Dividend withholding tax: what the 25% covers and what you still owe

Irish companies keep back 25% of dividends as withholding tax. It counts towards your tax, but dividends are taxed at your top rate plus USC and PRSI.

When an Irish company pays you a dividend, it keeps back 25% as dividend withholding tax (DWT) and pays it to Revenue. What reaches your account is the other 75%. For most people that is not the end of the tax.

How the dividend is taxed

You are taxed on the full dividend, before DWT, as part of your income for the year. That means income tax at your top rate, plus USC and PRSI. The DWT is then credited against the bill. If the DWT is more than the tax due on the dividend, Revenue refunds the difference.

A €2,000 dividend from an Irish company arrives as €1,500.00, with €500.00 kept back. In 2026:

The PRSI figure is the 2026 average, as the rate rose on 1 October. PRSI is due to rise again on 1 October 2027, so the 2027 figure for a higher-rate taxpayer is 52.3875%.

Declaring dividends

Dividends must go on a tax return even though DWT was taken. If your income outside PAYE, dividends included, is under €5,000 a year, declare it on Form 12 in myAccount. Above that, you register for self-assessment and file Form 11 on ROS. Keep the dividend statements: they show the full amount and the DWT.

Dividends from abroad

• UK companies. You are taxed on the amount you actually receive, converted to euro. There is no credit for the UK tax credit.
• Other countries. You are taxed on the full dividend. Foreign tax deducted may be reduced, or credited against Irish tax, under a double taxation agreement.
• Encashment tax. If an Irish bank or paying agent deducts encashment tax on a foreign dividend, you get a credit for it.

Who doesn't pay DWT

Companies, pension schemes, charities, administrators of Personal Retirement Savings Accounts and some others are ‘excluded persons’ and can claim exemption with a declaration. A non-resident living in another EU or European Economic Area country, or a country with a tax treaty with Ireland, can claim exemption. They use Form V2A, certified by their own tax authority. It lasts until 31 December of the fifth year after it is issued.

To see how dividend tax adds up over years of holding shares, use the share investment calculator. To compare it with a fund, use ETF or shares.

Work it out

• Share investment growth, after Irish tax →
• ETFs or direct shares: which leaves you more? →

Sources

• Revenue: Dividend income (25% DWT, taxed at your marginal rate with USC and PRSI) (checked 25/10/2026)
• Revenue: Dividend Withholding Tax (25%) (checked 16/10/2026)
• Revenue: Tax rates, bands and reliefs (checked 25/10/2026)

General information, not tax advice. HeyPenny is not a tax agent.