Withholding tax on interest payments and royalty payments
Generally, Withholding Tax, at the standard rate of tax, must be deducted from:
- annual interest payments
- and
- royalty payments and other sums paid in respect of the user of a patent.
Peer to peer lending
Interest paid on finance that was raised from peer to peer, or crowd, funding falls within the Withholding Tax provisions. A company paying interest on either of these must deduct tax at the standard rate on the interest payment.
Exemptions, or exceptions, from the obligation to deduct Withholding Tax
There are an extensive range of exemptions, or exceptions, from the obligation to deduct Withholding Tax. These can be allowed without prior approval from Revenue. The exemptions, or exceptions, do not apply to individuals resident in the State. In certain circumstances, the exemptions and exclusions are disapplied. This occurs where certain payments are made to associated entities in:
- zero or no-tax jurisdictions
- or
- jurisdictions on the European Union (EU) list of non-cooperative jurisdictions.
For further information, please see: