If you have any non-PAYE income in Ireland you will need to get used to filing taxes each year. This can seem daunting at first but once you take the time to do it once, it becomes much easier the second year AND you save accountancy fees.

Step 1: Determine if you need to sign up for ROS

PAYE earners

From Revenue guidance, it seems you should be able to report non-PAYE additional income through MyAccount under Review Your Tax -> Income tax return.

You should only need to file a form 11 through ROS if you have a taxable non-PAYE income of 5,000€ or more.

Another reader mentioned their experience was that there was no set place to enter ETF income on the MyAccount filing. They were told by Revenue to calculate what was owed, make a payment and then submit a note to let them know what the payment was for. Read step 2-3 for more info on when taxes are due and where to get your base figures.

For dividends simply multiply the dividends paid out in a given year by .41 to get the exit taxes due on them. This is the amount you’ll pay to Revenue.

For gains and deemed disposals see sections below for more details as these get a bit trickier and need some additional calculations. I’ve made a calculator available for these in my member’s area if you are selling ETFs and need to calculate what to pay revenue.

Self assessed/Form 11

If you are not already registered for Income tax you may need to login to your MyAccount first and go to Tax Registrations in the Manage my Record section.

Once you are registered for Income tax then you need to sign up for a ROS account.

Apply for your ROS access number, select individual, income tax and enter your PPS number.

The help text on Revenue is a bit confusing where it says if you have PAYE and LPT only, then you should sign up for MyAccount instead. If you have any non-PAYE income from any investments (rental income, rent a room scheme, stocks, ETFs etc), you will need a ROS account to file your non PAYE taxes annually.

When the sign up form asks for your registered tax number this will be your PPS number.

Enter your contact details on the next page and wait for your RAN in the post. Once received you can complete the process of setting up your ROS account by setting up your digital certificate on your personal computer. You will only be able to login to ROS from the computer you have this certificate installed on.

Step 2: Know when taxes are due

You need to file taxes for ETFs when:

• You buy ETFs (no taxes due, just need to inform Revenue of the purchase)
• You receive dividends from your ETFs (taxes due)
• You have owned your ETFs for 8 years (taxes due as deemed disposal)
• You sell your ETFs (taxes MAY be due if you had a gain, losses or nil payments also must be filed, you also can claim back a credit for any deemed disposals you have paid at this time)

Taxes on ETFs must be PAID (if taxes due) and FILED by October 31st, the year following the event (as per list above)

Step 3: Download tax documents from brokerage

In January/February, your broker should have some annual tax reports breaking down all the details you require for filing your return. Degiro includes your gains and dividends broken down by source and also all transactions from the year.

For example:

Dividends

This is how dividends are listed in Degiro’s annual tax report.

Purchases

This is how purchases are listed in Degiro’s annual tax report. This shows all the information you need to file your tax return and track your purchase price and costs for exit tax calculations when you actually sell or need to file deemed disposals.

Step 4: Enter the information into ROS

Log into your ROS account and go to File a return -> Income Tax -> Form 11/Form 12 -> File a return

Complete the information on the next few screens until you open up your Form 11/Form 12

You need to complete the Personal Details tab before you can access any of the other tabs. Once complete, if you only have ETFs to file, you can go straight to the Foreign Income tab.

When trying to find where to input information it’s very useful to refer to the paper/PDF form and guide from revenue. I click on control+F to bring up the search function in the browser and search for specific terms I am looking for help with. This helped me to find where to input the information.

The only place I could find to enter details with a 41% tax rate was under Foreign Income Offshore Funds.

The online form doesn’t have the numbering on the form but you can find the equivalent space to input this information.

Purchases

I filed purchases under section 322 (e), (f), (g) and (h), in the online form you can add more than one.

You need to log EVERY purchase of ETFs through the year on your tax return so this may influence your purchase strategy. If you want a portfolio of 4 ETFs and you purchase 4 ETFs each month, you will have 48 entries to make. The better approach might be to purchase 1 ETF each month, spreading your 4 ETFs over the year, limiting your purchases to 12. This also reduces purchase costs as Degiro charges a flat fee of 2€/ETF trade saving you 72€ in trade fees/year.

Dividends

If you have distributing ETFs that pay dividends out, you can get the figure from your broker tax report and input it in 322(a)

If you have accumulating ETFs, I believe the taxes on these get paid out on sale or deemed disposal only (whichever comes first).

Gains

If you have sold ETFs with a gain (where the difference between your sale price and purchase price is above zero), you input the gain in 322 (c).

This makes it more like a data entry exercise as ROS does all the calculations for you.

Deemed Disposal

I haven’t had to do this yet myself and do not have a definite answer on how it works but here is my understanding.

• In year 1 you buy an ETF, in October of year 9 you file and pay taxes on any gains on the purchases you made in year 1 (as per their value in year 8)
• In year 2 you buy an ETF, in October of year 10 you file and pay taxes on any gains on the purchases made in year 2 (as per their value in year 9)
• Every year after year 8 requires filing and paying deemed disposal in a laddered first in first out (FIFO) approach.

Example:

• You buy an ETF in 2020 worth 100€, in 2028 it is worth 200€
• By October of 2029, you need to file and pay the taxes due as if you had sold the ETF you bought in 2020 (deemed disposal).
• 200€-100€ =100€* 41% = 41€ due
• In 2021 you bought another ETF worth 120€, in 2029 it’s worth 220€
• By October of 2030, you need to file and pay the taxes due as if you had sold the ETF you bought in 2021 (deemed disposal).
• 220€-120€=100€ *41% = 41€ due
• In 2031 you ACTUALLY sell the ETFs you bought in 2020 and 2021, they are now worth 205€ and 225€
• Your ACTUAL gain is:
• sale (205+225=430) – purchase (100+120=220) * 41% = 86.10€ – deemed disposals already paid (82€) = 4.10€ due.

If you’re buying and selling on different dates, I think ETFs work the same as stocks in that they operate on a first in first out basis (FIFO), and in this case, you’d need to keep track of all of these purchases and sales in a spreadsheet. I have developed a tracker for this which is available in my paid member’s area. The subscription cost will more than cover the cost of your time should you want to build this calculator yourself (trust me).

This spreadsheet helps to track deemed disposals as well as calculate exit taxes due on actual sale using the FIFO method, taking into account any deemed disposals you can use as a credit.

Screenshots below.

Note: ETFs purchased through financial advisors are called Unit linked funds and their deemed disposal works differently under what is called a gross roll up scheme, in that in Year 9, you pay taxes on ALL the gains you made from year 1-8. In year 16 you pay taxes on ALL gains you made from year 9-16. I have not found a definitive answer as to how ETFs bought as an individual investor are taxed but from all my digging I think my first example is correct, though happy to be corrected. I must get around to emailing Revenue on it to get a clear answer.

Step 5: File your return and make payment

Final steps for submitting the return and making the payment can be found here. 

I hope this demystifies some of the administration and tax filing questions some of you may have had. I certainly had to dig through online forums to find some of these answers as it is not clearly defined on Revenue’s guides.

Screenshots of Deemed Disposal Tacker

And here are some screenshots of my deemed disposal tracker available on my paid member’s area.

Deemed Disposal Tracker Tab

First In First Out Purchase Price for Exit Tax Calculations Tab

Exit tax calculator on sale of ETFs Tab