|
€400
|
|
PRSI (4.1%)
|
€41
|
|
USC (8%)
|
€80
|
|
Total tax
|
€521
|
|
Less credit for DWT paid
|
(€250)
|
|
Tax payable
|
€271
|
Dividends paid by UK companies
You pay Irish tax on the net dividend received by you. No credit is allowed for any UK tax already deducted from the dividend payment.
You must convert the net payment received to Euro and declare it on your Irish Income Tax return.
- Example 2
In February 2020, Aisling received a dividend of €900 net from a UK company.
Breakdown of Liz’s net dividend
| Description | Value |
|---|
|
Gross dividend
|
€1,000
|
|
UK domestic tax credit
|
€100
|
|
Net dividend received
|
€900
|
Aisling is taxed in 2020 on €900. She will pay Income Tax, USC and PRSI on the dividend income and must declare this income on her tax return. No credit is available for the UK domestic tax credit, this amount is disregarded for Irish tax purposes.
Other foreign dividends
You are liable to tax on the gross dividend at your marginal rate of tax.
The foreign jurisdiction paying the dividend may withhold tax on payment of the dividend. There might be a Double Taxation Agreement (DTA) in place between Ireland and the foreign jurisdiction. When there is, the DTA may provide that the rate of withholding is reduced in certain circumstances. The DTA may also provide relief in respect of foreign withholding tax on the dividend received.
Foreign dividends received by an Irish tax resident individual may suffer Irish Encashment Tax. You are entitled to a credit against your Income Tax liability for the Encashment Tax.