Who Should Read This?
This guide is for anyone in Ireland who has received shares from an employer, exercised share options, sold shares, received dividend income, or invested in company shares privately. Whether you work for a multinational with an RSU or SAYE plan, own shares in your own company, or have sold shares and are unsure about your Capital Gains Tax position, this guide answers your questions clearly.
In this guide, you’ll find:
- How employment-related shares are taxed in Ireland and what your employer does and does not handle
- The five main types of employee share schemes explained RSUs, share options, APSS, SAYE, and KEEP
- How Capital Gains Tax works on the sale of shares in Ireland rates, exemptions, and reliefs
- How dividend income is taxed DWT, income tax, and filing requirements
- All key deadlines RTSO1 (30 days), CGT payment (15 December and 31 January), Form 11 (October)
- How to calculate your CGT on a share sale step by step with a worked example
- Common mistakes that trigger Revenue queries and how to avoid them
- Answers to the most frequently asked questions
Key Takeaways
- All employment-related shares in Ireland must be declared in your income tax return whether your employer has processed PAYE on them or not
- For unapproved share options, you must file a Form RTSO1 and pay the Relevant Tax within 30 days of exercising the option this is your responsibility, not your employer’s
- CGT at 33% applies when you sell shares at a profit the first €1,270 of net gains per year is exempt
- RSUs create two tax events: income tax (through PAYE) on vesting, and CGT (your responsibility) on any subsequent gain when sold
- KEEP is the most tax-efficient employee share option scheme available to Irish SMEs no income tax, PRSI, or USC on exercise, with CGT deferred to the sale date
- Dividends must be declared even if DWT at 25% has been deducted at source by the paying company
Tax on Company Shares in Ireland
Company shares are one of the most common forms of employee compensation in Ireland, particularly in the multinational technology, pharmaceutical, and financial services sectors that make up such a significant part of Ireland’s economy. RSUs, share options, SAYE plans, and approved profit-sharing schemes are standard features of employment packages for hundreds of thousands of workers in Ireland.
They are also one of the most consistently misunderstood areas of Irish personal tax. Many employees receive shares, assume their employer has handled the tax, and discover years later through a Revenue query or a routine tax review that they have an unpaid liability they did not know about. Others miss the critical 30-day deadline for reporting unapproved share option exercises and incur interest they could have avoided entirely.
This guide explains the full picture clearly, covering every type of share scheme used in Ireland, how each one is taxed, what you need to file, and when you need to do it.
Do You Pay Tax on Shares in Ireland?
The short answer is yes but the specific taxes, the timing, and the person responsible for paying them depend on the type of share scheme involved.
There are two broad categories of employment-related share schemes in Ireland: Revenue-approved schemes (which carry specific tax exemptions or deferrals as an incentive) and unapproved schemes (where income tax applies in full at standard rates when shares are received or options exercised).
Beyond employment-related shares, anyone who sells shares and makes a gain whether they bought those shares on a stock exchange or received them from an employer may be liable to Capital Gains Tax. And anyone who receives dividend income from shares held in an Irish or foreign company must declare that income in their annual tax return.
How Are Employment-Related Shares Taxed in Ireland?
The taxation of employment-related shares in Ireland involves up to three separate taxes depending on the scheme type and your personal tax position:
Income Tax at 20% or 40%, depending on your total income level, on any employment benefit arising from share awards or option exercises. This is the same income tax you pay on your salary.
PRSI (Pay Related Social Insurance) at 4% on the value of shares received as employment income.
USC (Universal Social Charge) at graduated rates up to 8% on share income above certain thresholds.
In addition, when you eventually sell shares whether received from an employer or purchased privately a fourth tax may arise: Capital Gains Tax at 33% on any profit made on the disposal.
The key question for each type of scheme is: which of these taxes applies, at what point in time, and who is responsible for paying it your employer through PAYE, or you directly through a Form RTSO1 or your annual Form 11 income tax return?
The Main Employee Share Schemes in Ireland
1. Unapproved Share Options
A share option is a contractual right to purchase shares in your employer’s company at a fixed price the exercise price at a future date. The option itself is not taxed when granted. The taxable event occurs when you exercise the option when you actually decide to buy the shares at the agreed price.
At the point of exercise, if the market value of the shares is higher than the exercise price you pay, the difference is a taxable benefit. Under an unapproved scheme, this benefit is subject to income tax, PRSI, and USC and critically, this tax is not processed through PAYE by your employer. You are responsible for reporting and paying it yourself.
The RTSO1 obligation: You must complete a Form RTSO1 and pay the Relevant Tax on Share Options (RTSO) which covers income tax, PRSI, and USC on the gain at exercise directly to Revenue within 30 days of exercising the option. This 30-day deadline is firm, and missing it results in interest at 8% per annum from the due date.
The exercise of the option must also be reported in your annual Form 11 income tax return for the tax year in which you exercised.
CGT on subsequent sale: If you hold the shares after exercising the option and later sell them at a higher price, the additional gain from the market value at exercise to the sale price is subject to CGT at 33%.
Example: You exercise a share option, buying 1,000 shares at €5 each (exercise price) when the market value is €12 per share. The taxable employment benefit is €7,000 (€12,000 market value minus €5,000 cost). You owe income tax, PRSI, and USC on this €7,000 via RTSO1 within 30 days. One year later you sell the shares at €18. Your CGT gain is €6,000 (€18,000 sale proceeds minus €12,000 acquisition cost for CGT purposes). CGT of 33% applies to €6,000 minus your annual exemption of €1,270 so you owe CGT on €4,730 approximately €1,561.
2. Restricted Stock Units (RSUs)
RSUs are the most prevalent form of equity compensation among employees of large multinationals operating in Ireland. An RSU is not a share you receive immediately it is a conditional promise to receive shares (or cash) in the future, subject to remaining employed for a vesting period.
When RSUs vest, the market value of the shares on the vesting date is treated as employment income. Your employer should process income tax, PRSI, and USC on this amount through PAYE in the pay period in which vesting occurs. Many employers particularly those operating internationally do this correctly. However, errors are common: incorrect tax rates applied, the wrong number of shares included, or insufficient amounts withheld. You are responsible for ensuring the correct tax has been paid, even if your employer has made an error.
The vesting income appears in your Employment Detail Summary (formerly P60) from Revenue, but it is worth checking this carefully against your equity statement each year.
CGT on RSU sales: If you retain the shares after vesting and later sell them, any gain from the vesting-date market value (your acquisition cost for CGT) to the sale price is subject to CGT at 33%. This CGT event is entirely your responsibility your employer does not handle it. CGT payment and return filing deadlines apply as with any other share disposal.
3. Save As You Earn (SAYE) Schemes
SAYE is a Revenue-approved share option scheme that operates through regular savings from salary. You save between €12 and €500 per month over a three or five year period through a payroll deduction. At the end of the savings period, you have the option but not the obligation to use your accumulated savings to buy company shares at a price that was set at the beginning of the scheme, typically discounted by up to 25% below the market value at that date.
Because SAYE is Revenue-approved, you do not pay income tax on the gain from the discount when you exercise the option to buy the shares at the end of the savings period. This is the key tax benefit of the scheme. However, you do pay PRSI and USC on the discounted amount.
If you choose not to exercise the option, you simply receive your savings back with no tax consequence.
CGT on SAYE shares: When you subsequently sell the SAYE shares, CGT applies to any gain from the exercise price you paid to the sale price. If the market has risen significantly between the exercise date and the sale date, this can be a meaningful CGT liability.
4. Approved Profit-Sharing Schemes (APSS)
An Approved Profit-Sharing Scheme allows your employer to allocate up to €12,700 worth of shares to you per year completely free of income tax, provided the shares are held in a Revenue-approved trust for the minimum retention period currently three years for full income tax exemption.
This is one of the most generous tax-efficient employee benefits available in Ireland. Receiving €12,700 in APSS shares rather than salary saves a higher-rate taxpayer approximately €5,080 in income tax per year.
The income tax exemption does not extend to PRSI and USC these charges apply on the value of the shares allocated. And when you sell the shares after the retention period, CGT applies on the gain from the allocation value to the sale price.
5. Key Employee Engagement Programme (KEEP)
KEEP is a Revenue-approved share option scheme introduced specifically to help qualifying Irish SMEs compete with large multinationals in attracting and retaining talent. The scheme allows qualifying employees, directors, and full-time workers to be granted share options in qualifying companies under very favourable tax terms.
Under KEEP, no income tax, PRSI, or USC is payable when you exercise the option unlike unapproved schemes where income tax applies immediately at exercise. Tax is entirely deferred to the point of sale.
When you sell the KEEP shares, CGT at 33% applies on the full gain from the exercise price to the sale price. Crucially, if you have built up a qualifying trading business and dispose of those shares, entrepreneur relief may reduce the effective CGT rate to 10% on gains up to €1 million making KEEP potentially extremely tax-efficient over the long term.
The qualifying conditions for KEEP are specific. The company must be an unquoted SME incorporated and tax resident in Ireland, carrying on a qualifying trade. The shares must be newly issued. The employee must work at least 30 hours per week for the company. Options must be granted between 1 January 2018 and 31 December 2026 (this end date has been extended several times). The option exercise price must be at least equal to the market value of the shares at the date of grant.
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Bringing It All Together
Capital Gains Tax on Selling Shares in Ireland A Full Explanation
Whether you sell employer-granted shares after vesting or exercise, or you sell shares you purchased privately on a stock exchange, CGT in Ireland operates the same way.
The CGT rate is 33% on the net chargeable gain.
Calculating your gain:
Start with your sale proceeds the total amount you received on the disposal. Deduct your allowable acquisition cost either the price you originally paid for the shares, or the market value at which shares were taxed as income when you received them from your employer. Deduct allowable incidental costs stockbroker commissions, transfer taxes, and other costs of acquisition and disposal. The result is your gross chargeable gain. Deduct any capital losses from other disposals in the same tax year (or losses carried forward from previous years). Deduct the annual personal exemption of €1,270. The remainder is your net chargeable gain, on which CGT at 33% is payable.
Worked example:
You purchased 500 shares in a company at €10 each in January 2023 (total cost: €5,000). You sell them in June 2026 for €18 each (total proceeds: €9,000). Your stockbroker charged you €75 in commission on the sale.
Gain before exemption: €9,000 minus €5,000 minus €75 = €3,925. Annual exemption: €1,270. Net chargeable gain: €3,925 minus €1,270 = €2,655. CGT payable: €2,655 × 33% = €876.15.
CGT payment deadlines:
For disposals between 1 January and 30 November 2026: CGT payment is due by 15 December 2026. For disposals in December 2026: CGT payment is due by 31 January 2027.
CGT return filing:
The CGT return for the year is included in your Form 11 annual income tax return filed by the October/November deadline. Note that the payment deadline (December or January) is earlier than the return filing deadline (October of the following year). You pay first, then file. Missing the payment deadline results in Revenue interest at 8% per annum on the unpaid CGT.
CGT losses:
If you sell shares at a loss, that loss can be offset against gains in the same tax year. Any unused losses can be carried forward indefinitely and set against future CGT gains. Losses cannot be set against ordinary income only against capital gains.
This means that if you have a mixed portfolio of winning and losing positions, the order and timing of disposals matters. Selling a loss-making position in the same tax year as a profitable one reduces your CGT liability. This is sometimes called tax loss harvesting.
Dividend Income DWT and Income Tax in Ireland
When an Irish-resident company pays a dividend, it deducts Dividend Withholding Tax (DWT) at 25% before distributing the net amount to shareholders. The DWT is remitted to Revenue by the company. However, DWT is not a final tax all dividend income must still be declared in your annual income tax return.
The treatment of the dividend in your return works as follows: the gross dividend (before DWT) is included as income in your Form 11. Income tax, PRSI, and USC are then calculated on the gross dividend at your normal rates. The DWT you have already suffered is credited against your income tax liability. If your marginal income tax rate is 40%, and DWT at 25% has already been deducted, you owe a further 15% income tax (plus PRSI and USC) on the dividend income.
If you are a lower-rate taxpayer (20%), the DWT already paid may exceed your income tax liability on the dividend in which case you are entitled to a refund of the excess DWT.
Foreign dividends: Dividends from foreign companies may not have DWT deducted, or may have foreign withholding tax applied at the rate of the paying country. Foreign dividend income is taxable in Ireland in full at your marginal rates. Credit is available for foreign withholding tax paid under Ireland’s double taxation agreements but you must claim this credit in your return. If foreign withholding tax is not properly credited, you may overpay Irish tax.
The share-related filings you need to make in Ireland depend on your specific situation.
Form RTSO1 due within 30 days of exercising an unapproved share option: This form reports the option exercise, calculates the income tax, PRSI, and USC due on the gain at exercise, and must be submitted with payment to Revenue within 30 days. There is no grace period or extension for this deadline.
Form 11 the annual income tax return, due 31 October (or mid-November via ROS): This is where you declare all share-related income for the year, including RSU vesting income (confirming what your employer processed through PAYE), SAYE or APSS income, dividend income, and your CGT position for the year. The Form 11 is also where you claim foreign tax credits, offset CGT losses, and declare the annual CGT exemption.
CGT payment due 15 December (for January–November disposals) or 31 January (for December disposals): The CGT payment is separate from the Form 11 filing. You pay the CGT through ROS in the same calendar year as the disposal before you file the annual return that covers that year.
Form RTSO1 and Form 11 together: If you exercised share options during the year, you file RTSO1 within 30 days and then also include the exercise in your annual Form 11. The RTSO payment is credited in your Form 11 calculation.
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Mistakes That Trigger Revenue Queries on Share Tax
Not declaring RSU vesting income: Revenue receives data from employers on employment-related shares. If RSU vesting income appears in employer returns but not in your personal tax return, a discrepancy arises and Revenue will write to you about it.
Missing the 30-day RTSO1 deadline: This is one of the most common and expensive mistakes in this area. Revenue charges interest from the 30th day after exercise, and the interest compounds daily. Many employees do not know the deadline exists until they receive a Revenue notice.
Using the wrong acquisition cost for CGT: If you received shares through a PAYE share scheme where income tax was paid on the vesting value, your CGT acquisition cost is the market value on the vesting date not zero. Using zero produces an inflated gain. Using the vesting-date value correctly reduces your CGT liability significantly.
Not offsetting CGT losses: Investors who sell multiple holdings in the same year sometimes calculate each gain individually without offsetting losses from underperforming positions. All gains and losses in the same tax year should be pooled.
Not using the annual CGT exemption: The €1,270 annual exemption cannot be carried forward if you do not use it in a given year, it is lost. This is worth planning around, particularly in years where you have modest gains from share sales.
Failing to declare foreign dividends: Foreign dividend income from shares in US, UK, or other international companies is taxable in Ireland and must be declared. Many PAYE workers with share plans in foreign parent companies receive foreign dividend income and assume it is not taxable in Ireland because it is from a foreign source. This assumption is incorrect.
Not claiming the foreign tax credit: If foreign withholding tax (for example, US federal withholding at 15% under the Ireland-US tax treaty) has been applied to a foreign dividend or share gain, this can be credited against your Irish tax liability. Not claiming this credit results in double taxation that you are legally entitled to avoid.
Conflating the income tax event and the CGT event: RSUs, unapproved share options, and SAYE shares all involve two separate taxable events one when the shares are received (income tax), and one when they are sold (CGT). Treating the sale proceeds as the only taxable event without accounting for the income tax already paid on the acquisition produces an incorrect CGT calculation.
Shareholding in Your Own Company Tax for Business Owners
If you are a shareholder in a private Irish company whether you founded it or acquired shares over time your shares create tax implications in several scenarios.
Dividends from your own company. If your company pays a dividend to you as a shareholder, DWT at 25% is deducted and remitted to Revenue by the company. The gross dividend is taxable as income in your hands at your marginal rate, with a credit for the DWT paid. For a director-shareholder, the choice between salary, pension contributions, and dividend distributions needs careful annual planning.
Selling your shares. If you sell shares in your private company to a third party, to another shareholder, or as part of a business exit CGT at 33% applies to the gain. Two critical reliefs are potentially available: entrepreneur relief (reducing the CGT rate to 10% on qualifying gains up to €1 million) and retirement relief (potentially eliminating CGT entirely for qualifying business owners aged 55 and over). Both reliefs have specific conditions and require careful planning before the sale.
Buying and selling shares between shareholders. Intra-company share transfers are not free of tax consequences. Stamp duty at 1% applies on share transfers. If shares are transferred below market value for example, from a founder to a family member at a nominal price Revenue can challenge the transaction and assess tax on the full market value.
Tax Planning for Share Investors and Employees in Ireland
Within the framework of Irish tax law, there are several entirely legitimate steps you can take to reduce the tax impact of your shares.
Use the annual CGT exemption every year: The €1,270 annual exemption is use-it-or-lose-it. If you have a portfolio of shares, consider disposing of positions with modest gains each year to use the exemption rather than letting it expire unused.
Harvest losses before 30 November: If you have CGT gains and also hold positions currently showing a loss, selling the loss positions before 30 November allows you to offset those losses against the gains in the December payment period. This timing matters losses crystalised in one tax year cannot be used against gains in the prior year.
Plan KEEP option exercises carefully: Under KEEP, there is no immediate income tax cost at exercise but CGT applies at sale. If entrepreneur relief is available, the effective CGT rate is 10%. Planning the timing of exercise and sale around your personal CGT position, available exemptions, and the availability of entrepreneur relief can significantly improve your net return.
Stagger RSU sales across tax years: If you have a large RSU portfolio vesting over multiple years, selling shares in tranches across tax years allows you to use the annual CGT exemption multiple times rather than incurring a large single-year gain.
Transfer shares to a spouse: Disposals between spouses and civil partners are treated in Ireland as made at the original acquisition cost no CGT arises on the transfer itself. This allows you to transfer shares to a spouse with a lower marginal tax rate, who then sells the shares in their own name, potentially at a lower effective CGT rate.
Hold shares in a pension: Shares held within an approved pension arrangement are exempt from CGT and income tax within the fund, subject to the standard pension tax treatment at drawdown. Company directors and self-employed individuals with significant share portfolios often explore this option as part of broader pension planning.
Frequently Asked Questions
Do I have to declare shares in my income tax return if my employer already handled the PAYE?
Yes. Even if your employer processed income tax, PRSI, and USC on your RSU vesting or share award through PAYE, you must still declare this income in your annual Form 11 income tax return. The Employment Detail Summary (formerly P60) from Revenue will show employment income including share-related amounts, but you are responsible for confirming the accuracy and filing your return.
What happens if I miss the RTSO1 30-day deadline for share options?
Interest at 8% per annum accumulates from the 30th day after the option exercise date. You should file the RTSO1 as soon as you realise it is overdue and pay the outstanding tax plus interest. Revenue will calculate the interest due. Filing late is better than not filing at all.
Can I offset a capital loss from shares against my rental income or employment income?
No. Capital losses from the disposal of shares can only be set against capital gains from shares or any other chargeable asset. They cannot be offset against income of any kind. Unused capital losses are carried forward indefinitely to future tax years.
Is there any CGT on shares transferred to a family member?
A transfer to a spouse or civil partner is treated as a no-gain, no-loss disposal no CGT arises on the transfer. The transferee acquires the shares at the original cost, and CGT arises when they subsequently sell them. Transfers to other family members children, siblings, parents are treated as disposals at market value for CGT purposes. Capital Acquisitions Tax (CAT) may also apply if the transfer is by way of gift.
Is there a minimum threshold below which I do not need to pay CGT?
The annual CGT personal exemption of €1,270 means the first €1,270 of net chargeable gains in a tax year is exempt. Gains below this threshold are not taxable. However, you should still declare the disposal in your return if the gross gain was above €1,270 before the exemption Revenue needs to see the full calculation to confirm the exemption has been correctly applied.
