Foreign Income and Double Taxation Agreements

Here’s the same style layout, focused on foreign income and Double Taxation Agreements (DTAs).

1. Resident and ordinarily resident

Status: Resident + ordinarily resident (typical long‑term resident)

• Scope of tax: Taxed in Ireland on worldwide income (including all foreign income).
• Foreign income examples:
  • Employment abroad, director’s fees, self‑employment abroad
  • Foreign rental income
  • Foreign bank interest / dividends / other investments
  • Foreign pensions
• DTA interaction:
  • If foreign tax is also charged, a DTA (or unilateral relief) may give:
    • Credit relief: Irish tax due is reduced by foreign tax paid (up to the Irish tax on that income).
    • Exemption / exclusive taxing rights in the other country for some income types.
  • You claim credit in your Irish tax return; any foreign tax actually refunded cannot also be credited.

2. Resident but not ordinarily resident

Status: Resident + not ordinarily resident (recently arrived / short‑term)

• Foreign employment income:
  • Irish tax on Irish duties, and usually on foreign duties while resident, subject to DTA, credits, and sometimes split‑year rules.
• Foreign investment income (interest, dividends etc.):
  • If from a foreign source and not remitted to Ireland, it can be outside Irish tax in some non‑ordinary residence cases.
  • Once remitted, it is generally taxable.
• Foreign pensions:
  • Generally taxable in Ireland if you are resident, with DTA credit / exemptions where applicable.

3. Non‑resident but ordinarily resident

Status: Non‑resident + ordinarily resident (long‑term emigrant but still ordinarily resident)

• Foreign earnings / foreign trading income:
  • Usually outside Irish tax if arising from work or trade carried on entirely abroad.
• Foreign investment income:
  • Certain foreign income (mainly investment income) remains taxable in Ireland, subject to a small annual exemption (€3,810 in aggregate for some categories).
  • Above that, it is chargeable in Ireland, with DTA relief / credits if foreign tax also paid.
• Foreign pensions:
  • Often outside Irish tax if you are non‑resident, but check treaty wording and whether Ireland is given any taxing rights.

4. Non‑resident and not ordinarily resident

Status: Non‑resident + not ordinarily resident (fully “gone” for Irish purposes)

• General rule: Ireland taxes you only on Irish‑source income.
  • Most foreign income (employment, business, rentals, investments, pensions) is outside Irish tax.
• DTA relevance:
  • DTAs still matter if there’s any doubt whether income is Irish‑source (e.g. director’s fees, some digital services, etc.).
  • They can prevent foreign‑source income being treated as Irish‑source in edge cases.

5. How DTAs actually work in practice

• They do not create tax, they allocate taxing rights between Ireland and the other country and provide relief from double taxation.
• Typical DTA outcomes:
  • Exclusive taxing rights to one country (e.g. some pensions, government salaries, some business profits without a permanent establishment).
  • Shared taxing rights but one country (usually the country of residence) must give credit for tax paid in the other.
• Claiming relief:
  • Foreign tax credit is limited to the Irish tax on the same income; it cannot create or increase a loss.
  • Irish Revenue can only refund Irish tax, never foreign tax; any foreign refund is claimed abroad.
  • For ongoing PAYE income, sometimes a PAYE Exclusion Order can be used so Ireland stops deducting tax if a DTA gives taxing rights to the other country.

If you outline your exact situation (residence status, countries involved, type and amount of foreign income), a tailored summary of how the DTA and Irish rules would apply can be provided.

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