Minister’s Brief

o non-Life Insurance (3%; there is also a non-tax “Insurance Compensation Levy”
of 2%)
o Life Insurance (1%), introduced in 2009
o Health Insurance (charge is per person insured and varies according to age and
the type of health insurance policy – this levy is transferred directly into the
Risk Equalisation Fund, rather than into the Exchequer)
Main exemptions: Young trained farmer relief and consanguinity relief.
Financial Transactions Tax
Ireland is not part of the group of 10 member States working on proposals, under enhanced
co-operation provisions, to introduce a Financial Transactions Tax (FTT) but we are monitoring
developments.
Deposit Interest Retention Tax (DIRT)
DIRT is deducted from deposit interest paid to the accounts of Irish residents. The basic rate is
41% where interest was paid or credited at least once annually (most bank accounts) and 36%
where it was paid less frequently. The basic rate has increased from 20% in 2008, the
standard rate of income tax at the time. The increases were introduced primarily to generate
additional yield and to encourage spending in the economy to stimulate growth and
employment.
DIRT is a “final liability tax”, i.e. it satisfies the individual’s full liability to Income Tax in respect
of deposit interest. The individual may still be liable to PRSI on the interest. Deposit interest
is not subject to the Universal Social Charge.
Exit taxes; apply to payments and deemed payments from life assurance and funds products,
at the same rate as DIRT.
Main exemptions: Individuals aged 65 and over with total income, including the deposit
interest, below €18,000 for single individuals or €36,000 for married couples/civil partners,
can have interest paid without deduction of DIRT or can apply for a refund of DIRT deducted.
Permanently incapacitated persons whose tax credits exceed any tax payable (including DIRT)
are also exempt. Companies can have bank interest paid without deduction of DIRT, but are
liable to CT on the interest at the CT “passive income” rate of 25%. The Exit Tax rate for
payments to companies is also 25%.
Yield: The yields from DIRT, Life Assurance Exit tax and Investment Fund Exit tax in each of the
years 2010 to 2014 are set out in the table below.
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