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.
The rate of DIRT in 2023 is 33%
It has been this rate Since January 1st 2020
Banks deduct DIRT automatically from the interest paid on all deposit accounts held by Irish-residents.
Most State Savings accounts are free from DIRT .
DIRT on Savings Held Outside Ireland
If you have a deposit account with a financial institution outside Ireland – you must include any deposit interest you received in your tax return. You will need to enter the total interest payment before the deduction of DIRT.
The type of tax return you must complete depends on whether you are registered for self-assessment or a Pay As You Earn (PAYE) worker.
- If you are self-assessed .
- You should include any DIRT on your Form 11 in Section F ‘Income from fees, covenants, distributions’. Use Revenue Online Service (ROS) to submit your Form 11.
- If you are a PAYE taxpayer
- You should include any DIRT on your Form 12 under ‘Irish Deposit Interest’. You can submit your Form 12 online through PAYE Services on Revenue.ie. This only applies if your taxable non-PAYE income (including income subject to DIRT) is less than €5,000.
- If you have taxable non-PAYE income of €5,000 or more, you must register for self-assessment and file a Form 11 for that year.
If you receive interest from an account in another EU Member State, you must pay the current DIRT rate on the interest income. You must include the details of this on your annual tax return. (The income could be subject to a higher rate of 40% tax if it is not returned on time.)
Deposit interest from non-EU countries will be taxed at the current DIRT rate if you are a standard rate taxpayer and have made a timely return.
If you are a higher-rate taxpayer or you have not made a timely return, a DIRT rate of 40% will apply on non EU deposits.
See our page on the Best Interest Rates on Savings
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 .
More information about CGT on Shares in Ireland
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.
Tax on Share Dividends in Ireland
More about How and Where to Buy Shares in Ireland
Rate History of Tax on Savings Interest in Ireland
Back in 2002 the rate of DIRT was just 20%. The government increased DIRT over the following years up to 41% in an attempt to try and encourage people to spend rather than save money.
As part of Budget 2017 ,the first reduction in DIRT since it was introduced was announced. (From Jan 1st 2017 it was 39%.)
DIRT Rates since 2002
- The current DIRT rate is 33% since Jan 2020
- 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 January 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, is below the annual exemption limit. (Currently €18k per person)
- 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 be declared and paid to Revenue – it is not deducted by the banks. More details on PRSI here