Paul Kehoe (Wexford, Fine Gael)
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383.To ask the Minister for Finance to consider reducing tax on savings for retired persons (details supplied); and if he will make a statement on the matter.[35835/24]

Jack Chambers (Dublin West, Fianna Fail)
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I am advised by Revenue that the amount of income tax that an Irish tax resident individual must pay on income depends on a number of factors.

In general, an individual will be charged to tax at the standard rate (20%) up to what is known as the standard rate cut off point. The standard rate cut off point for 2024 is €42,000 per individual. Any income earned in excess of that is charged to tax at 40%. USC and PRSI will also generally apply. Further information on these rates and bands is available on the Revenue website at: revenue.ie/en/jobs-and-pensions/calculating-your-income-tax/index.aspx. There are certain limited types of income which are not taxed in this manner and deposit interest is one of those sources.

Also of relevance to a retired individual is an exemption from income tax which can apply if an individual, or that individual’s spouse or civil partner, is aged 65 or older and the annual exemption limit applies. The annual exemption limits apply where the individual’s total income (including interest income) is below €18,000 in the case of a single person or the couple’s total income is below €36,000 in the case of a married couple or civil partnership. Further information on this exemption is available on the Revenue website at revenue.ie/en/personal-tax-credits-reliefs-and-exemptions/marital-and-civil-status/exemption-and-marginal-relief/index.aspx. This exemption applies to deposit interest as well as income from other sources.

How deposit interest is taxed (where the age exemption does not apply) depends on the source of the deposit interest.

• Irish sourced deposit interest: Savings with an Irish bank, or other deposit taker such as a credit union or An Post, are generally subject to Deposit Interest Retention Tax (DIRT) at a rate of 33%. Where applicable, DIRT will be deducted by the deposit taker.
• EU-sourced deposit interest: Interest on savings with an EU bank or other deposit taker is generally taxed at the same rate as DIRT (i.e. 33% in respect of interest paid or credited on or after 1 January 2020).
• Non-EU sourced deposit interest: Interest on savings with a non-EU bank or other deposit taker is taxed at the higher of the DIRT rate and the individual’s marginal rate of tax. That is, if the individual is a standard rate (20%) taxpayer, their deposit interest is taxed at the DIRT rate (33%) but if they are a higher rate (40%) taxpayer, their interest will be taxed at 40%.

As with all areas of tax policy, the taxation of savings and investments will be kept under review throughout the annual budgetary process.