New online service to help recover tax paid on share dividends abroad

Irish tax refund specialists Taxback. com have introduced an online service to help people recover tax withheld on share dividends in other countries.

*Irish people investing abroad often lose up to a fifth of their dividends because they fail to claim back some of the tax deducted at source in the country where the company in which they have invested is listed.

Taxback.com’s new DiviTax platform is designed to help people claim back money they are owed in a straightforward fashion.

Confusion

“Millions of euro go unclaimed every year in Dividend Withholding Tax (DWT),” says

Elaine Marino

, senior vice-president of Taxback.com, noting that statutory withholding tax rates range from 10-35 per cent.

She said many investors were not aware when and how much they could reclaim. The process for making a claim also varies from country to country.

“Most retail investors do not file cross-border DWT reclaim applications, which means that money is left on the table,” said Ms Marino, adding that her company had recently recovered €110,000 from the Swiss government on behalf of an Irish property companyTaxback.com says its DiviTax platform will avoid going through a chain of intermediaries, often complex forms or incurring unnecessary cost.

The United States, France, Australia, Sweden and Finland all charge 30 per cent withholding tax, but double taxation agreements with Ireland allow for half of that to be claimed back. of the 25 per cent tax withheld in Canada and Norway, Irish tax residents can also claim back 10 per cent. In Germany the figure is 11.375 per cent of 26.375 per cent and Switzerland, which charges 35 per cent, allows a 20 per cent rebate to Irish tax residents.

With many Irish investors increasingly diversifying portfolios beyond their home market, the ability to reclaim can be financially worthwhile.

Ms Marino cites Switzerland as an example.

“Let’s assume that an Irish-resident individual received a dividend of €1,000 that was subject to 35 per cent dividend withholding tax. This means that a net dividend of €650 was paid to the Irish individual.

“According to the Ireland-Switzerland double tax treaty, a potential tax reclaim entitlement of €200 exists. Given that €650 was initially received from the Swiss dividend-paying company, the €200 tax reclaim increases the investor’s return on investment by 30.76 per cent.”

* This article was edited on July 20th