Paul McGrath (Westmeath, Fine Gael)
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Question 222: To ask the Minister for Finance if he will consider a tax credit similar to the PAYE tax credit to recipients of foreign pensions, in cases in which it is their sole income, to put these pensioners on an equal footing to recipients of Irish contributory pensions; and if he will make a statement on the matter. [14122/05]

Brian Cowen (Laois-Offaly, Fianna Fail)
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Entitlement to the employee PAYE tax credit in respect of a foreign occupational pension in this case is subject to meeting all the following statutory conditions: The foreign pension is chargeable to tax in the country in which it arises and, on payment, is subject to a system of tax deduction at source in that country similar in form to Irish PAYE deductions; the foreign pension is fully chargeable to tax in this State; and the pension, if it arose in this State, would be subject to PAYE deductions.

As the person's pension is neither chargeable to tax nor subjected to any form of tax deduction in the state in which it arises owing due to the provisions of the double taxation agreement between Ireland and the United Kingdom, the above criteria are not met and the employee tax credit is not due.

I have asked my Department, in conjunction with the Revenue Commissioners, to look at the points raised by the Deputy in this case as regards the treatment of such pensions under the law. I will communicate further with the Deputy in due course.