Dividends received by John in 2020 from his normal credit union share account are:

• A. subject to income tax at 20%.
• B. tax free, as credit unions are considered charities.
• C. subject to DIRT as if they were deposit interest.
• D. exempt from DIRT if the share balance is less than €1,000 throughout 2020.

Answer: (C)

DIRT stands for Deposit Interest Retention Tax, a withholding tax applied at source to deposit-type income. In Ireland, dividends paid on credit union shares are treated the same way as deposit interest for tax purposes. So the dividends John receives from his credit union share account are subject to DIRT, just as if they were interest from a bank or other deposit taker. There isn’t a charity exemption or a balance-based exemption that would remove DIRT—credit unions are not charities, and small balances don’t exempt these dividends from DIRT. The tax is collected at the point of credit union payout.