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Taxes and charges

What taxes apply to investments?

When you invest, you may have to pay tax on any profit you make, and the type of tax depends on how the investment is structured, where it is based and whether any exemptions apply. Common taxes on Irish investments include Capital Gains Tax on profits from selling certain assets, exit tax on gains from life insurance and some investment funds, Dividend Withholding Tax on dividends from Irish companies and Deposit Interest Retention Tax (DIRT) on interest from savings and tracker bonds. In some cases, profits may also be liable for income tax, USC or PRSI.

Taxes and charges can significantly reduce your returns, so you should always be given clear written information about what applies before you invest and consider getting tax or financial advice if you are unsure.

Top tip

You should be given a written document outlining the taxes you’ll be liable to pay before you invest. If you’re investing without advice, consider speaking to a tax expert about your requirements.

Main types of investment taxes

Below is a list of common investment taxes that apply to Irish investments. Before you invest, talk to your financial adviser about exactly what taxes apply to the investment, when they have to be paid and if you can apply for any tax relief or exemptions. You can also get more information on Revenue.

Capital Gains Tax (CGT) rates: CGT applies when you make a profit from selling certain assets. Here’s how the rates work:

Most gains: Standard rate is 33%

Venture capital funds: Venture capital is money invested in start-ups or small businesses.

  • Companies: 12.5%
  • Individuals and partnerships: 15%
Foreign life policies and foreign investment products: Gains taxed at 40%

Exit Tax: Tax on profits from plans with a life insurance company. Only paid if you make a profit. Current rate: 38%.

Dividend Withholding Tax: Tax on dividends paid by Irish companies to shareholders. Current rate: 25%.

Deposit Interest Retention Tax (DIRT): Tax on interest from deposit accounts or tracker bonds. Current rate: 33%.

In some cases, profits may also be subject to USC, PRSI or income tax.

Top tip

Ask for an information document listing all fees and charges before you invest.

Main types of investment charges

  • Entry charges: One-off costs, usually a percentage of the amount you invest.
  • Exit charges: One-off costs when you end your investment, usually a percentage of the fund value.
  • Early encashment fee: Penalty for cashing in your investment before it matures.
  • Commission: Payment to a financial adviser from the business on whose behalf they sell products. Learn more about how much financial advice can cost.
  • Ongoing charges: Regular fees for managing and administering the fund:
  1. Fund management/administration charges: Annual fees for record-keeping, fund valuation & ongoing advice.
  2. Performance fees: Charged if the investment makes a profit, usually as a percentage of the profit.
Top tip

Advisers who describe their service as independent financial advice must not accept any fees, commissions or benefits from the companies whose products they recommend. This ensures their advice is unbiased and in your best interest.

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