Crackdown! Tax Liability on Overseas Property

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If you haven’t made any New Years resolution yet, getting your overseas rental tax affairs in order should be one.
Although you might think a nice apartment in the Costa del Sol would earn you a nice income during the winter months and have a place to relax in the summer – think again.

If you rent out your overseas property you are liable to pay income tax on the net profit rent. This liability applies to any overseas property you may have anywhere in the world.

There is no definite figure but it has been approximated that the Irish own around 150,000 to 250,000 properties abroad! And last March the Revenue began a mission of making an example out of their guessed number. Using James Bond tactics the Revenue began studying up on Irish owned properties abroad which then spurred a serious clampdown on tax dodgers.

As well as paying tax to the Irish Government you will also have to pay tax on your rental income to the country where you have your property.  All countries will have different percentages and rules & regulations as to how much tax you will have to pay on your rental income.

Albeit the revenue admits that the tax you pay isn’t that high when you take into account both expenses that you can claim on your rental income & the fact the Ireland has double taxation agreements with about 46 countries. This means that you will be credited for taxes that you pay abroad… so come clean!

To pay tax on your rental income to the Irish Government you need to provide details of any gain by filing a return of income by October 31, following the year. Best advice is to get an accountant or tax advisor to guide you through the maze so as you leave nothing unknown to the taxman!

There are 2 comments for this article
  1. FourEd at 3:42 pm

    This is a very important issue to bring up. I’m sure that some people who rent out their property are unaware of this and you certainly do not want to be paying a fine for tax evasion.

  2. DGiTax at 1:42 pm

    While the Irish Tax filing deadline is 31 October, many of the overseas tax deadlines are between April and June following the relevant tax year eg France, Spain, Germany, Hungary, USA, Poland, Portugal etc.

    Apart from the fact that you must file a foreign tax return if you earn income abroad (even if you make a loss), in order to claim double taxation relief it is best to file your foreign tax return at least before 31 october so that you know what foreign taxes are payable before you file your Irish tax return.

    Also to avoid higher penalties it is wise to bring your overseas tax affairs up to date before the Foreign or Irish Tax Authorities notify you – it is better for you to contact them first. The longer you default on your tax returns, the higher the interest & penalties that can apply.

    In countries where an annual tax deduction is available for the cost of the building eg Germany & France, and where you have a loan interest deduction, you may in fact have no foreign tax liability – none the less you must file a tax return. Any foreign losses can be carried forward and offset against future foreign profits.

    Further details on overseas tax filing deadlines and foreign taxes applicable can be found at

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