Dividends from Abroad
Dividends paid out of trading profits from abroad are subject to 12.5 % rate where the company concerned is resident in the EU or a country with which the state has a tax treaty or a convention on mutual administrative assistance in tax matters or where it is quoted. Provided that the dividend is derived from trading profits either incurred by the paying company received out of trading of the company in the EU or a tax treaty et cetera country
Portfolio investors who are those holding less than 5% of the share and voting capital of the company are deemed to have received a dividend from trading profits so that where there is a company they are taxed at 12.5% . Where the company deals in shares the dividend may be trading income of the investor. Subject to the above, foreign dividends are subject to the general investment rate of 25%.
A credit may be allowed for foreign tax paid in respect of corporation tax on the dividend. The pooling of excess foreign tax credits applies to dividends from companies in which there is at least a 5% shareholding. Excess credits may be carried forward for offset as required
There is a further credit for foreign tax where the credit on a dividend from an EU or EEA tax treaty state is less than the amount computed by reference to the nominal rate of tax in the country concerned. It may be based on the actual nominal rate in the circumstances.
There is an exemption from Irish capital gains tax for Irish resident companies and disposals of qualifying shareholdings subject to conditions. The company in which the investment is made must be tax resident in Ireland the EU or in a state with which Ireland has a double taxation treaty. The company disposing of the interest must hold at least 5% of the interest in the company concerned for a requisite period
The business of the company in which the investment is made or the business of the investing company and companies in which it holds a 5% interest must be wholly or mainly trading companies.