Dáil Éireann Debate, Tuesday - 18 December 2012
184. Deputy Bernard J. Durkan asked the Minister for Finance if in the context of double taxation agreement or similar arrangement, a US/Irish citizen having dual citizenship is restricted to entitlement to one pension only either from the US or from this country, if the person opts for one or either he/she becomes debarred from a US pension; and if he will make a statement on the matter. [56877/12]
View answerI wish to advise the deputy that, under the terms of the double taxation agreement (DTA) between Ireland and the United States, the rules provide that one or other of the countries has exclusive rights to tax pensions. Broadly, private (i.e. non-government service) occupational pensions are taxable only in the country of residence of the pensioner. Government pensions are generally taxable only in the country that pays the pension— but if the recipient is a resident and national (citizen) of the other country such pensions are taxable only in the recipient’s country of residence. Social security benefits are taxable only in the country of residence of the pensioner. There is a separate set of rules to determine whether a person is resident in Ireland or the United States for the purposes of the double taxation agreement. Specifically, if, under the laws of the two jurisdictions, an individual is deemed to be a resident of both jurisdictions, a series of tiebreaker rules are provided to determine a single country of residence for that individual.
While the Ireland/US double taxation agreement is, accordingly, concerned with the allocation of taxing rights—setting out the way in which pensions paid from either jurisdiction may be taxed between Ireland and the United States and using tiebreaker rules to establish where an individual is resident—the DTA does not restrict an individual’s entitlement to a pension and has no role in that regard.
