Tax and Duty Manual Schedule 2.1 – Encashment Tax, is updated to reflect the rate increase to encashment tax from 20 percent to 25 percent as per Finance Act 2020 (FA 2020). The TDM also covers the encashment tax exemption for Irish tax resident companies and sets out the withdrawal of the exemption to deduct encashment tax previously in place for British commercial dividends.

Encashment Tax is a withholding tax deducted from income from public revenue dividends and dividends of a non-resident body. Revenue can relieve a chargeable person of the obligation to deduct encashment tax on foreign dividends payable to Irish residents.

See eBrief No. 022/21 for more details of FA 2020 changes.