Taxation & Savings

Annual dividends are subject to taxation. Each member is obliged to declare the dividend received from the credit union to the Revenue Commissioners. From 1st January 2009, financial institutions including credit unions are obliged to report to the Revenue, dividend and deposit interest payments in excess of €635 paid on each account.

In relation to the taxation of dividends there are a number of options available as follows:

Regular share account

Under this option, members can have their dividend paid out without deduction of DIRT. The member is obliged by law to declare the dividend to the Revenue Commissioners. The amount of dividend must be included in the member’s annual tax return to the revenue.

Special share account

A member can opt for a special share account where the dividend payment annually will be liable for DIRT at the prevailing rate. DIRT will be deducted by the credit union before the dividend is credited to the member’s account. This will fully satisfy all tax liabilities of the member for that dividend, and the member does not have to include that income in his/her tax return.

Medium Term Share Account

Savings must be left on deposit for 3 years and may earn a dividend of €480 per annum tax- free; DIRT will be applied on any dividend paid in excess of this figure

Long Term Share Account

Savings must be left on deposit for 5 years and may earn a dividend of €635 per annum tax-free; DIRT will be applied on any dividend paid in excess of this figure.

Savings must be left on deposit for 5 years and may earn a dividend of €635 per annum tax-free; DIRT will be applied on any dividend paid in excess of this figure.

The dividend from either account can be withdrawn within one year of payment butno other withdrawal is permitted without a payment of DIRT on the dividend(s) earned. A member who reaches age 60 during the term of the account may make a once off withdrawal (no upper limit) without penalty.

In March each year the credit union is obliged to submit, to the Revenue Commissioners, a listing of new Medium and Long Term Share Accounts opened in the previous year.