Business travel to other countries may not be on the agenda for the moment but you should not forget about travel completed over the last year as you could potentially be entitled to a tax relief.

The Foreign Earnings Deduction (FED) is a tax relief that is available to Irish tax residents who spend some time working abroad. In order to qualify you need to have worked a minimum number of days in a relevant country:

  • for at least 60 qualifying days in 2012,2013 and 2014
  • for at least 40 qualifying days in 2015 and 2016
  • for at least 60 qualifying days in 2017 to 2022

The number of days can be in a given tax year or or during a continuous 12 month period that spans two tax years.

The effect of the relief is to give a tax relief on your salary equivalent to the days worked in the relevant states. This tax relief can be up to €35,000.

 

As an example:

Niamh an Irish tax resident worked in Brazil for 45 qualifying days in 2017. Her salary for the year was €85,000. The relief due is 4 5days / 365 days X €85000 = €10,479.5

Niamh can reduce her salary of €85,000 by €10,479.5. This will result in a tax saving.

As you would expect with tax rules there are some additional terms and conditions for the relief that will need to be assessed for you. These can be found on at www.revenue.ie

Please get in touch with us if you would like to discuss this and other potential tax savings further

 

Note the relevant countries that this relief applies to are: Brazil, Russia, India, China and South Africa and:

From 1 January 2013:

  • Egypt
  • Algeria
  • Senegal
  • Tanzania
  • Kenya
  • Nigeria
  • Ghana
  • Democratic Republic of the Congo.

From 1 January 2015:

  • Japan
  • Singapore
  • Republic of Korea
  • Saudi Arabia
  • United Arab Emirates
  • Qatar
  • Bahrain
  • Malaysia
  • Indonesia
  • Vietnam
  • Thailand
  • Chile
  • Oman
  • Kuwait
  • Mexico.

From 1 January 2017:

  • Colombia
  • Pakistan.