Revenue Note for Guidance

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Revenue Note for Guidance

CHAPTER 3

Government and other public securities: exemptions from tax

Overview

This Chapter provides for the exemption from tax, subject to conditions, of various types of Government securities. The exemption given may be in respect of the interest paid on securities, or on a discount given on the issue of securities, or premiums paid on the redemption of securities, or on the capital represented by the securities.

42 Exemption of interest on savings certificates

Summary

This section provides exemption from income tax in respect of the accumulated interest payable on savings certificates issued by the Minister for Finance. The exemption only applies so long as the amount of such certificates held by a person does not exceed the amount which that person is authorised to hold under regulations made by the Minister for Finance.

The exemption was extended, as and from 4 February 2010, to similar savings products issued by other EU or EEA Governments with which Ireland has a Double Taxation Agreement.

The exemption also extends to similar savings products issued by the Government of the United Kingdom.

In order to qualify for the exemption, the products issued by the EU, EEA Governments with which Ireland has a Double Taxation Agreement or the Government of the United Kingdom must be issued under rules which correspond to the rules that govern savings certificates issued by the Minister for Finance.

Details

Definitions

(1) “EEA Agreement” means the Agreement on the European Economic Area signed in Oporto on 2 May 1992 as adjusted by the Protocol signed at Brussels on 17 March 1993;

“EEA State” means a state which is a contracting party to the EEA Agreement. The contracting parties to the EEA Agreement are Norway, Iceland and Liechtenstein as well as all of the EU Member States;

“relevant State” means—

  1. a Member State of the European Union, or
  2. not being such a Member State, an EEA State which is a territory with the government of which arrangements having the force of law by virtue of section 826(1) have been made.

A “relevant State” also includes the United Kingdom.

Effectively, this definition encompasses all EU, EEA States except Liechtenstein since we have a double tax agreement with all of the EU and EEA countries except Liechtenstein and the United Kingdom.

(2) The section provides that the accumulated interest payable on savings certificates issued by the Minister for Finance or savings certificates or other similar securities issued by the Government of a relevant State will be exempt from tax where they are issued pursuant to rules and conditions which correspond to the rules and conditions contained in regulations issued by the Minister for Finance.

The exemption applies so long as the amount of such savings products held by a person does not exceed the amount which that person is authorised to hold under regulations made by the Minister for Finance.

Relevant Date: Finance Act 2021