The Irish Revenue authorities have clarified procedures under the EU Savings Directive to enable taxpayers to receive interest without deduction of withholding tax from paying agents in certain territories.

The Revenue statement reads:

Council Directive 2003/48/EC of 3 June 2003 seeks to ensure that individuals resident in an EU Member State who receive interest income from another Member State are taxed in the Member State in which they are resident for tax purposes. To this end, payments of interest made on or after 1 July 2005 are either (1) reportable by paying agents in the EU to the tax authorities in the paying agents home territory or (2) subject to withholding tax in those territories which have opted to apply withholding tax rather than report the payment.

Austria, Belgium and Luxembourg have opted to apply the withholding tax instead of exchanging information. Some associated and dependent territories, namely, Netherlands Antilles, Jersey, Guernsey, Isle of Man, British Virgin Islands and Turks and Caicos Islands and certain third countries, namely, Andorra, Liechtenstein, Monaco, San Marino and Switzerland will also apply a withholding tax. In this regard, the Directive provides for a procedure to allow Irish residents, who receive interest payments from those territories named above, to apply to their tax districts for a Certificate for Non-Deduction of Withholding Tax.

In order to obtain such a certificate from her/his tax office, an individual must supply the following information:

• Full name and address
• PPSN
• Name and address of paying agent
• Account number of the investment, or if no account number is available, other information which will identify the investment
• The period for which the certificate is required (this cannot exceed three years).

A statement^* from the paying agent verifying these details may be required.

An individual not in possession of a Certificate for Non-Deduction of Withholding Tax in any given year, may claim a credit for the tax withheld by way of an end of year review on her/his annual tax return form. A statement* from the paying agent must support the claim and include the following information:

• The name and address of the paying agent
• The name and address of the account holder
• The date of the interest payment
• The amount of the interest payment
• The amount of the tax deducted.

* There is no requirement for the taxpayer to submit the statement with the application for the certificate or with the claim for credit. However, the taxpayer must produce it if and when required to do so by her/his Inspector of Taxes.