Vol. 562 No. 1
285 Mr. Carey asked the Minister for Finance if he will give consideration to addressing an apparent anomaly in section 784 of the Taxes Consolidation Act 1997 to provide for non-residents to receive an exclusion order in respect of income from an approved retirement fund, as is done for other income taxable under Schedule E; and if he will make a statement on the matter. [5618/03]
Most double taxation treaties provide that pensions, other than governmental pensions, are liable to income tax only in the country of residence. Generally, an individual who is resident in another State with which Ireland has a double taxation treaty and who is in receipt of an Irish pension, is taxed in the State in which the individual is resident. To avoid double taxation, the treaty provides that the pension is not taxable in Ireland and an exclusion order is issued by the Revenue Commissioners which has the effect of excluding the person paying the pension from the requirement to operate PAYE on the payments.
It would appear from the details of the particular case as supplied by the Deputy that the non-resident person in question is in receipt of both a normal pension in respect of which an exclusion order has been issued and also owns an approved retirement fund, ARF. I am informed by the Revenue Commissioners that withdrawals from an ARF are subject to Irish income tax in accordance with the provisions of section 784A(3) of the Taxes Consolidation Act 1997. In other words, the withdrawals are subject to PAYE deductions. However, the Revenue Commissioners understand that withdrawals from the ARF are not taxed in the country in which person in question is resident, nor are ARFs mentioned in double taxation treaties. Since double taxation of the withdrawals from the ARF does not arise, there would appear to be no basis on which relief from Irish tax should be granted.
