From 1 January 2014, the rate of Deposit Interest Retention Tax (DIRT) is 41%. Under Self Assessment tax rules it is also liable for PRSI at 4%.
Irish banks will deduct DIRT at source from the interest earned on your account. If you are not liable for income tax you cannot obtain a refund of this DIRT unless you and/or your spouse are aged 65 or over.
This rule also applies to Deposit Accounts and Special Share Accounts operated by Credit Unions. On the other hand dividends paid by Credit Unions on Regular Share Accounts are liable for tax in the normal way.
Interest earned on foreign deposit accounts held outside the EU are liable for income tax in the normal way. If foreign tax is deducted from the foreign deposit interest you may get a credit for the foreign tax against the Irish tax liability on that income. This depends on the rules of our Double Taxation Agreement, if any, with the foreign country concerned.
Our Deposit Interest Recording System
This facility allows you to make a record of all your deposit accounts and the amount of interest earned for each tax year. This record must be maintained for a period of 4 years in case it is ever required by the Revenue for inspection.