Pension and Retirement Income Tax in Ireland

Below is the same-style framework, but for retirement and pension income.

1. Resident, ordinarily resident, Irish‑domiciled

Status: Resident + ordinarily resident + Irish‑domiciled

• Occupational pensions (Irish or foreign):
  • Taxable in Ireland under PAYE or via self‑assessment, at 20% / 40% depending on your bands.
  • Foreign tax may be creditable if there is a Double Taxation Agreement (DTA).
• State pensions (Irish):
  • Taxable in Ireland (even if often paid without deduction of tax – you may need to file / adjust credits).
• Foreign state / social security pensions:
  • Generally taxable in Ireland if you are Irish‑resident, subject to any DTA that may give taxing rights to the other country.
• Irish public sector / government pensions:
  • Typically taxable in Ireland under most DTAs, even if you live abroad later.
• ARFs / vested PRSAs:
  • Withdrawals taxed at source regardless of residence.
• PRSI:
  • No PRSI on occupational or social welfare pensions.
• USC:
  • Generally chargeable on pension income (subject to normal USC rules and age‑related reliefs).

2. Resident, ordinarily resident, non‑Irish‑domiciled

Status: Resident + ordinarily resident + non‑Irish‑domiciled

• Irish pensions (occupational, State, ARF/PRSAs): fully taxable in Ireland.
• Foreign pensions:
  • In practice, foreign pension income is normally treated as arising in, and directly taxable in, Ireland (DTAs may move taxing rights – in many treaties, private pensions are taxed where the recipient lives; government pensions where they arise).
  • The remittance basis that can apply to investment income for non‑doms does not generally shelter typical pension income in the same way.
• Foreign tax suffered may be available as a credit under a DTA or unilateral relief.

3. Resident but not ordinarily resident

Status: Resident + not ordinarily resident

• For pension income, you are effectively treated like a full resident:
  • Irish pensions: fully taxable.
  • Foreign pensions: generally taxable in Ireland (subject to DTA / credits).
• Ordinary residence does not usually create a special “€3,810”‑type carve‑out for pensions (that limit is about certain foreign investment income).

4. Non‑resident but ordinarily resident

Status: Non‑resident + ordinarily resident

• You are non‑resident, but for pensions the key factors are source and treaty:
  • Irish pensions (especially public sector / government): generally taxable in Ireland.
  • Other Irish occupational / private pensions: often still taxed in Ireland unless a DTA gives exclusive taxing rights to the country of residence and you obtain a PAYE Exclusion Order.
  • Foreign pensions: normally not within Irish tax if you are non‑resident and they are foreign‑source, unless you are also Irish‑resident in that year.
• ARF / vested PRSA withdrawals: taxed at source in Ireland regardless of residence status and no PAYE Exclusion Orders are given for these.

5. Non‑resident and not ordinarily resident

Status: Non‑resident + not ordinarily resident

• Irish occupational / private pensions:
  • May continue to be taxed in Ireland under PAYE unless you:
    • Move to a country with a DTA, and
    • Obtain a PAYE Exclusion Order where the treaty gives taxing rights to the new country of residence.
• Irish public sector / government pensions:
  • Typically remain taxable in Ireland, even if you are fully non‑resident, under the “Government services” article in most DTAs.
• Irish State pensions:
  • Can be taxable in Ireland or in your country of residence depending on the treaty; practice can vary by jurisdiction.
• Foreign pensions: generally outside Irish tax in a non‑resident, non‑ordinarily resident year, unless Irish‑source.

6. Retirement lump sums

• From Irish and qualifying foreign pensions:
  • First €200,000 of total retirement lump sums (since 7 Dec 2005 from Irish, and since 1 Jan 2023 from foreign arrangements) is tax‑free.
  • Next €300,000 taxed at 20% income tax.
  • Any balance taxed at your marginal income tax rate, plus PRSI and USC (where applicable).

7. Moving abroad after retirement – key points

• If you retire and then move abroad:
  • Check if new country has a DTA with Ireland.
  • If the DTA gives taxing rights to the new country (usually for private pensions), you can request a PAYE Exclusion Order so no Irish tax is deducted.
  • If there is no DTA, or in the case of most Irish public sector pensions, Irish tax generally continues to apply.
  • ARF / vested PRSA withdrawals always taxed at source in Ireland.

If you outline your situation (e.g. “Irish‑domiciled, living in Spain, Irish public sector pension €X, UK State pension €Y”), a short, precise summary of the expected Irish tax treatment can be set out.

Speak to Professional Tax Advisers

To discover more about Income Tax in Ireland, please call us on +353 (0)1 272 3858 or complete a Free Online Enquiry.