Budget 2020 new Dividend Withholding Tax system

Oct 14, 2019

Revenue has opened a public consultation on how the new dividend withholding tax (DWT) regime will work. A new regime was announced by the Minister as part of Budget 2020.  This new regime is due to see DWT move to a real time reporting system from 1 January 2021.  An increase in the rate to 25 percent is due to take effect from 1 January 2020. 

According to Revenue, the objective of this new system is to ensure individuals pay the correct amount of income tax and USC on dividend income received by them at the right time. Moving to real-time reporting will reduce instances where overpayments and underpayments of tax occur and ultimately reduce the administrative cost associated with both collecting and refunding income tax and USC. 

It is expected that Revenue will make available a personal withholding rate to allow companies who pay dividends directly to individuals to calculate the dividend withholding tax to be deducted for each individual. The company will report in real-time to Revenue for each individual the gross dividend paid and the associated dividend tax withheld.

The public consultation process will run until 12 December 2019.  Further information is available on the Revenue website at Dividend Withholding Tax (DWT) real-time reporting.

We will engage with Revenue on the development of the new regime through the TALC process and other forums.  We will also make a submission under the consultation.