The Foreign Earnings Deduction (FED) is a tax relief available to employees of Irish companies who spend time working overseas in certain qualifying countries
Many Irish businesses are seeking to develop growth opportunities overseas particularly in light of Brexit. Doing so is likely to involve sending employees overseas for business development and marketing trips.
The Foreign Earnings Deduction (FED) is a tax relief available to employees of Irish companies who spend time working overseas in certain qualifying countries (see table below).
The relief was introduced in Finance Act 2012 and was enhanced in Finance Bill 2016 to further support efforts by Irish companies to expand into these emerging markets. The relief has been extended to include the tax years 2018, 2019 and 2020.
With effect from 2017, the relief is now available to Irish resident individuals who spend at least 30 “qualifying days” working outside of Ireland in any of the qualifying countries in a continuous 12 month period. For years prior to 2017, the requirement was a minimum of 40 qualifying days and for years prior to 2015, the requirement was a minimum of 60 qualifying days.
Download the PDF for a detailed outline and examples of applying Foreign Earnings Deduction.
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