Dividend Withholding Tax (DWT)
Who should withhold DWT?
DWT is deducted from all relevant distributions. Relevant distributions include all payments normally treated as a distribution for Income Tax and Corporation Tax (CT) which are:
- normal cash, and non-cash, dividends
- expenses incurred by close companies in providing benefits or facilities for a participator in the company
- excess interest paid by close companies to directors
- scrip dividends of quoted companies. These are additional share capital of a quoted company taken instead of a cash distribution
- and
- scrip dividends of unquoted companies.
DWT is also deducted where exemptions and exclusions have been disapplied for distributions made to an associated entity:
- in zero or no-tax jurisdictions
- or
- in jurisdictions on the European Union (EU) list of non-cooperative jurisdictions.
These are known as outbound payment defensive measures.
When DWT should not be deducted
Subject to the outbound payments defensive measures, DWT should not be deducted from:
- dividends paid to Government ministers, in their capacity as ministers
- dividends paid to the National Pensions Reserve Fund Commission
- distributions made by an Irish resident subsidiary company to its EU parent company, where withholding tax is not allowed under EU legislation
- dividends paid to a shareholder who makes an election under a stapled stock arrangement to receive their dividend from an associated non-resident company
- distributions made out of exempted profits from the occupation of woodlands
- distributions made out of certain exempted income from mining operations
- and, or
- distributions made by an Irish resident company to another Irish resident company of which it is a 51% subsidiary.
Companies should not deduct DWT from a distribution if they hold a valid DWT exemption declaration form for those subject to outbound payments defensive measures. These are either a:
For further information, please see Tax and Duty Manual Part 33-05-01.
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