What is Foreign Earnings Deduction?
If you are an Irish Resident registered PAYE worker and you spend more than 30 qualifying days per year working abroad, you may be entitled to claim the ‘Foreign Earnings Deduction’. The Foreign Earnings Deduction “FED” was introduced in 2012 to encourage the expansion of Irish trade with emerging markets. It can be claimed as part of your tax return, which is a service we offer our clients here at Irish Tax Rebates.
To claim for the Foreign Earnings Deduction, you must meet the following criteria:
- You must be resident in Ireland, working for an Irish based business and chargeable to Irish Tax
- Work abroad for a minimum of 30 ‘qualifying days’ per 12-month period.
- You must be working in a ‘qualifying area’
Since 2015 a qualifying day is one of at least three consecutive days worked in qualifying area. A qualifying day can also count as a day spent travelling to/from a relevant area once you are travelling from Ireland to a relevant area; from a relevant area to Ireland or from one relevant area to another. Saturdays, Sundays, and public holidays also count as a qualifying day in a relevant state.
Under the Foreign Earnings Deduction, a ‘qualifying area’ is one of the following areas.
Brazil, China, India, Russia and South Africa, Algeria, Democratic Republic of Congo, Egypt, Ghana, Kenya, Nigeria, Senegal and Tanzania, Bahrain, Chile, Indonesia, Japan, Kuwait, Malaysia, Mexico, Oman, Qatar, Saudi Arabia, Singapore, South Korea, Thailand, United Arab Emirates, Vietnam, Colombia, and Pakistan.
How much can I claim the FED?
The largest amount of tax relief you can claim is €35,000 which would result in a tax refund of €14,000. For Irish Tax Rebates to claim the FED as part of your tax claim, you must supply a supporting letter from your employer confirming the travel was work related with dates of your departure & return to Ireland and a list of locations where you worked abroad. The Foreign Earnings Deductions can only be claimed through your tax return.
To speak with the Irish Tax Rebates team and to check your eligibility for the Foreign Earnings Deduction contact us via one of the below:
- 059 86 34794