Taxes Consolidation Act 1997 section 780

Charge to income tax on repayment of employees' contributions

Section 780 imposes a tax charge at the standard rate of income tax on repayments of contributions made to an employee during his or her lifetime from an exempt approved occupational pension scheme or a statutory scheme.

• A repayment of contributions from an exempt approved scheme or a statutory scheme to an employee during his or her lifetime is chargeable to income tax at the standard rate (currently 20%), assessed on the scheme administrator under Schedule D Case IV.
• The charge does not apply where the employee's employment was carried on outside the State, nor where contributions are transferred to a PRSA rather than refunded to the employee.
• Tax is charged on the gross amount of the repayment (before any deduction of tax), and the amount so charged is not treated as income of the employee for any other purpose of the Income Tax Acts.
• The Minister for Finance may by order vary the rate of tax, subject to the order being laid before Dáil Éireann and not annulled within 21 sitting days.