How do I give Revenue details of my Turkish apartment?
Q&A: Dominic Coyle looks at a complication arising from a holding of foreign property
Istanbul: Ireland has a double-taxation agreement with Turkey covering tax on income, among other things. Photograph: Chris Hondros/Getty Images
I bought an apartment in Turkey in 2009 for €60,000 and have rented it out unfurnished since 2012. I have declared the purchase and the yearly rental amount on my annual tax returns to Irish Revenue each year along with income from other rental properties in Ireland.
It turns out that the rental company in Turkey transferred the rent to a Turkish deposit account of mine and the account now has €10,000 in it, earning 7 per cent per annum minus 3 per cent which the bank automatically deducts and sends to Turkish tax authorities.
The account would have earned €4,000 interest over the last five years. I think I am liable for 20 per cent to Irish Revenue on the interest earned after the Turkish 3 per cent has been paid.
All I want to do is download a disclosure form, complete it and post it to Revenue together with a cheque, but their site is extremely complicated and I’m not sure if I can even download a form. I spoke to an accountant and he wanted €750 to do it online.
Can I simply do everything by letter to Revenue and showing the interest itemised for each year with cheque included.
Mr DK, Spain
I think you might be over-worrying here. As far as the Revenue clampdown on offshore assets is concerned, there is no requirement to explain why material was not disclosed to now, simply to declare it and pay any tax due.
From your letter, you have a pretty strong record in disclosure to the Revenue so I cannot see any problem there.
Also, you have paid withholding tax in Turkey – 15 per cent of the interest accrued. Ireland has a double-taxation agreement with Turkey covering tax on income, among other things. So when you make your Revenue declaration, allowance is made for that money already deducted.
The fun and games comes in figuring out how much you owe and how to pay it. You need to calculate your liability each year, so you will need to know how much interest the account earned in each year. The liability is the sum of the tax due (including any USC and PRSI, if applicable) and the interest on the sum (which varies year to year).
It is fiddly but it should be possible to work out without forking out €750 to an accountant. The tax rate due depends on your marginal rate in each of the five years concerned.
You should deduct any sums paid to the Turkish authorities and explain the amount and that it has been withheld in an accompanying letter. Oh, and don’t forget you will have to convert everything from Turkish lira into euro.
If as in your case, the tax owing is less than €6,000, the Revenue will not apply a penalty to that sum.
The Revenue certainly wants you to file information on your liability and any money owing online but you can do it offline. You will need to download and fill out a disclosure form, which is available at http://iti.ms/2ou7EV7. If you click on the Liabilities Estimator excel file, it will bring up a page with several tabs along the bottom, one of which is disclosure form.
You can send the form and the payment to Office of the Revenue Commissioners, Offshore Assets Group, Ashtown Gate, Navan Road, Dublin 15, D15 XKP4.
To be fair to Revenue, there is an excellent Frequently Asked Questions guide covering almost every eventuality at the same website that I mentioned above.
Send your queries to Dominic Coyle, Q&A, The Irish Times, 24-28 Tara Street, Dublin 2, or by email to email@example.com. This column is a reader service and is not intended to replace professional advice.