Richard Bruton (Dublin North Central, Fine Gael) | Oireachtas source

I move:

(1) THAT section 261A of the Taxes Consolidation Act 1997 (No. 39 of 1997) shall only apply as respects interest paid by a relevant deposit taker in respect of a relevant deposit held in a special term account that is opened before 16 October 2013.

(2) THAT section 267C of the Taxes Consolidation Act 1997 (No. 39 of 1997) shall not apply to dividends paid by a credit union in respect of shares held in a special term share account that is opened on or after 16 October 2013 unless those dividends are paid in respect of shares held in a long term account that was converted from a medium term account that was opened before 16 October 2013.

(3) THAT for the purposes of paragraphs (1) and (2) of this Resolution, “interest”, “relevant deposit taker”, “relevant deposit”, “special term account”, “dividends”, “medium term account”, “long term account” and “special term share account” have the same meaning, respectively, as in Part 8 of the Taxes Consolidation Act 1997.

(4) IT is hereby declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act 1927 (No. 7 of 1927).

Current tax law provides for an exemption for a part of the interest paid on special term accounts offered by banks and special term share accounts offered by credit unions. In the case of a medium term account, where the money is held on deposit for at least three years, the first €480 of interest earned on the account is exempt while, in the case of a deposit held in a long-term account, where the minimum holding period is five years, the exemption limit is €635.

Financial Resolution No. 7 removes these exemptions from special term accounts that are opened on or after 16 October. This is to ensure that such accounts cannot be used to avoid payment of deposit interest retention tax, or DIRT as it is commonly referred to.

See this speech in context