Written answer
Tax Code
The Tánaiste said a €5,000 DIRT-free savings threshold would require unavailable data to cost, while existing exemptions remain under review.
366. Deputy Emer Currie asked the Tánaiste and Minister for Finance if he will consider introducing a threshold of €5,000 of savings before deposit interest retention tax is paid in light of the introduction of the personal investment accounts; the cost; and if he will make a statement on the matter. [64156/26]
Comment on this
The Deputy will be aware that Deposit Interest Retention Tax (DIRT) is a withholding tax that is deducted by Irish financial institutions on deposit interest paid or credited on the deposits of Irish residents.
Since 1 January 2020, the DIRT rate is 33%. DIRT is a final liability tax. This means that an individual has no further tax liability in respect of the deposit interest earned.
Deposit interest is specifically excluded from the Universal Social Charge. Individuals may however have a liability to Pay Related Social Insurance (PRSI) in certain circumstances.
There are various exemptions from the obligation to deduct DIRT on deposit interest paid or credited by financial institutions. For instance, interest is exempted from DIRT where an account is held by an individual, or their spouse or civil partner, aged 65 years or older, and their total income in a year (including interest earned) is below the relevant income tax annual age exemption limit.
The annual age exemption limits are €18,000 in the case of a single person and €36,000 in the case of a married couple or civil partnership. The relevant income thresholds may be increased further if the individual has a qualifying child.
I am advised by Revenue that information on interest and associated DIRT payments is reported to Revenue at the aggregate level by each financial institution, that is, the total amount of interest earned and total amount of DIRT payments. Information on the individual levels of savings amounts that gave rise to these aggregate DIRT payments is not reported to Revenue. Therefore, the required information is not available on Revenue records that would allow for an estimate of the cost of the Deputy’s proposal.
As with all taxes, DIRT is subject to ongoing review. This involves the consideration and assessment of the rate of DIRT and the relevant exemptions from DIRT as part of the annual Budget and Finance Bill process, as well as the wider tax policy context.