Taxation

In the past any person joining a credit union were under the assumption that credit unions were tax havens. However this was never and still is not the case. Any member who receives/received a dividend payment was obliged to inform the ‘Revenue Commissioners’ in their annual returns. Within the last few years, the taxation net has been tightened by the Government and therefore all members of credit unions were written to, explaining the situation.

We at Muintir Clanna Caoilte Credit Union Ltd offer our members two options in relation to the tax issue. The first option is to have your dividend paid directly into your account without any deductions and then you the member are responsible for informing the revenue. The second option is to have your dividend paid into your account net of D.I.R.T. (Deposit Interest Retention Tax). This option gives the credit union the authority to pay your proportion of D.I.R.T. directly to the revenue on your behalf. By paying the revenue this way you the member are not liable for any further payments. The current rate of D.I.R.T. for credit unions is 25% even if your personal tax bracket is 42%. These figures are current as at December 2009. The D.I.R.T. element is forwarded to the revenue as soon as possible following the Credit Union’s Annual General Meeting, where the dividend for the year is declared and agreed upon. If a member of the credit has any queries in relation to the taxing of their dividends, then they are advised to consult with either a ‘Tax Consultant’ or the ‘Revenue’.

You can claim an exemption from the deduction of D.I.R.T. if,

• you or your spouse are aged 65 or over during the year, and
• your total income (this is your gross income from all sources, e.g. old age pension, deposit interest etc. ) for the year does not exceed the following amounts:  Single or Widowed  €19,000 or Married Couple (Combined Income ) €38,000

These exemption limits are increased by €575 for each of the first two dependent children and by €830 for each subsequent dependent child.  These amounts are liable to change.  If you qualify under these criteria you can apply to have deposit interest, on funds of which you are the beneficial owner, paid to you without the deduction of D.I.R.T.  The application form to have deposit interest paid without deduction of DIRT where the applicant and/or spouse is aged 65 or over are available from the credit union offices.

Joint accounts only qualify for the exemption where the two account holders are husband and wife.

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