Léim ar aghaidh chuig an bpríomhábhar
Gnáthamharc

Dáil Éireann díospóireacht -
Tuesday, 21 Jul 1959

Vol. 176 No. 11

Ceisteanna—Questions. Oral Answers. - Tax Liability of American Citizens.

9.

asked the Minister for Finance if he will make a statement on the liability to income tax of citizens of the United States who come to this country to live or retire.

10.

asked the Minister for Finance if he will state the position of American citizens who take up residence here as regards income tax payable on social security pensions, special army allowance pensions and disability pensions awarded to them by the United States Government.

I propose, with the permission of the Ceann Comhairle, to take Questions 9 and 10 together.

While persons who come to this country for permanent residence are chargeable to Irish Income Tax on their total income from all sources, nevertheless the charge to Irish tax, so far as the income arises from sources in the United States, is modified by the provisions of the Convention for the avoidance of double taxation between the Government and the United States Government. Each individual case would of course require to be studied on its facts in relation to the provisions of the Convention but it may be broadly stated that, under these provisions, certain categories of income such as interest and copyright royalties are, subject to conditions, chargeable only in the country where the recipient resides. It is a condition that exemption from United States tax is not allowable if the Irish resident is a citizen of the United States.

It is provided further by Article X of the Convention that any salary, wage or pension paid by the United States Government in respect of services rendered by the pensioner to the United States in the discharge of governmental functions shall, if he is a citizen of the United States, be exempt from Irish tax. It is to be noted that a citizen of Ireland does not qualify for the exemption unless he is at the same time a United States citizen. Pensions payable by the United States Government to retired Federal personnel (civil servants, members of the army, navy, etc.) are regarded as within the exemption from Irish tax under Article X if the condition as to citizenship is fulfilled.

Special army allowance pensions and disability (wounds, etc.) pensions payable to retired members of the United States armed forces qualify for the exemption from Irish tax under Article X unless the pensioner is not a United States citizen. Pensioners of this kind returning to Ireland from the United States would for the most part be United States citizen. Apart, however, from the Convention and without regard to citizenship a disability pension in respect of services with the United States armed forces would be exempted from Irish tax if it were granted in respect of what is or what may be regarded as service-connected disability.

All other United States pensions (e.g., pensions payable by local authorities, companies, etc.) purchased life annuities derived from sources in the United States, and United States social security pensions are chargeable to Irish tax. By virtue of Article XII a resident of Ireland who is not a United States citizen may secure exemption from the tax of the United States in relation to such pensions or annuities.

It should be explained generally that where, under the provisions of the Convention, income from sources within the United States (including pensions) is chargeable to both Irish tax and United States tax, a credit in respect of United States tax paid on the income is allowable, under paragraph (2) of Article XIII of the Convention, against Irish tax payable on it. Double taxation if it arises is in this way relieved.

Barr
Roinn