Taxes Consolidation Act 1997 section 823A

Deduction for income earned in certain foreign states

Section 823A provides for an income tax relief known as the foreign earnings deduction (FED), which allows individuals resident in the State who temporarily carry out the duties of their office or employment in certain specified countries to claim a deduction from their employment income.

• The relief applies to directors and employees in the private sector and commercial semi-State sector who spend at least 30 qualifying days working in designated relevant states, with a maximum deduction of €50,000 for the tax years 2026 to 2030.
• Qualifying days must be entire days spent in a relevant state for the performance of employment duties; from 2026 onwards, there is no consecutive-day requirement, but the individual's presence in the relevant state must be reasonably required for business purposes.
• The deduction (the specified amount) is calculated as (D/F) × E, where D is the number of qualifying days, E is the individual's qualifying employment income, and F is the number of days in the tax year the individual held the relevant office or employment.
• The relief does not apply to USC or PRSI, does not extend to public sector employments, and cannot be claimed alongside the R&D employee credit, split-year residence treatment, transborder workers' relief, or the Special Assignee Relief Programme (SARP).