In Ireland the government charge a tax on the interest you receive on savings accounts in Ireland. This tax is known as Deposit Interest Retention Tax or DIRT for short.
Since January 1st 2020 the rate of DIRT is 33%
Meanwhile, the exit tax on investments such as equity funds and ETF’s remains at a higher rate of 41% and shows no sign of being changed .
Taxation of Shares in Ireland
Profits from the sale of shares are not subject to DIRT. Instead – gains on shares are subject to 33% Capital Gains Tax (CGT). But – the first €1,270 of taxable gains in a tax year are exempt from CGT .
DIRT is deducted automatically by banks from the interest paid on all deposit accounts held by Irish-residents.
Most State Savings accounts are free from DIRT . See our page on the Best Interest Rates on Savings to find out more.
Back in 2002 the rate of DIRT was just 20%. It was then increased over the following years up to 41% in Jan 2014 in an attempt to try and encourage people to spend rather than save money.
Budget 2017 announced the first reduction in DIRT since it was introduced – and from Jan 1st 2017 it was 39%.
History of DIRT Rates in Ireland
- 35% from Jan 2019 to Dec 2019
- 37% from Jan 2018 to Dec 2018
- 39% from Jan 2017 to Dec 2017
- 41% from 1st January 2014 to 31st December 2016
- 33% from 1st January 2013 to the 31st December 2013
- 30% from the period 1st January 2012 to the 31st December 2012
- 27% from 1st January 2011 to the 31st December 2011
- 25% from 8th April 2009 to the 31st December 2010
- 23% from 1st January 2009 to the 7th April 2009
- 20% from 1st Janury 2002 to the 31st December 2008.
Exemptions from DIRT
You can receive interest without paying DIRT if you, your spouse or civil partner are:
- 65 years of age or over and your total income for the year, including the interest, must be below the annual exemption limit. (Currenty €18k per person) OR
- permanently incapacitated due to a physical or mental disability.
PRSI on Deposit Interest
If you earn interest of more than €5000 in a year – then you could be also liable for 4% PRSI . This would have to declared and paid to Revenue – it is not deducted by the banks. More details on PRSI here