Revenue Note for Guidance

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Revenue Note for Guidance

196B Employees of certain agencies: foreign service allowances

Summary

This section provides for an exemption from income tax in respect of certain expense payments made to, or benefits provided for, employees of certain agencies who are posted abroad. To qualify for the exemption the payments must be certified by the Minister for Finance, after consultation with the Minister for Foreign Affairs or other appropriate Minister, as representing compensation for the additional living costs incurred in being posted abroad. The exemption is intended for employees of those agencies who are abroad but who do not have a representational capacity on behalf of the State. The main agencies involved are Enterprise Ireland, An Bord Bia, Tourism Ireland Ltd and Industrial Development Agency Ireland.

Details

An exemption from income tax is provided for such allowances or emoluments paid to employees of the agencies listed in subsection (1) as the Minister for Finance, having consulted with the Minister for Foreign Affairs or such other Minister as is appropriate in the circumstances, certifies as representing compensation for the additional cost of having to live outside the State in order to perform his or her duties.

Definitions

(1)(a) Subsection (1)(a) defines “emoluments” as being emoluments to which the provisions of section 985A applies i.e. benefits-in-kind. Normal salary payments are excluded from the provision and continue to be assessable as income arising from the holding of an office.

(1)(b) Subsection (1)(b) lists the agencies to which this provision applies. They are —

  • Enterprise Ireland,
  • An Bord Bia,
  • Tourism Ireland Ltd and
  • Industrial Development Agency Ireland.

(2) Subsection (2) contains the substantive provision providing for an exemption from income tax for such allowances or emoluments paid to an employee of one of the listed agencies as the Minister for Finance, having consulted with the Minister for Foreign Affairs or such other Minister as is appropriate in the circumstances, certifies as representing the additional cost of having to live outside the State in order to perform the duties of the office.

The section has effect from 1 January 2007.

Relevant Date: Finance Act 2021