People with shares abroad 'due tax return'
Published 23/04/2011 | 05:00
AS many as 200,000 people could be entitled to claim an average of €500 due on unclaimed dividend withholding tax rebates for shares held in companies outside the State, a tax expert has calculated.
A deadline for claims is approaching in a number of countries, taxation expert Fidelma McGuirk, of Taxback.com, said.
She has estimated that €15bn is paid out to Irish entities in dividends every year from overseas companies.
Most of this goes to companies in the Irish Financial Services Centre (IFSC) in Dublin and to pension funds.
But there may be up to 200,000 people also benefiting from dividends from companies based outside the State.
Many of these people work for foreign-owned multinationals with operations here. Share schemes are common in foreign-owned companies.
Ms McGuirk explained: "When income is generated across borders, the tax authority in the country of issue imposes a statutory rate of tax to the income of non-resident investors. This means that clients' overseas investments are subject to significant tax which will negatively affect the overall value of their investment portfolio."
Withholding tax rates can be as high as 35pc in Switzerland and 30pc in the US.
But given that Ireland has tax treaties with these countries, a large percentage of the withholding tax can be reclaimed. There is a potential to reclaim 15pc of withholding tax imposed on US company dividends. "Most people here are not aware of the entitlements on this little-known tax. Employees who are part of employee share and dividends schemes could have been missing out for years and may now be well positioned for a financial windfall," Ms McGuirk said.
"Because it was such a cumbersome process, it has proved inefficient to ask an accountant to spend a couple of days reclaiming €500.
"We have built a specialist efficient platform to reclaim this tax for thousands of people at much lower cost, typically about €100 per person."