Finian McGrath (Dublin North Central, Independent)
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Question 88: To ask the Minister for Finance the position regarding taxation in respect of an American citizen (details supplied). [24601/12]

Michael Noonan (Limerick City, Fine Gael)
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The taxation of citizens of the United States of America is a matter for the Government of that country. I understand that the USA taxes its citizens regardless of where they live in the world and that this has been the case since 1913. Ireland imposes income tax on individuals resident in the State and on individuals who are not resident in the State but who have an Irish source of income. One of the principal purposes of the Double Taxation Convention between Ireland and the United States is to avoid income being doubly taxed. Consistent with US tax treaties generally, the Convention has limited application in relation to the taxation of US citizens - for example, a US citizen, treated as Irish resident for the purposes of the Convention, who is in receipt of Irish-sourced interest income can be subject to US tax. However, the Convention requires the United States to give credit for Irish tax - such as DIRT on interest income - against any US tax payable on that income and does not limit the application of this requirement in the case of US citizens. The Convention requires that the relief is to be given in accordance with the provisions and subject to the limitations of the law of the United States.