Tuesday, 25 March 2014
Department of Finance
248. To ask the Minister for Finance under the tax agreements with the United States, the obligations an Irish citizen residing in Ireland has to pay income tax to Irish revenue on income from a US pension if tax is already paid to the US Government based on the income from the pension to pay income tax to Irish revenue on income from a US pension if the income amount is lower than the income tax threshold in the United States. [13649/14]
I assume that the Deputy is referring to a pension that, in the hands of a United States citizen, would be regarded as income for the purposes of United States tax. On that basis, I am informed by the Revenue Commissioners that, having regard to the terms of Article 18 of the Ireland-United States Double Taxation Agreement, a United States pension in consideration of past employment or a United States social security pension derived by an individual who is tax resident in Ireland is taxable only in Ireland. In addition, under the terms of Article 19 of that Agreement, a pension paid out of funds created by the United States to an individual in respect of services rendered to the United States is only taxable in Ireland where the individual is a national of Ireland and is tax resident in Ireland.
The question of whether an individual ultimately would have a tax liability in Ireland will depend on the amount of his or her total income, including pension income, and his or her personal circumstances, for example marital status, entitlement to tax credits etc. Where under the terms of the Double Taxation Agreement income is taxable in Ireland, any US income tax thresholds would not be relevant.
For the sake of completeness, I should add that if a United States pension (other than a Social Security pension) would not be regarded as income for the purposes of US tax where it is received by an individual who is resident for tax purposes in the United States and not resident elsewhere, then such a pension would be exempt from Irish tax if received by an individual who is resident in Ireland for tax purposes.