Know your tax obligations if you held on to Verizon stock
Published 16/03/2014 | 02:30
IF you're an Irish Vodafone shareholder who has decided to hold on to your Verizon shares under the latest deal, be sure to understand your tax obligations – particularly on any dividends you receive on those shares in the future.
"Any dividend paid by Verizon, being a US firm, would be US income," say the Revenue Commissioners . "Under the terms of the Ireland-US Double Taxation Treaty, such a dividend would be subject to 15 per cent income tax in the United States."
Assuming you are resident in Ireland for tax purposes, you would also have to pay income tax in Ireland on the dividend – at your marginal rate of tax.
"However, a credit would be given for the 15 per cent tax deducted in the US so as to avoid double taxation," added the Revenue spokeswoman.
If on the other hand you decide to sell your Verizon shares immediately, and you have already opted to receive your payout under the deal (that is your cash payment and your Verizon shares) as capital rather than income, you won't have to pay any capital gains tax when you sell your Verizon shares.
This applies to Vodafone shareholders who acquired their Vodafone shares in exchange for Eircom shares in 2001.
If you opted or are automatically receiving your payout as income, you will receive the sum of the cash payment and the value of the Verizon shares in the form of a dividend and you will therefore have to pay income tax, PRSI and the universal social charge on that dividend, according to Revenue.
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