Eamon Scanlon (Sligo-Leitrim, Fianna Fail)
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59. To ask the Minister for Finance if a person (details supplied) will be affected by a double taxation anomaly in regard to tax already paid in the EU; and if he will make a statement on the matter. [37890/18]

Paschal Donohoe (Dublin Central, Fine Gael)
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The tax treatment of a teacher’s pension depends on a number of factors: the origin of the funds paying the pension, the nationality of the individual and his/her residence status.

For example, if the pension is received by an individual who worked as a teacher paid out of public funds, then in application of Article 18(2) of the Double Taxation Convention (“the Convention”) between Ireland and the United Kingdom (1976) as amended by the Protocol signed on 4 November 1998, which applies to all remuneration received in the exercise of Government functions, the pension will be taxable in the United Kingdom, unless the individual is a national of Ireland residing in Ireland. In that case, Ireland will have an exclusive taxing right.

Article 18(2) reads: "(a) Any pension paid by, or out of funds created by, a Contracting State or a political subdivision or a local authority thereof to an individual in respect of services rendered to that State or subdivision or authority, in the discharge of functions of a governmental nature, shall be taxable only in that State. (b)However, such pension shall be taxable only in the other Contracting State if the individual is a resident of, and a national of, that State."

Remuneration and pensions paid out of public funds for work carried out in educational institutions have the consideration of a Government service in application of Article 18(3) of the Convention as amended by the Protocol of 1998, which reads: "Paragraphs (1) and (2) of this Article shall respectively apply to salaries, wages and other similar remuneration of an individual employed in an educational institution and to any pension in respect of such employment of an individual formerly so employed, paid directly by, or wholly or mainly from funds provided by, a Contracting State... "

If the pension is received by an individual who worked as a teacher, but the salary did not arise from public funds, then Article 17 (Pensions) of the Convention determines that the taxing right corresponds exclusively to the State of residence, in this case, Ireland.

Article 17 reads: "Subject to the provisions of paragraphs (1) and (2) of Article 18, pensions and other similar remuneration paid in consideration of past employment to a resident of a Contracting State and any annuity paid to such a resident shall be taxable only in that State."

Any possible double taxation that may occur would be relieved with the application of Article 21(2) of the Convention, which reads: "Subject to the provisions of the law of the United Kingdom regarding the allowance as a credit against United Kingdom tax of tax payable in a territory outside the United Kingdom (which shall not affect the general principle hereof)— (a) Irish tax payable under the laws of Ireland and in accordance with this Convention... shall be allowed as a credit against any United Kingdom tax computed by reference to the same profits, income or chargeable gains by reference to which the Irish tax is computed."

The form of operation of the provision above is a matter for Her Majesty's Revenue and Customs (HMRC).

Given the complexities set out above, it would be best for the individual concerned to make contact with Revenue directly to get the full clarity sought.