Double Taxation Agreement-pay tax twice?

C

Charley

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When I applied for a refund of overpaid tax for the year I left Ireland to work abroad, Revenue looked for proof of my earnings in the U.S. and converted it to euro and included it with my irish earnings for the part of the year I was here.

I know Ireland has a double taxation agreement with the U.S. but what's the point of it, if it just means they taxed me on my earnings in the US (where I had already paid tax) and then the Revenue taxed me on it again here?? :confused: is this correct?
 
If you did not break residence in Ireland, you would have remained taxable in Ireland on your worldwide income for the year.

Under the Double Tax Treaty, there is provision for claiming a credit in Ireland for the US tax paid.

This means that you are not doubly taxed.

If you did not get a credit for your US tax paid, you should have this reviewed by the Revenue.

However, if you did actually break Irish residence you should have calimed split year relief, and therefore not been taxed in Ireland on your US income in the year you left Ireland.

You should really take professional advice if you can't resolve this issue yourself.
 
just checked again and there is a small credit for tax paid but it's only a fraction of the income they have converted as my american earnings. If they're not supposed to tax you on foreign earnings where there's a DTA, why is it included as income at all?

If was in Ireland for less than 183 days in that year, does that make me non-resident for that tax year? If so, should the foreign income not be exempt from tax.

thanks
 
You are resident in Ireland if you spend 183 days in the State in any tax year, and also if you spend 240 days in total in that year and the previous year.

If you leave Ireland with the intention of becoming non-Irish resident (and in fact become non-resident in Ireland) you will get split year treatment, and only be taxed on your Irish income up to the date of your departure.

Firstly you need to establish your Irish residence situation.

If you are non-Irish resident, you are only taxable on Irish arising income.

However, if you are Irish resident you are taxable on your worldwide income but are given a tax credit for any foreign tax paid. This is what is covered under the Double Tax treaty.

If you are still not sure of your position, you need to take professional advice.
 
Sorry - the days mentioned above should be 280 - not 240.
That was a typo.
 
To clarify, I spent 365 days here in 2006, 142 days in 2007, 0 days in 2008 and & will be resident in excess 183 days for 2009.

My understanding is that I am resident for tax years 2006 and 2009 only. Is I correct in this?

thanks for your help so far
 
You would also be resident in 2007 as you spent at least 30 days in the state in 2007 in combination with at least 280 days in the state between 2006 and 2007
 
Okay...I gotcha now. Guess I'm not getting a tax refund then :rolleyes:.
Thanks for the clarification.
 
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