In Ireland the government charge a tax on the interest you receive on savings sccounts. This tax is known as Deposit Interest Retention Tax or DIRT for short.
In 2019 DIRT was 35% and since January 1st 2020 it 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 .
But any profits from the sale of individual shares are not subject to DIRT Gains on shares are subject to 33% Capital Gains Tax (CGT). Plus – the first €1,270 of taxable gains in a tax year are exempt from CGT .
More about Buying Shares in Ireland
DIRT is deducted automatically from the interest paid on all deposit accounts held by Irish-residents.
Most State Savings account 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