Tax and Your Credit Union Savings

DIRT and your annual dividend on shares

A dividend is paid on your shares each year. From 2014, dividends on all credit union shares are subject to DIRT tax at the standard rate, regardless of whether they are designated as special shares or as regular shares. The rate of DIRT to apply in 2017 is 39%. This also applies to childrens' accounts.

DIRT and your XMAS/ deposit account

The XMAS savings account is a deposit account rather than a share account. No dividend is payable on these accounts but deposit interest, at a rate of .10%, is payable on 1 November each year. All deposit interest is subject to DIRT at 39%.

DIRT for over 65s and permanently incapacitated people

If you or your spouse is aged over 65 during the year and your total income during the year does not exceed certain levels, currently €36,000 (married combined income) or €18,000 (single/ widowed), you can claim exemption from the deduction of DIRT. You must complete a declaration form (DE1) and give it to the credit union - forms are available from the credit union office or from revenue.ie.

Remember that your total income includes state pensions, work pensions, deposit interest etc. If you total income now exceeds the specified amount, you should revoke any previous declarations sent to the credit union.

Permanently incapacitated people may also claim the exemption if income does not exceed similar levels but the exemption and the forms (DE2) are handled by the local Revenue office.

Reports to the Revenue

Credit unions must report to the Revenue any dividend over €300 paid to a member during the previous year. This is similar to the requirements on banks. Details of new accounts must also be reported.

Taxation of interest rebate

An interest rebate has been paid to borrowers in recent years. There is no tax due on your loan interest rebate. In effect, this is a reduction in the loan interest charged by the credit union during the year.

Tax advice and the Credit Union

The credit union is unable to offer tax advice to its members. The above information is for guidance and describes the tax treatment of members savings and loan rebates as understood by the credit union at the date of publishing (June 2017).

For further information see revenue.ie