Dividends and Distributions

A company making a distribution must within 14 days of the end of the month make a return to Revenue containing details of the recipient, the amount of the distribution details of the tax withheld together with payment of the tax

Dividend withholding tax applies to dividends and distributions made by Irish companies subject to exemptions. There is an exemption where the dividend distribution is made to an Irish resident company which holds more than 50% of the shares in the company or a non-resident company eligible under the parent-subsidiary directive (requiring a 5% or greater shareholding

There are also exemptions for

• Non-resident companies resident in a tax treaty country or another EU member state provided they are not controlled by Irish resident persons
• Irish resident companies
• Non-resident companies ultimately controlled by residents of another EU state or tax treaty country
• Non-resident companies whose principal class of shares are traded on a recognised stock exchange in another EU state treaty country or another recognised stock exchange and 75% subsidiaries
• non-resident companies owned by two or more companies the principal class which is traded on a recognised stock exchange as above
• Individuals resident in another EU state or tax treaty country
• Certain exempt entities such as pension funds collective investment funds retirement funds employees share ownership trust

Interest and Royalties

Unless covered by exceptions, payments of annual interest are subject to withholding tax (20%). Interest paid by a company to companies resident in another EU member state tax treaty country are not usually subject to interest withholding tax

Interest on payments between associated companies by an Irish resident company to another is not subject to withholding tax

Royalties are not generally subject withholding tax. Patents royalties and certain other annual payments are subject to 20% withholding tax.

Patents royalties paid by companies which are resident in another EU state tax country are not subject to withholding tax. The EU interest and royalties directive provides exemptions between group companies

Other

There is withholding tax when Irish real property land or minerals or unquoted shares which derive most of their value from such assets or the goodwill of the trade carried on in Ireland are disposed of. A withholding tax of 15% arises unless a clearance certificate is issued. A certificate may be applied for and obtained on the grounds that the seller is Irish tax resident the capital gains tax is paid or provided for.

Income tax at the standard rate is deducted from payments for professional services provided to certain government local government and semi-state bodies. Credit is granted against the provider’s ultimate income or corporation tax liability for the relevant period.