Taxation of pensions

Taxation of retirement lump-sums

You can receive a tax free lifetime limit of €200,000 on retirement lump sums from all sources. The amount between €200,001 and €500,000 is taxable at the standard rate of tax (20%). Any amount in excess of €500,000 is taxed under Pay As You Earn (PAYE) at the marginal tax rate (40%).

Lump sum payments arising from foreign pension arrangements are taxed in the same manner. However, you must include details of the lump sum on an Income Tax Return (Form 11 or Form 12). You must pay any tax due when making your annual Income Tax payment.

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