I am advised by Revenue that there are insufficient details provided to allow the provision of a definitive reply to the Deputy’s question.
I can say that, in general, pensions received by Irish residents from an Irish source are subject to tax under the PAYE system. However, the taxation of a German-sourced pension received by persons who are resident in the State is governed by the rules of the Ireland-Germany Double Taxation Convention (“the German DTC”). The purpose of any Double Taxation Convention to prevent double taxation and double non-taxation.
In the case of the German DTC, the position generally regarding occupational pensions, other than Government service pensions, is that pensions paid to a resident of Ireland are taxable only in Ireland. Pension payments made under the social insurance legislation of Germany are to be taxed only in Germany. Notwithstanding these general rules, pensions are subject to German taxation where pension contributions have been tax-relieved in Germany for a period of 12 years. However, if Germany does not tax such pensions, then the pension will be taxable in Ireland.
Government service pensions, i.e. pensions for services rendered to Germany, are taxable only in Germany, unless the services are performed in Ireland by a resident and national of Germany in which case they are taxable only in Ireland.
The current German DTC exists since 2011. Where persons are in receipt of pensions before the coming into force of that DTC, there are also options for the pension recipients to continue to avail of certain provisions of the previous DTC. Under the previous German DTC, pensions (other than Government service pensions) derived from Germany by a person resident in Ireland were to be exempt from tax in Germany, subject to conditions.
If the Deputy has a particular case or cases in mind, then, if he could provide further details in relation to particular circumstances of the pension payments, Revenue will endeavour to give a definitive position on the taxation of the pension(s) concerned.