Revenue Note for Guidance
This section provides that a company which makes a relevant distribution to an authorised withholding agent, who is to receive the distribution on behalf of another person, must make the distribution without operating DWT. The authorised withholding agent then, effectively, steps into the shoes of the company and must operate the DWT scheme when it pays on the distributions, or amounts representing such distributions, to its clients.
To be an authorised withholding agent, a person must be an intermediary and must —
In addition, the intermediary must —
An authorisation of a person as an authorised withholding agent expires after 7 years subject to renewal of the, or the entering into of a new, authorised withholding agent agreement.
Under an authorised withholding agent agreement, an intermediary must undertake to accept, retain and make available for inspection, all declarations of exemption and notifications made to the intermediary in connection with the DWT scheme. The intermediary must also undertake to exercise a duty of care in relation to the veracity of such declarations and notifications, to operate the DWT scheme, including the making of returns to the Collector-General, correctly and efficiently, to pay to the Collector-General any DWT required to be included in such returns, to provide to Revenue an auditor’s report on the intermediary’s compliance with the agreement for its first year of operation and further such reports on request by Revenue, and to allow for the verification of such compliance by Revenue in any manner considered necessary by Revenue.
Provision is also made for the maintenance by Revenue of a list of authorised withholding agents which can be made available to any person, and for the revocation of an authorisation of a person as an authorised withholding agent.
(1) DWT does not apply where an Irish resident company makes a relevant distribution to an authorised withholding agent for the benefit of a person who is beneficially entitled to the distribution, not being the authorised withholding agent itself. This rule, however, is subject to section 172H which provides that the authorised withholding agent must effectively step into the shoes of the company and operate the DWT scheme when it is paying on the distribution.
(2) There are a number of conditions which must be satisfied if a person is to be an authorised withholding agent. The person must first of all be an intermediary, that is, a person whose trade consists of or includes the receipt, on behalf of other persons, of relevant distributions from Irish resident companies or amounts or other assets representing such distributions from qualifying intermediaries. In addition, the person must be resident in the State or, if not resident in the State, must be resident for tax purposes in another EU country or in a tax treaty country and must carry on through a branch or agency in the State a trade which consists of or includes the receipt, on behalf of other persons, of relevant distributions from a company or companies resident in the State. Moreover, the person must enter into an authorised withholding agent agreement with Revenue, and must be authorised by Revenue as an authorised withholding agent.
(3) An authorised withholding agent agreement is an agreement entered into between Revenue and an intermediary under which the intermediary undertakes certain obligations, namely —
(3A) Revenue may examine, take extracts from, or copies of, documentation made available to Revenue under subsection (3)(b).
(4) Revenue are restricted as to whom they may authorise as an authorised withholding agent. Revenue may only authorise as an authorised withholding agent —
(5) Revenue are required to maintain a list of authorised withholding agents whose authorisations have not been revoked. Notwithstanding their confidentiality and secrecy obligations, Revenue may make available to any person the name and address of any authorised withholding agent.
(6) Revenue are empowered to revoke a person’s authorisation as an authorised withholding agent where Revenue is satisfied that the person has failed to comply with the authorised withholding agent agreement or the DWT scheme in general or that the person is otherwise unsuitable to be an authorised withholding agent. Notice of a revocation must be served in writing by registered post, and the revocation takes effect from the date specified in the notice.
(7) Notice of a revocation of an authorisation as an authorised withholding agent must be published in Iris Oifigiúil.
(8) Without prejudice to subsection (6) which allows Revenue to revoke an intermediary’s authorisation as an authorised withholding agent in certain circumstances, such an authorisation ceases to have effect after 7 years. This, however, does not prevent Revenue and the intermediary from agreeing to renew the authorised withholding agent agreement or to enter into a further such agreement. Nor does it to prevent a further authorisation by Revenue of the intermediary as an authorised withholding agent for the purposes of the DWT scheme
Relevant Date: Finance Act 2019