Foreign Earnings Deduction – Are You Eligible?

How do you know if you are eligible for Foreign earnings deduction?

Are you an employee carrying out part of your employment duties in any of the following places?
• Algeria
• Brazil
• China
• Democratic republic of Congo
• Egypt
• Ghana
• India
• Kenya
• Nigeria
• Russia
• Senegal
• Tanzania
• South Africa

Then you may be entitled to claim a deduction known as “FOREIGN EARNINGS DEDUCTION” (FED) The conditions are that within a 12 month period you have worked in one or more of the above places for a minimum of 60 “qualifying days” – this must be one of at least 4 consecutive days working and may include weekends if they form part of your business trip.

However, days spent travelling to and from these places where you are not present for the whole of the day there, may not be counted.
In general the deduction is 35,000 Euro or a lesser amount depending on the ratio of days and the level of you income. This means you are entitled to reduce your salary for tax purposes by this amount and apply for a refund.There are some exclusions that would not qualify:

•  If you are entitled to the remittance basis of tax (usually if non-domiciled in Ireland)
•  If “split year” residence rules apply to you
•  If cross border worker relief applies to you
•  If the employee research and development tax relief applies
•  If you are already entitled to the new special assignee relief programme (SARP)

If you feel you may be eligible, please contact us for the easiest route to take to make that travelling more worthwhile by making that end of year application on your behalf which entitles you to a partial tax refund.
A claim for repayment of tax must be made within four years after the end of the year to which the claim relates since the introduction of FED in 2012.

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