Robert Troy (Longford-Westmeath, Fianna Fail)
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224. To ask the Minister for Finance if he will abolish the deposit interest retention tax on children's saving accounts. [24066/23]

Michael McGrath (Cork South Central, Fianna Fail)
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Section 257 of the Taxes Consolidation Act 1997 requires all deposit takers to deduct Deposit Interest Retention Tax (DIRT) from payments of interest made to an account unless the account qualifies as an exempt account. Information on the accounts to which a DIRT exemption may apply is contained in Tax and Duty Manual Part 08-04-08, which is available on the Revenue website at www.revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-08/08-04-08.pdf.

There is no specific exemption in the case of interest paid on deposit accounts held by children. Many children’s savings accounts are opened either in the name of an adult, with the child’s interest noted, or in the name of both an adult and the child. This means that a DIRT exemption for children’s savings accounts would be complex to design.

Review of DIRT

The Commission on Taxation and Welfare, in its report “Foundations for the Future” published on 14 September 2022, recommended that a working group is established to review and propose changes to the taxation of investment products, which would include funds, life assurance investment products, exchange traded funds and other savings products, with the goals of simplification and harmonisation where possible. Acting on the recommendation of the Commission on Taxation and Welfare, on 6 April 2023, I published the Terms of Reference for the Department of Finance to conduct a review of Ireland’s funds sector and produce a report ‘Funds Sector 2030: A Framework for Open, Resilient & Developing Markets’, which includes a review of the application of DIRT.

As part of this review the Department will hold a Public Consultation and anyone who wishes to make a submission in relation to DIRT, or any of the other matters being considered by the review, are welcome to do so.