asked the Minister for Finance if his attention has been drawn to the fact that Irish people who return from the United States to retire at home and who never took American citizenship have to pay federal income tax on their social security pension at the present rate of 15 per cent and that such deductions are not made on the pensions of people retiring to such countries as England, Japan and Italy because of reciprocal tax arrangements; and in view of this, if any legislation or agreements are being negotiated or considered to eliminate this imposition on the people returning to Ireland.
Written Answers. - Tax Arrangements with US.
73.
Up to 1 January, 1984, United States social security pensions were exempted from a charge to tax in the United States under the domestic law of that country.
The position changed as from that date following the enactment of the Federal Social Security Tax Act, 1982. The United States authorities have since that time deducted tax at 15 per cent from social security pensions paid to Irish residents who are not also United States residents.
The existing double taxation arrangements between Ireland and the United States are at present the subject of negotiations. The treatment of United States Social Security pensions in the hands of Irish residents is under review in that context.
The terms of the tax treaties between the United States and the United Kingdom, Japan and Italy are different from those contained in the existing treaty concluded with Ireland, in so far as the tax treatment of these pensions is concerned.