Encashment tax

Encashment tax is a withholding tax deducted from income from public revenue dividends and dividends of a non-resident body. The individual who is responsible for the payment of income must deduct the tax.

Note

The term public revenue dividends includes dividends, interest and annuities payable out of both:
• the public revenue of any government
• the revenue of any foreign public authority or institution.

The standard rate of Income Tax (20%) applies to encashment tax.

Revenue can relieve a chargeable person of the obligation to deduct encashment tax on foreign dividends payable to Irish residents.

We grant relief by way of authorisation in a letter signed by an Assistant Secretary of the Revenue Commissioners. This letter absolves the chargeable person of the obligation to deduct encashment tax in respect of an account owned by a particular person.

A chargeable person should make an application for exemption by writing to:

Office of the Revenue Commissioners
Services and Transaction Taxes Unit (STTU)
Government Offices
Mill Lane
Listowel
Co Kerry.

For more information on this exemption see Schedule 2 TCA 1997.